Been trying to buy a house because my rent is going up(and it will continue to do so) and a mortgage would be around the same as what my rent will become in a few years anyway so I figure I might as well build equity and have a house for my family.
Thing is the current housing market is nuts. Houses are put on sale with strict deadlines of "accepting all offers due 12pm 5 days from now" creating a false sense of urgency and to top is off the process is super opaque. You dont know what other people are offering so unlike an actual auction you cant start low and hopefully get a good value. Nope it's a black box and the asking price isnt of any help because that was just an advertising tactic to get more people to look at the house.
So you have to do research based on past history of other homes sold in the area of the same type recently and then place a competitive bid based on that. Of course everyone else is also doing that so you have to make your bid "competitive" and give a little more. How much more is hard to say and you only really get the one bid. So 12 pm comes along and the anticipation in your stomach is insane because this could be it you could be a homeowner and you did put in a competitive bid, and then sometime between immediately and just before bed you get a message saying they went with another offer.
ITS SO DAMN FRUSTRATING! Houses that I bid $30,000 over asking price and someone still swooped in and bid even more. And of course since the process is a black box you dont get told what bid beat you out or what the other bids were(dont want the 2nd place bid to decrease their bid in the event the 1st place falls through). You'll find out eventual final sale price a few months from now when everything finishes closing. I imagine the issue is other people got frustrated with the game over the last few months and now if they see a house thats ok they go all in with their max offer instead of a smart offer.
Oh and the market is limited, but somehow out of sheer coincidence after one round of sales is done the realtors manage to find another round of homes to put on the market. I'm convinced the realtors are limiting the supply on purpose and letting homes trickle in because the ACT NOW PUT IN THE BEST OFFER OVER ASKING tactic probably doesnt work as well if there are more than a handful of homes for sale at a time.
Its so frustrating I just want a house to live in and raise my soon to be born child, and Im willing to pay you what you're asking for it! The worst part is the housing market in my area shot up a lot over the years. So these people playing bid wars are making 100k profit AT LEAST for a house they bought just 5 years ago! And then theres the old people who bought the house for pretty much nothing 30+ years ago
Sorry for my long wall of text rant
Stick to a firm budget, and don't go over it. We had a firm ceiling of $400k, looked at around 40 houses, and put in 7 offers before ours was accepted. It was listed for $375k, made an offer for $385k with a 24 hour expiration. Appraisal came back at $412k. We closed about 6 months ago, and it took us 7 months of looking at multiple houses every week to get to it. We were also using a VA loan, which turned some sellers off due to the added time for the VA appraisal and potential to either force them to fix things that aren't an issue for most people, or back out of the contract.
My wife was pregnant at the time (and miscarried two months later), so I get the added pressure of trying to find something NOW. Don't dig yourself into a hole that you can't climb out of for thirty years because of that pressure.
We got lucky with this one because the previous owners were going through a nasty divorce. I get the frustration, and it was disheartening as fuck constantly being outbid, especially after you like a house enough to tie yourself to it for decades. Our realtor was great, and knew most of the agents in the area, so he was able to get us some inside info on a few of the houses we looked at. If your agent isn't being transparent with you, find a different one.
Treat the search as a business transaction. You have a list of criteria, you're reviewing options within your budget that meet the highest number of your needs. If it doesn't meet your nonnegotiable criteria, don't bid. The most important one of those criteria should be that you like the house. Have a checklist to run down in your walkthrough (roof, crawlspace, foundation, visible water damage, age of HVAC and major appliances that will convey, etc), and try to weed out as many major issues as you can before paying for an inspection.
It's tedious, extremely frustrating, and disheartening. Eventually, you'll find one. You may have to compromise on some things, and it's ok to gradually improve the house after you buy it. Just make sure the basics are solid. Also, allocate way more time for painting than you think it'll take, especially if you're doing it without help. Everything will take longer than you think, be patient with yourself.
Be stubborn as fuck during this process, and be willing to walk away. I get that you want to get out of a lease (I rented for years, and it sucks compared to owning), but once most sellers are motivated to get shit done once they're under contact just as much as you are. They don't want to start the process over again either, especially because if a major issue is uncovered during an inspection, they are legally required to disclose it (my realtor threatened their agent with this fact over some mold in our crawlspace when the seller wanted to walk away instead of fixing it. He told them that he has access to their system and would personally make sure the next offer received a copy of the inspection report and would report the agent if they didn't disclose it).
This was great advice. Re:
> > > Have a checklist to run down in your walkthrough (roof, crawlspace, foundation, visible water damage, age of HVAC and major appliances that will convey, etc), and try to weed out as many major issues as you can before paying for an inspection. > >
I'd add to check out all of the mechanicals and find out when they were installed and last serviced. Usually mechanicals have an 8-12 year lifespan. Also find out when the roof was installed. These are pricey items to replace when you move in, so you really don't want to have to do that right away.
Also, check out a flood map for the areas you are planning to buy in and locate the houses you are interested in on the map. (This was one of the deciding factors for buying our house). Also, see if the land surrounding the house slopes towards or away from the house (obviously, sloping away is preferable).
Absolutely, great points. If possible, go check the house out when it's raining. Our first visit was during a massive storm, and we were able to verify that there was proper drainage/no water intrusion (crawlspace mold was from some mulch covering a crawlspace vent and some subsequent seeping).
Our roof was original, 20ish years old, and had some minor damage. No leaks or evidence of previous leaks, but we had it replaced a few months after moving in before it became a problem. We knew about it ahead of time and could budget accordingly, and could take the time to shop around for a decent price from a reputable company.
Side note: GO IN THE CRAWLSPACE OF EVERY HOUSE YOU LOOK AT. We waved off of at least a dozen houses because there were massive issues that I found in the crawlspaces (standing water, major cracks, infestations, temporary jacks holding up the house, you name it). Everything else can be perfect, but if the foundation is fucked, so is the house. Don't waste money on an inspection if you see major issues. If you can see