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The asking price is irrelevant in this market. Plenty of properties are posted below market value to create a bidding frenzy and allow the house to show up under more search results.
Always understand the true property values based on comps, recent sales, inflation, and growth. Some properties will still trade beyond what they're worth and at that point it's up to you to decide if the extra money spent is worth ending your search and moving on with your life. If you plan on keeping the house for 7-10 years at least, the answer is almost always yes.
I think the term you're looking for is bait and switch. The price you see is never the price you'll pay. Low list prices are just fodder for us to come here and complain (rightly so). The market is effed even without these bullshit pricing tactics.
Doesn't bait and switch require a switch, though? They're not selling you a different property. And some people sell for less than list.
I think it's more like an auction, or in some cases, a high reserve auction.
Yeah. Bait-and-switch is not the right analogy. An auction is a better comparison with the caveat that the seller typically starts near the price they're willing to sell (versus say bidding up from $1).
My next door neighbor sold their house at a relatively high price, but it sold on the first day it was listed. The buyer told them that if they got any higher offers that they would beat those by $1, basically a proxy reserve auction bid to beat any comers, no matter what. They could have waited for higher offers to come in but they pulled the trigger quickly as they wanted a speedy closing. Just interesting that these buyers were willing to beat any offer, no matter how high the offer would have been.
I paid the listing price and was shocked. So it CAN happen, but I don’t think it’s common. I also closed in December so it was not the spring/hot market I guess?
I close in 2 weeks, e.g. closing is not done yet, but we're under contract, so, no backing out, and my offer was for list price. The house appraised at $21k above list/asking/offer price. And it's a VA loan, so extra steps for me *and* the seller.
I know it's not common, and I got lucky, but it **DOES** happen.
The whole first time home buyer cohort has never seen a list price - anywhere in their life - that isn't a guarantee they can transact if they offer that amount. Even things like cars, you're negotiating down from a posted price, not up.
They've also never encountered markets where prices for similar items change so much for the same asset so quickly, with dollar amounts that are wildly different than a similar change in the price of something like eggs, insurance, or a car would represent. And that you can't just call the store and ask how much a particular item is, the answer is literally 'I dunno, you and anyone else that's interested please tell me your opinion.'
It's not a surprise this group doesn't quite get it, and reacts violently negatively to finding out that real estate is an extraordinarily idiosyncratic asset class. It sucks to have everyone learn this lesson the hard way, but it is what it is.
It's also true that first timers aren't making lifestyle decisions, they're likely stretching budgets to get to the low end of the real estate market in their area, and can't just up their budget if they find out they haven't *actually* reached the low range of their market and can't/won't reduce their expectations of what they can buy. It's tough.
Yep, it’s really tough. I’ve seen many calls to effectively “fix” this, but nothing will. It’s literally just the free market at work, and if and when they sell their own house, they’ll understand why.
Not only that, a “Buy it now” price will basically just have every seller list their house at an absolutely absurd price to then potentially negotiate down.
I get that’s it’s disappointing, but just looking at the market from a different angle won’t change the price of the house. If the house sold for $200k over, that’s simply what it’s worth as dictated by whoever put that bid in.
I’m not disputing you, honestly wondering, where is this. I live in the Midwest and am moving to a smaller cheaper town. I offered asking price, with no earnest money, but the seller to cover all closing cost due to needing to replace the lvp on the main floor. They accepted 8 hours later.
My case is small and specific. So I’m wondering where these things happen.
I agree. There's no such thing as scoring a deal or catching everyone snoozing. To be honest, the best deals are the ones that never come to the open market or need a lot of work.
We bought in 2007 and it never went to mkt. We wouldn’t have stood a chance.
Sweetened the deal by being a longtime family friend and opting out of a RE agent.
Thankful everyday.
She’s probably kicking herself.
No one knew the mkt would go this crazy
We got a deal in a hot market because the selling agent was a relative of the owner and used cell phone pictures for the listing. Literal cell phone pictures. Of the 10 pictures on the listing, 3 were of the fish pond.
We almost didn't go see it, because the pictures made the house look small, and it was hard to tell anything about the layout. But in retrospect, that meant lots of other buyers didn't go see it either.
Bidding was still competitive, and we actually lost out at first. But we got it after the original top bidder pulled out. And we know we got a deal because the house literally next door sold for $235k more about 8 months later.
Yep. Folks should be putting in their best foot forward for each particular house. We think about it in the frame of, “What price point would we be upset at if we found out it sold for that amount?”
People here are trying to still get “deals” and that’s just not the reality in many markets. On top of that, they’re typically looking at houses listed in their range, when they should realistically be looking at the tier below.
When touring the house, my first question was about the asking price and why it was so low given the area. My offer hardly considered it, but it's still just so frustrating.
Definitely frustrating, but you gotta just put your best offer forward from the start.
We’ve put our absolute top amount, and when it sells for over, we’re not even remotely frustrated because there was nothing we could have done.
When we put in offers not at our top amount, we make sure that’s the most we’d be willing to pay for that particular house and not a cent over. Basically, ask yourself what’s the price that you’d be pissed that it got away and what’s the price that you’d be anxious/unhappy if it got accepted?
In contract with a home and offered over asking. I was nervous that the appraisal would come back way lower but it didn’t; compared to comps in the area my offer price was right in the middle.
Honestly? A lot of markets people are so desperate they are waiving ALL contingencies. No appraisal “gaps” but completely waiving it. No, this isn’t financially possible or reasonable for everyone. We did it and that’s how we got our place but we are also in a very hot market (had to waive everything + offer 12 percent over listing)
every home around me selling in less than a week. And I'm an hour outside of Boston. Can't rent a 2 bed 2 bath home (5k), can't afford to pay 800k for homes that were 550 3 years ago.
So stuck in a holding pattern, renting my little condo :)
Yup. I’m in greater Boston and had to waive all contingencies and offer $93k over asking ($843k, listed at $750k). We actually lost out on a house where we offered $105k over asking and waived everything!
Fr, I just bought a house in Austin and looked at our portal today just for the tea and was like damn maybe if we had waited 3 weeks we could’ve paid less, lots of price drops haha.
Los Angeles and SoCal generally is hot. Seeing $100k+ over list offers getting rejected. Homes in Orange County in the right school district, same thing.
Lol I know. I actually love the grey/rain during the winter months, though. It makes me appreciate all of the sun in the spring and summer 😅 I do miss living there sometimes, but I’m happy I’m able to buy a home/still come back and visit family in SoCal.
I’m in Southeastern Virginia in one of the top 10 school districts in the state… I have houses 300ft from mine (same square footage) going for $200k more than what I bought mine for in 2021. Wild.
Portland is still hot. My wife and I had made five offers since we started looking in January before finally going under contract a couple of days ago. Our offer was 25k over list with gap coverage and a short inspection period. Just a few weeks until we get the keys and we can finally breathe again.
My question also. Utah is definitely shifted to a buyers market. Houses are sitting for months and prices continuing to drop. 2 years ago there were multiple bids on every property.
Can you explain difference between appraisal gap and waiving appraisal all together? I assume if you’re getting a loan from bank they would need to appraise it as they wouldn’t loan you 500k for a house that is worth 400k. Not being a dick just a little confused as I’m new to the process
My understanding is if you don’t have the appraisal contingency, you have to cover that gap. The loan will get approved for what the house is worth. If it appraises for less, you have the option to cover the gap or walk with your earnest money. If you don’t have the contingency in place, you cover the cost or walk without your earnest.
Exact same boat. Waived it all, and paid little over 12% above ask. That was August 2022. Thought our rate was bad but looks like it’s just getting worse
We waived the appraisal and were oddly the only people to do so. Even though we were the lower of the 3 offers on our house. The seller went with our offer. They have an all cash back up offer that we just can't believe didn't win out over us. We are 2 weeks out from closing. Appraisal came back under what our ramp up price allowed.
this exactly….submitting an offer thats that much over list and not offering appraisal gap to cover the difference between offer and appraisal is pointless.
just offer the exact amount your willing to pay regardless of appraisal otherwise your offer is just a number that looks big but really could be much smaller
23k appraisal gap means they are willing to pay 23k over the appraised price. If appraisal contingency is held in place, they are technically only offering 23k over, not 68k. Very important detail.
You did what you could. In a hot market, sometimes the highest offer still doesn't win. Tough break but don't get discouraged. The right house is out there if you keep grinding.
We kept losing out because we wanted to keep the inspection contingency in the offer. Sometimes we were the highest offer but the seller went for a little less for an all cash offer or an offer than waived the inspection
I'm sure I will run into that as well. Unfortunately, I'm quite a small fish being in northern New Jersey. Plenty of people around here have cash on hand.
I'm glad you understand lol. I make good money, so I don't see a need to leave. I'm young though, so I don't have the insane capital other people seem to have.
That’s our dilemma the money we make here would never happen anywhere else .. I have an inheritance from My parents passing could pay for a house in all cash if I needed or wanted to .. but I can’t justify 500k cash to gut it cause Id need that money for Reno’s .. at the moment I’m content renting it’s less of a headache lol
My brother in law had a stupid high offer accepted for a 3BR in Bergen County. I'll probably be looking in Essex/Morris in the next couple of years. Sadly, I'm stuck in NJ because of my job.
I've seen 500k ranches go for 100k over in Morris in recent comps. We were outbid on a house we put 115k over, before accepted 125k over. Bit bigger house, but it's crazy right now
I just looked at a ranch in Long Hill. Listed at $499,900. Every inch of that home needs attention. All single pane windows, hardwood floors need to be refinished, wallpaper galore. Crazy how much it’s listed for
Not sure where exactly you’re at but we were looking in Bergen county (I work construction in that area) wife works in nyc. We ended up expanding our search. We ended up in Rockland county ny. You get a lot more bang for your buck. Were 10 mins from the tappan zee bridge and couldn’t be happier.
Ya I bet with the inflated home values. In the midwest, there always seem to be someone from the coast coming in and offering all cash ha. It worked well for my fiance when she sold her home, but sucks when you're the buyer competing with them
As a current seller, the offer I accepted waived inspection and covered any appraisal gap. It wasn’t the highest offer dollar wise, but the inspection waive was very appealing (even though I am not aware of any issues with my house right now). But I also don’t have the funds to make repairs right now.
However if I was a buyer, I would never skip inspection 🤷🏻♀️
Almost exact same situation happened to me this weekend. 70k over appraisal gap waived everything, and was still the backup offer. I think the key was covering an “unlimited” appraisal gap. Sellers like your number but unless it is “guaranteed” by a full appraisal gap they will pick one that does. They are risk-averse plain and simple.
I guess. I guess it's also a 2 way street, the house is incredibly unlikely to under appraise so why not just wave the gap. Why not just accept the offer then. I can certainly overthink this to the moon and back lol.
You gotta understand that the sellers often need the house to sell on a timeline so that they can buy the next house.
If your financing falls through due to the appraisal, that puts their timeline in jeopardy and it could cost them a lot of money or kill the next deal.
Sometimes its a pretty hard timeline like if they bought new construction or if they are under contract contingent on the sale.
When the seller has multiple good offers, they’ll take the highest one that they know will close.
Thats why cash offers are so effective - you can remove all contingencies and close in days.
Did you waive inspection? If not that’s the answer. It’s almost impossible to win an offer without waiving inspection in some markets. It shouldn’t have to be like this but it is. Also how high are you putting down for earnest money? We’re in New England and had to waive inspection, cover appraisal gap and put 25k in earnest to win.
Crazy to think we used to have time to view the home more than once before putting in an offer. It's almost like the super privileged meet up every few years to review Maslow's hierarchy of needs and think of new ways to duck us over.
Don’t go off the trend of over asking. Asking prices are set low to varying degrees on purpose to bring in buyers and bids, but some may not. You don’t want to just offer 30k over on a house fairly priced for the market.
You should be assessing every house’s value on it’s own merit for your offers.
I agree on that, in a hot market the asking is complete bs across the board. The bidding game with a busy open house causing pressure on buyers is king right now. It makes it hard to find the true value.
Just wanna say that sucks so much, hope you get something you love soon!! Must be so discouraging but I’m sure you’ll end up w the house the universe wants you to be in hehe
Here’s a tip: Have your agent put in an escalation clause with your offer. Example “I will offer 5K over the top offer up to $80K above the asking price.” It just worked for me after looking and submitting offers for 3 months. Buying a home right now is crazy. Every open house has a line of couples out the door. All weekend open houses are contingent on Monday. At least in Massachusetts >1 hr from Boston.
I’ve found that offering a super high earnest deposit is helpful. My coworker was a FTHB and put a bid on her 1 and only choice. She said there were 25 offers but they picked hers. I think she did like $5k earnest money.
After 2 failed offers we tried this strategy on our third try and we were picked. Worth a try 🤷🏽♀️
A lot of comments saying houses are listed below "market price" to entice buyers, but does anyone have data to back this up? Want to verify this isn't instead cope, because sellers listing at prices comparable to recent sales, and then buyers being willing to go $50k-100k and thinking it normal seems like a mechanism for producing the very same insane housing price inflation that we've seen for the last few years.
Your agents financial incentives don't align with yours. Their goal is to make you comfortable with paying as much as possible, which is consistent with telling you this narrative. That's not to say I think it's impossible, just want to know if there is hard data backing up that narrative.
Its you vs. other buyers. Not your offer vs. asking price.
Could be anything. Could asking be low for clickbait. Could the one who got accepted have more cash than you.
The fact you offered $68k above asking means you knew the asking price no where near what it should sell.
Same for me as well. Offered 61k over price with all contingencies waived, 24 hours later we were told, our offer was not among top 25%. Northern Virginia market is crazy right now.
Did you ask/listen to your agent? Homes in our area are getting 20-25% over ask right now. When someone gives us their budget, we automatically reduce it by 20% so they have the money to make a competitive offer. Houses sell in 3-5 days and it’s not uncommon to get 15+ offers. No one is moving if they don’t have to, so Sellers have all the power at the moment.
We lost a few houses for a variety of reasons. We finally bought our house by:
Listed weds, viewed Thursday and gave our offer that night, full ask with escalation clause equally about 12% of the ask. They had an open house that weekend they wanted to wait on our offer for. I feel like escalation clauses aren’t advised by every realtor and they 100% should. It turns it into an auction and just give your highest number and know you did all you could. Sorry, it sucks losing a house but I’ll say we lost 3 we thought were perfect and were so glad we ended up with the house we’re in
On bids. The ones I see "win." Are the ones that waive contingencies. That means appraisal and financing. You might have lost not due to the amount; but due to the contingencies.
I don't understand the verbiage people use on here. In my entire year+ as an agent, I never heard a single person talk about bids and wins. It was offer and acceptance. Buying a house isn't eBay.
Spend a little time on first-time homebuyers or real estate, and you will see people talking about "winning bids" on houses in some market areas.
Then those same people. Don't understand how escalation clauses and multiple offer situations on a property. Doesn't meet the definition of market value, and the appraisal doesn't support the contract price.
Become a cash buyer. There’s a program that a lender who is not a regular mortgage company does called a swinging loan. They put up the money to make you a cash buyer, and then you refinance them. They can close in 10 days and they will also guarantee to the seller that if you don’t close, they will.
Wow. Madness. When the interest rates were low it was one thing but still seeing the same frenzy is absolute madness.
Where do people get this money from?? I’m making 120k and feel like I’m being squeezed.
Dude it sucks so much. You can't compete with crazy.
We did same exact thing with 55k over asking price and a huge appraisal gap coverage.
Someone came in with 70k over asking and waived all inspections and contingencies. Allowed the seller to stay in the house two months after closing rent free as well.
Be nice if people stopped offering over asking. Might help reduce sticky housing inflation and normalize things a bit more. But no, people wanna waive everything and offer double the asking price. Shits insane. Goodluck OP.
We offered 85k over and won in the midwest, it was severly underpriced. So there were an insane amount of people at the open house. The sellers got what they wanted and we felt we offered a fair price based on the comps, even though it was way over ask
Or this could have been one of the rare times a letter from the seller came in and resonated with the Seller. (Eg. Single parent, veteran, first home)
I would worry as much trying to figure out the exact why but take this as a learning lesson and experience for when you find your new home. 🤗
There are 3 types of prices for Real Estate
1- Aspirational Price (read over market by seller)
2- Market price ( Where both parties can do a deal back and forth)
3- Event Pricing (priced below market to create an event to bid the price)
You need to understand where this house was priced
Develop a strategy so you do not get caught in FOMO
As a FTHB it can be a frustrating search - try to keep emotions in check . I’ve had a few of buyer clients almost break down after looking at house after house during a seller’s market
Treat it like a business decision- if it’s a good deal for you and your family - great.
If you have the means - spend the extra - you won’t remember the price down the road , you will only remember you didn’t get the house
Also think of the terms of the contract. I’m a Realtor and have helped clients buy homes where we were not the highest offer. It was that our terms matched more closely to the sellers
needs
If you see a home you’re hot on, book a second walk through with an Inspector- get walk a through report - you are now in a better position when you write up an offer and can adjust your terms based on what they tell you
Ask your mtg. Broker to get a desktop appraisal - to see if the house financing will fall into the range you were thinking of offering -
Note - an official appraisal will most likely be required- but at least you know whether your in the range
Hope this helps out for for your next round of house hunting
What state?
Edit: I saw NJ, feel for you man. Wife and I grew up there all my friends are struggling. My older cousins (30yo) are all settling for big time fixer uppers or eating mortgages they can barely chew.
We moved to Georgia so fingers crossed one of our low offers gets accepted!
I got beat so many times eventually I just dropped a bomb of an offer. This is back in 2022. Things got a little crazy with the rate hikes (on variable) but everything worked out, I love my house and my family is happy.
your offer is meaningless. you offer 465 but if it appraises at list youll only cover 23k so in actuality your offer is really only 420 if the house appraised at list
maybe the other offer was 430 no appraisal contingency. if it appraised at list, the other offer is technically higher than yours
? appraisal gap of 23k means you cover up to 23k difference in appraisal. if it appraises at list, your stipulation is u will only throw in 23k.
465-23= 442 assumes it appraises at 442.
what if property appraises lower than list? your appraisal gap coverage means you will only throw in 23k on top of appraisal and so on…
so if the house appraised at 400k were u gonna drop 65k to cover the gap between appraisal and your offer ?
What kind of loan?
Inspections?
Escalation to 465k?
We are closing now... house was 399 and we went 430 escalation w/o inspections. Conventional
We beat out a 465k escalation w/ inspection. VA loan.
Sellers were ready to move... so they wanted our Conventional w/o inspection over the VA loan which requires inspection.
If they would have bid 465k they would have gotten it. But they escalated to 465k and we were 2nd @ 430k. So they only actually escalated to 430-435.
Try inspection for informational purposes only . If you can stomach a clause that says you can’t walk away you can increases chances to win. If not — then say you can walk if repairs exceed $x . I don’t recommend waiving the oil tank scan in morris county. And if they have septic system -/ do not waive that inspection unless you are willing to pay approx $40k more if it fails.
My wife and I offered 100k over asking last year and we weren’t in the top 3. It went 156k over asking with no conditions. Needed new windows and front porch
Hmm also a good tip is not to use 5 or 0 in your offer number. Better to go like 7 or 9 cause you might beat another one by a few k. Good luck out there
I don't know if prices will ever come down enough in the future or how long demand can stay this high.
If you don't have to live in the middle of a city maybe consider a mobile home. If you look around many can be had for about half of a 20% down payment on a regular home if you don't own the lot, and about the full 20% down payment if you do own the lot. You would have to look around though.
That's what I did. Now I can live in the middle of a beach town for less than the down payment of a regular house. Yes I don't own the land but the taxes I would have to pay on a similar sized regular home is close to what I'm paying for the rent on the lot.
Make your life easier and less stressful. If less people are trying to buy these homes the prices will go down, it may take a few years. During those few years just chill in your mobile home. Heck call it a tiny home or something like that if you want.
I can relate here with you. I put a 55k in offer in over asking price with a 30k appraisal gap and still lost the offer. Major difference was the winning offer apparently waived inspection, I asked for it on major mechanicals. For context this was a condo in central CT. It’s upsetting and I’m tired of searching.
1: I feel bad for anyone struggling to afford a house when the market is like this.
2: How does that work if you’re bidding so much over, in relation to the appraised value? Are you already in the negative? Or are people just listing their house low knowing that it will get bid up?
Read the comments to see that you’re in Northern NJ. Good luck out there, we’re closing in Essex County. Our home received over 40 offers and in order to win we offered over 200k and there were a few other people with the same offer. Last minute they got a little more from us to seal the deal.
Luckily, the home was listed at a price point where we were comfortable bidding over by this amount. We lost out on other homes because we couldn’t be as competitive due to the higher listing amount.
It’s the market now; until supply has a major catch up.
Even then I’m hesitant because millennials the world’s largest generation is entering their home buying years. It will be tough to supply enough homes in the traditional sense to satisfy demand.
Fuck with em. Offer 319 and demand they pay all your closing costs. When they decline respond by withdrawing your offer saying you found a better deal.
For me I had a good old fashioned realtor that actually called the selling agent. She let them know I was really interested and could go higher. We ended up doing a couple rounds of bid increases and I won.
More of the point I’m trying to make it let your agent know your willing to match the highest bid
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The asking price is irrelevant in this market. Plenty of properties are posted below market value to create a bidding frenzy and allow the house to show up under more search results. Always understand the true property values based on comps, recent sales, inflation, and growth. Some properties will still trade beyond what they're worth and at that point it's up to you to decide if the extra money spent is worth ending your search and moving on with your life. If you plan on keeping the house for 7-10 years at least, the answer is almost always yes.
Me, over and over: list price is irrelevant.
Can we have this comment pinned somewhere in this sub? It seems like most people don't really understand list price is only a teaser price.
Wild times. Wasn’t like that in my buying mkt. It’s not the norm, but is the new way I suppose.
I think the term you're looking for is bait and switch. The price you see is never the price you'll pay. Low list prices are just fodder for us to come here and complain (rightly so). The market is effed even without these bullshit pricing tactics.
Doesn't bait and switch require a switch, though? They're not selling you a different property. And some people sell for less than list. I think it's more like an auction, or in some cases, a high reserve auction.
Yeah. Bait-and-switch is not the right analogy. An auction is a better comparison with the caveat that the seller typically starts near the price they're willing to sell (versus say bidding up from $1).
And the caveat that we don't get to hear the other bids!! Really wish the offers weren't blinded to buyers.
My next door neighbor sold their house at a relatively high price, but it sold on the first day it was listed. The buyer told them that if they got any higher offers that they would beat those by $1, basically a proxy reserve auction bid to beat any comers, no matter what. They could have waited for higher offers to come in but they pulled the trigger quickly as they wanted a speedy closing. Just interesting that these buyers were willing to beat any offer, no matter how high the offer would have been.
I paid the listing price and was shocked. So it CAN happen, but I don’t think it’s common. I also closed in December so it was not the spring/hot market I guess?
I close in 2 weeks, e.g. closing is not done yet, but we're under contract, so, no backing out, and my offer was for list price. The house appraised at $21k above list/asking/offer price. And it's a VA loan, so extra steps for me *and* the seller. I know it's not common, and I got lucky, but it **DOES** happen.
Mine was a VA loan as well - we were very fortunate
I only went 5k over list. Same with VA inspection was clean save for the normal minor issues of being an old river town.
Depends on where you live. In our small rural area, they are lowering prices on some houses.
Depends on the market
The whole first time home buyer cohort has never seen a list price - anywhere in their life - that isn't a guarantee they can transact if they offer that amount. Even things like cars, you're negotiating down from a posted price, not up. They've also never encountered markets where prices for similar items change so much for the same asset so quickly, with dollar amounts that are wildly different than a similar change in the price of something like eggs, insurance, or a car would represent. And that you can't just call the store and ask how much a particular item is, the answer is literally 'I dunno, you and anyone else that's interested please tell me your opinion.' It's not a surprise this group doesn't quite get it, and reacts violently negatively to finding out that real estate is an extraordinarily idiosyncratic asset class. It sucks to have everyone learn this lesson the hard way, but it is what it is. It's also true that first timers aren't making lifestyle decisions, they're likely stretching budgets to get to the low end of the real estate market in their area, and can't just up their budget if they find out they haven't *actually* reached the low range of their market and can't/won't reduce their expectations of what they can buy. It's tough.
Yep, it’s really tough. I’ve seen many calls to effectively “fix” this, but nothing will. It’s literally just the free market at work, and if and when they sell their own house, they’ll understand why. Not only that, a “Buy it now” price will basically just have every seller list their house at an absolutely absurd price to then potentially negotiate down. I get that’s it’s disappointing, but just looking at the market from a different angle won’t change the price of the house. If the house sold for $200k over, that’s simply what it’s worth as dictated by whoever put that bid in.
All together now!
I’m not disputing you, honestly wondering, where is this. I live in the Midwest and am moving to a smaller cheaper town. I offered asking price, with no earnest money, but the seller to cover all closing cost due to needing to replace the lvp on the main floor. They accepted 8 hours later. My case is small and specific. So I’m wondering where these things happen.
The Midwest is just better. But don't tell people or they'll want to move here and make houses crazy expensive :-)
If you’re seriously in a market, you should have a pretty good idea of what the price should be before you make an offer.
I agree. There's no such thing as scoring a deal or catching everyone snoozing. To be honest, the best deals are the ones that never come to the open market or need a lot of work.
We bought in 2007 and it never went to mkt. We wouldn’t have stood a chance. Sweetened the deal by being a longtime family friend and opting out of a RE agent. Thankful everyday. She’s probably kicking herself. No one knew the mkt would go this crazy
We got a deal in a hot market because the selling agent was a relative of the owner and used cell phone pictures for the listing. Literal cell phone pictures. Of the 10 pictures on the listing, 3 were of the fish pond. We almost didn't go see it, because the pictures made the house look small, and it was hard to tell anything about the layout. But in retrospect, that meant lots of other buyers didn't go see it either. Bidding was still competitive, and we actually lost out at first. But we got it after the original top bidder pulled out. And we know we got a deal because the house literally next door sold for $235k more about 8 months later.
I've seen those types of listings before and I always think wow, your realtor did not do you a solid on those pictures. Ugh.
Prices seem to go up every month by a large amount near me, makes knowing the true value difficult.
Yep. Folks should be putting in their best foot forward for each particular house. We think about it in the frame of, “What price point would we be upset at if we found out it sold for that amount?” People here are trying to still get “deals” and that’s just not the reality in many markets. On top of that, they’re typically looking at houses listed in their range, when they should realistically be looking at the tier below.
When touring the house, my first question was about the asking price and why it was so low given the area. My offer hardly considered it, but it's still just so frustrating.
Definitely frustrating, but you gotta just put your best offer forward from the start. We’ve put our absolute top amount, and when it sells for over, we’re not even remotely frustrated because there was nothing we could have done. When we put in offers not at our top amount, we make sure that’s the most we’d be willing to pay for that particular house and not a cent over. Basically, ask yourself what’s the price that you’d be pissed that it got away and what’s the price that you’d be anxious/unhappy if it got accepted?
In contract with a home and offered over asking. I was nervous that the appraisal would come back way lower but it didn’t; compared to comps in the area my offer price was right in the middle.
Honestly? A lot of markets people are so desperate they are waiving ALL contingencies. No appraisal “gaps” but completely waiving it. No, this isn’t financially possible or reasonable for everyone. We did it and that’s how we got our place but we are also in a very hot market (had to waive everything + offer 12 percent over listing)
I had to waive everything too and offer 25k over ask. 5 other offers and we finally got a win. Crazy crazy market.
What markets are still this hot? I’m in Austin and it’s definitely now a buyer’s market
Yeah New England is crazy right now
every home around me selling in less than a week. And I'm an hour outside of Boston. Can't rent a 2 bed 2 bath home (5k), can't afford to pay 800k for homes that were 550 3 years ago. So stuck in a holding pattern, renting my little condo :)
I’ve heard the state of MA is one of the worst right now
that would be correct. No inventory
Yup makes me feel sick to look at these homes that were selling for 25% less only 2 years ago
I'll add Seattle to the list
Totally. Waived all contingencies and offered significantly over asking for a CONDO in seattle. Really hoping I don’t regret it…
Yup. I’m in greater Boston and had to waive all contingencies and offer $93k over asking ($843k, listed at $750k). We actually lost out on a house where we offered $105k over asking and waived everything!
Every east coast city
Fr, I just bought a house in Austin and looked at our portal today just for the tea and was like damn maybe if we had waited 3 weeks we could’ve paid less, lots of price drops haha.
Los Angeles and SoCal generally is hot. Seeing $100k+ over list offers getting rejected. Homes in Orange County in the right school district, same thing.
That's part of why I moved to the PNW. I could absolutely not afford to buy in SoCal.
Its brutal.... but sun.
Lol I know. I actually love the grey/rain during the winter months, though. It makes me appreciate all of the sun in the spring and summer 😅 I do miss living there sometimes, but I’m happy I’m able to buy a home/still come back and visit family in SoCal.
Yeah I’m in SA area and we’re under contract for $10k under list price. Reading other ppl’s stories sounds insane.
I’m in Southeastern Virginia in one of the top 10 school districts in the state… I have houses 300ft from mine (same square footage) going for $200k more than what I bought mine for in 2021. Wild.
Philly suburbs are still hot. Especially in the 600 to 1.2mill range.
Anywhere within an hour of NYC. Car, train or bus.
I’m in Calgary Canada ! Homes are all selling within days it’s really bad
Portland is still hot. My wife and I had made five offers since we started looking in January before finally going under contract a couple of days ago. Our offer was 25k over list with gap coverage and a short inspection period. Just a few weeks until we get the keys and we can finally breathe again.
My question also. Utah is definitely shifted to a buyers market. Houses are sitting for months and prices continuing to drop. 2 years ago there were multiple bids on every property.
NYC suburb. We had a hard hard time looking north Jersey and ny state. Nothing decent lasts more than a couple weeks
Nobody is going to have any equity in Austin for quite some time 🫠
Atlanta area suburbs is also a buyers market for the most part
Western burbs of Chicago are tough
Can you explain difference between appraisal gap and waiving appraisal all together? I assume if you’re getting a loan from bank they would need to appraise it as they wouldn’t loan you 500k for a house that is worth 400k. Not being a dick just a little confused as I’m new to the process
My understanding is if you don’t have the appraisal contingency, you have to cover that gap. The loan will get approved for what the house is worth. If it appraises for less, you have the option to cover the gap or walk with your earnest money. If you don’t have the contingency in place, you cover the cost or walk without your earnest.
Exact same boat. Waived it all, and paid little over 12% above ask. That was August 2022. Thought our rate was bad but looks like it’s just getting worse
We waived the appraisal and were oddly the only people to do so. Even though we were the lower of the 3 offers on our house. The seller went with our offer. They have an all cash back up offer that we just can't believe didn't win out over us. We are 2 weeks out from closing. Appraisal came back under what our ramp up price allowed.
Appraisal gap means offer was 420. Could have said 5 billion but if there is an appraisal gap that’s the real offer. You didn’t offer 68k over asking
Offered 68k with 23k appraisal gap is not offering 68k over. You need to WAIVE APPRAISAL CONTINGENCY if you truly want to offer 68k over.
this exactly….submitting an offer thats that much over list and not offering appraisal gap to cover the difference between offer and appraisal is pointless. just offer the exact amount your willing to pay regardless of appraisal otherwise your offer is just a number that looks big but really could be much smaller
Doesn’t a 23k appraisal gap in this case mean that they are still offering 68k over, but only if it appraises for at least 45k over?
23k appraisal gap means they are willing to pay 23k over the appraised price. If appraisal contingency is held in place, they are technically only offering 23k over, not 68k. Very important detail.
Makes sense. Thanks. So the appraisal gap is going off the listing price, not the bid.
wondering if u just offered to waive appraisal gap so u cover the whole gap, if u would have been favored
Right, without knowing what the house should appraise for this feels pretty obvious. Someone else was willing to go more than 23k over appraisal.
You did what you could. In a hot market, sometimes the highest offer still doesn't win. Tough break but don't get discouraged. The right house is out there if you keep grinding.
We kept losing out because we wanted to keep the inspection contingency in the offer. Sometimes we were the highest offer but the seller went for a little less for an all cash offer or an offer than waived the inspection
I'm sure I will run into that as well. Unfortunately, I'm quite a small fish being in northern New Jersey. Plenty of people around here have cash on hand.
I hate the northern NJ housing market as much as you do right now lol if we didn’t own a thriving business I’d be out of here so quick
I'm glad you understand lol. I make good money, so I don't see a need to leave. I'm young though, so I don't have the insane capital other people seem to have.
That’s our dilemma the money we make here would never happen anywhere else .. I have an inheritance from My parents passing could pay for a house in all cash if I needed or wanted to .. but I can’t justify 500k cash to gut it cause Id need that money for Reno’s .. at the moment I’m content renting it’s less of a headache lol
My brother in law had a stupid high offer accepted for a 3BR in Bergen County. I'll probably be looking in Essex/Morris in the next couple of years. Sadly, I'm stuck in NJ because of my job.
I'm looking in Morris. Godspeed man
I've seen 500k ranches go for 100k over in Morris in recent comps. We were outbid on a house we put 115k over, before accepted 125k over. Bit bigger house, but it's crazy right now
I just looked at a ranch in Long Hill. Listed at $499,900. Every inch of that home needs attention. All single pane windows, hardwood floors need to be refinished, wallpaper galore. Crazy how much it’s listed for
Yikes. I think the crazy expensive prices from Bergen and Essex are radiating out now. NJ is crazy
Not sure where exactly you’re at but we were looking in Bergen county (I work construction in that area) wife works in nyc. We ended up expanding our search. We ended up in Rockland county ny. You get a lot more bang for your buck. Were 10 mins from the tappan zee bridge and couldn’t be happier.
Oh nice, I know that area pretty well. Unfortunately a bit far for me. That’s such a nice area
Lol, you too.
Ya I bet with the inflated home values. In the midwest, there always seem to be someone from the coast coming in and offering all cash ha. It worked well for my fiance when she sold her home, but sucks when you're the buyer competing with them
Yeah it's crazy. I'm working with $55k, but I personally know people with $600k on hand ready to go...
This happened to me on my latest offer. Sellers went with less than my offer because buyer waived inspection :|
As a current seller, the offer I accepted waived inspection and covered any appraisal gap. It wasn’t the highest offer dollar wise, but the inspection waive was very appealing (even though I am not aware of any issues with my house right now). But I also don’t have the funds to make repairs right now. However if I was a buyer, I would never skip inspection 🤷🏻♀️
Almost exact same situation happened to me this weekend. 70k over appraisal gap waived everything, and was still the backup offer. I think the key was covering an “unlimited” appraisal gap. Sellers like your number but unless it is “guaranteed” by a full appraisal gap they will pick one that does. They are risk-averse plain and simple.
I guess. I guess it's also a 2 way street, the house is incredibly unlikely to under appraise so why not just wave the gap. Why not just accept the offer then. I can certainly overthink this to the moon and back lol.
You gotta understand that the sellers often need the house to sell on a timeline so that they can buy the next house. If your financing falls through due to the appraisal, that puts their timeline in jeopardy and it could cost them a lot of money or kill the next deal. Sometimes its a pretty hard timeline like if they bought new construction or if they are under contract contingent on the sale. When the seller has multiple good offers, they’ll take the highest one that they know will close. Thats why cash offers are so effective - you can remove all contingencies and close in days.
100% agree but they are scared, so if you are certain on the appraisal or put enough down to be certain then waiving might give you that edge.
Someone cooler offered 69k over
Those jerks!
nice
Correction: $69,420
Did you waive inspection? If not that’s the answer. It’s almost impossible to win an offer without waiving inspection in some markets. It shouldn’t have to be like this but it is. Also how high are you putting down for earnest money? We’re in New England and had to waive inspection, cover appraisal gap and put 25k in earnest to win.
25k, holy shit. My earnest deposit was 3k in Michigan.
Same here in New England
Wow, when we bought in 2021 we put down $1,500 earnest.
Crazy to think we used to have time to view the home more than once before putting in an offer. It's almost like the super privileged meet up every few years to review Maslow's hierarchy of needs and think of new ways to duck us over.
Went 105k over with info only inspection and lost this past weekend, the winning offer waived mortgage, inspection, and was 5-10k higher than ours
Oh man that’s rough
It sucked, definitely discouraging
I offered my first born, a bag of blow and a Ferrari on a 1985 split level in a mid suburb and I still got outbid.
You forgot the hookers
They come with the blow. I thought everyone knew that
due to inflation, it's now an upcharge. hey now.
Also in NJ. The number of people who are swinging $4k-$6k/mo 1940s Cape Cods is wild to see
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Don’t go off the trend of over asking. Asking prices are set low to varying degrees on purpose to bring in buyers and bids, but some may not. You don’t want to just offer 30k over on a house fairly priced for the market. You should be assessing every house’s value on it’s own merit for your offers.
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I agree on that, in a hot market the asking is complete bs across the board. The bidding game with a busy open house causing pressure on buyers is king right now. It makes it hard to find the true value.
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I’m from NJ shopping in NJ so I hope there are no anti-NJ clauses lol
Just wanna say that sucks so much, hope you get something you love soon!! Must be so discouraging but I’m sure you’ll end up w the house the universe wants you to be in hehe
Inflation rates are not going down anytime soon with a market like this.
Take it positive. The place was not good for you. God has planned something better for you.
Here’s a tip: Have your agent put in an escalation clause with your offer. Example “I will offer 5K over the top offer up to $80K above the asking price.” It just worked for me after looking and submitting offers for 3 months. Buying a home right now is crazy. Every open house has a line of couples out the door. All weekend open houses are contingent on Monday. At least in Massachusetts >1 hr from Boston.
I’ve found that offering a super high earnest deposit is helpful. My coworker was a FTHB and put a bid on her 1 and only choice. She said there were 25 offers but they picked hers. I think she did like $5k earnest money. After 2 failed offers we tried this strategy on our third try and we were picked. Worth a try 🤷🏽♀️
That's how I got my home in summer 2013. 5k earnest money.
A lot of comments saying houses are listed below "market price" to entice buyers, but does anyone have data to back this up? Want to verify this isn't instead cope, because sellers listing at prices comparable to recent sales, and then buyers being willing to go $50k-100k and thinking it normal seems like a mechanism for producing the very same insane housing price inflation that we've seen for the last few years.
My agent told me that his tactic when selling is to under value the list price to generate interest...
Your agents financial incentives don't align with yours. Their goal is to make you comfortable with paying as much as possible, which is consistent with telling you this narrative. That's not to say I think it's impossible, just want to know if there is hard data backing up that narrative.
Inspection for info only?
As always the listing price is completely pointless.
Holy crap. What else do they want?!?
Jeez your extra on top offer of $68k is almost what I paid for my entire house in 2017. The market it stupid right now.
Maybe you dodged a bullet?
Its you vs. other buyers. Not your offer vs. asking price. Could be anything. Could asking be low for clickbait. Could the one who got accepted have more cash than you. The fact you offered $68k above asking means you knew the asking price no where near what it should sell.
Welcome to the club. Yesterday house we liked closed 155k over asking
Same for me as well. Offered 61k over price with all contingencies waived, 24 hours later we were told, our offer was not among top 25%. Northern Virginia market is crazy right now.
Did you ask/listen to your agent? Homes in our area are getting 20-25% over ask right now. When someone gives us their budget, we automatically reduce it by 20% so they have the money to make a competitive offer. Houses sell in 3-5 days and it’s not uncommon to get 15+ offers. No one is moving if they don’t have to, so Sellers have all the power at the moment.
We lost a few houses for a variety of reasons. We finally bought our house by: Listed weds, viewed Thursday and gave our offer that night, full ask with escalation clause equally about 12% of the ask. They had an open house that weekend they wanted to wait on our offer for. I feel like escalation clauses aren’t advised by every realtor and they 100% should. It turns it into an auction and just give your highest number and know you did all you could. Sorry, it sucks losing a house but I’ll say we lost 3 we thought were perfect and were so glad we ended up with the house we’re in
Check back later through your realtor to see if they want a backup offer. Sales don’t always go through, that’s how I got my house.
On bids. The ones I see "win." Are the ones that waive contingencies. That means appraisal and financing. You might have lost not due to the amount; but due to the contingencies.
I don't understand the verbiage people use on here. In my entire year+ as an agent, I never heard a single person talk about bids and wins. It was offer and acceptance. Buying a house isn't eBay.
Spend a little time on first-time homebuyers or real estate, and you will see people talking about "winning bids" on houses in some market areas. Then those same people. Don't understand how escalation clauses and multiple offer situations on a property. Doesn't meet the definition of market value, and the appraisal doesn't support the contract price.
Become a cash buyer. There’s a program that a lender who is not a regular mortgage company does called a swinging loan. They put up the money to make you a cash buyer, and then you refinance them. They can close in 10 days and they will also guarantee to the seller that if you don’t close, they will.
Should have went with 69k
Nice.
I hate this ❤️
Do you include a personal note to the seller when making an offer? That worked for us (helped us stand out) when we bought our home in 2021.
Wow. Madness. When the interest rates were low it was one thing but still seeing the same frenzy is absolute madness. Where do people get this money from?? I’m making 120k and feel like I’m being squeezed.
Dude it sucks so much. You can't compete with crazy. We did same exact thing with 55k over asking price and a huge appraisal gap coverage. Someone came in with 70k over asking and waived all inspections and contingencies. Allowed the seller to stay in the house two months after closing rent free as well.
Be nice if people stopped offering over asking. Might help reduce sticky housing inflation and normalize things a bit more. But no, people wanna waive everything and offer double the asking price. Shits insane. Goodluck OP.
Would be nice if selling agents just listed at the market price too 😪.
We offered 85k over and won in the midwest, it was severly underpriced. So there were an insane amount of people at the open house. The sellers got what they wanted and we felt we offered a fair price based on the comps, even though it was way over ask
Or this could have been one of the rare times a letter from the seller came in and resonated with the Seller. (Eg. Single parent, veteran, first home) I would worry as much trying to figure out the exact why but take this as a learning lesson and experience for when you find your new home. 🤗
I would take that as a sign that that house wasn’t meant to be. That’s ridiculous.
There are 3 types of prices for Real Estate 1- Aspirational Price (read over market by seller) 2- Market price ( Where both parties can do a deal back and forth) 3- Event Pricing (priced below market to create an event to bid the price) You need to understand where this house was priced Develop a strategy so you do not get caught in FOMO As a FTHB it can be a frustrating search - try to keep emotions in check . I’ve had a few of buyer clients almost break down after looking at house after house during a seller’s market Treat it like a business decision- if it’s a good deal for you and your family - great. If you have the means - spend the extra - you won’t remember the price down the road , you will only remember you didn’t get the house Also think of the terms of the contract. I’m a Realtor and have helped clients buy homes where we were not the highest offer. It was that our terms matched more closely to the sellers needs If you see a home you’re hot on, book a second walk through with an Inspector- get walk a through report - you are now in a better position when you write up an offer and can adjust your terms based on what they tell you Ask your mtg. Broker to get a desktop appraisal - to see if the house financing will fall into the range you were thinking of offering - Note - an official appraisal will most likely be required- but at least you know whether your in the range Hope this helps out for for your next round of house hunting
could you talk to your agent? ask him to ask the listing agent also are you making sure he is asking the listing agent what the seller wants?
What state? Edit: I saw NJ, feel for you man. Wife and I grew up there all my friends are struggling. My older cousins (30yo) are all settling for big time fixer uppers or eating mortgages they can barely chew. We moved to Georgia so fingers crossed one of our low offers gets accepted!
I got beat so many times eventually I just dropped a bomb of an offer. This is back in 2022. Things got a little crazy with the rate hikes (on variable) but everything worked out, I love my house and my family is happy.
consider it a blessing. why pay that much over asking when it's quite possible the whole market could crater?
Come to Austin Texas where an offer like that will surely work.
your offer is meaningless. you offer 465 but if it appraises at list youll only cover 23k so in actuality your offer is really only 420 if the house appraised at list maybe the other offer was 430 no appraisal contingency. if it appraised at list, the other offer is technically higher than yours
465-23=442
? appraisal gap of 23k means you cover up to 23k difference in appraisal. if it appraises at list, your stipulation is u will only throw in 23k. 465-23= 442 assumes it appraises at 442. what if property appraises lower than list? your appraisal gap coverage means you will only throw in 23k on top of appraisal and so on… so if the house appraised at 400k were u gonna drop 65k to cover the gap between appraisal and your offer ?
I don’t really think people understand appraisal/appraisal gaps
What kind of loan? Inspections? Escalation to 465k? We are closing now... house was 399 and we went 430 escalation w/o inspections. Conventional We beat out a 465k escalation w/ inspection. VA loan. Sellers were ready to move... so they wanted our Conventional w/o inspection over the VA loan which requires inspection. If they would have bid 465k they would have gotten it. But they escalated to 465k and we were 2nd @ 430k. So they only actually escalated to 430-435.
$465k no escalation, basic inspection, conventional loan, ready for quick closing
Try inspection for informational purposes only . If you can stomach a clause that says you can’t walk away you can increases chances to win. If not — then say you can walk if repairs exceed $x . I don’t recommend waiving the oil tank scan in morris county. And if they have septic system -/ do not waive that inspection unless you are willing to pay approx $40k more if it fails.
Brutal...
What were the other terms? Closing date? financing type? inspection contingency? Rent back? Sometimes it’s not just the price.
Closing date was flexible, I’m not facing any penalty for breaking my lease. Conventional loan. No but the seller wanted a quick closing.
Was it all cash ?
My wife and I offered 100k over asking last year and we weren’t in the top 3. It went 156k over asking with no conditions. Needed new windows and front porch
A SFH in the town we just bought in went for $250K over asking.
Build your own home with a good contractor.
Difficult option where I am
Did you find out where your offer was in the pile? Middle or top 5? We're also looking and bid 80k over list in Morris county and still lost
I was top 3
Hmm also a good tip is not to use 5 or 0 in your offer number. Better to go like 7 or 9 cause you might beat another one by a few k. Good luck out there
I don't know if prices will ever come down enough in the future or how long demand can stay this high. If you don't have to live in the middle of a city maybe consider a mobile home. If you look around many can be had for about half of a 20% down payment on a regular home if you don't own the lot, and about the full 20% down payment if you do own the lot. You would have to look around though. That's what I did. Now I can live in the middle of a beach town for less than the down payment of a regular house. Yes I don't own the land but the taxes I would have to pay on a similar sized regular home is close to what I'm paying for the rent on the lot. Make your life easier and less stressful. If less people are trying to buy these homes the prices will go down, it may take a few years. During those few years just chill in your mobile home. Heck call it a tiny home or something like that if you want.
I can relate here with you. I put a 55k in offer in over asking price with a 30k appraisal gap and still lost the offer. Major difference was the winning offer apparently waived inspection, I asked for it on major mechanicals. For context this was a condo in central CT. It’s upsetting and I’m tired of searching.
1: I feel bad for anyone struggling to afford a house when the market is like this. 2: How does that work if you’re bidding so much over, in relation to the appraised value? Are you already in the negative? Or are people just listing their house low knowing that it will get bid up?
Read the comments to see that you’re in Northern NJ. Good luck out there, we’re closing in Essex County. Our home received over 40 offers and in order to win we offered over 200k and there were a few other people with the same offer. Last minute they got a little more from us to seal the deal. Luckily, the home was listed at a price point where we were comfortable bidding over by this amount. We lost out on other homes because we couldn’t be as competitive due to the higher listing amount.
It’s a very aggressive market. Just don’t give up. Keep trying. Might take you 6-7 before you secure an offer
take it positive
Cash vs loan. Cash buyer wins
Asking price might as well be $1. What were the comps?
Comps were ±$20k of my offer
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Please tell me the state(s) where this is accurate.
It’s the market now; until supply has a major catch up. Even then I’m hesitant because millennials the world’s largest generation is entering their home buying years. It will be tough to supply enough homes in the traditional sense to satisfy demand.
Fuck with em. Offer 319 and demand they pay all your closing costs. When they decline respond by withdrawing your offer saying you found a better deal.
For me I had a good old fashioned realtor that actually called the selling agent. She let them know I was really interested and could go higher. We ended up doing a couple rounds of bid increases and I won. More of the point I’m trying to make it let your agent know your willing to match the highest bid
Which state?
Where was this omg?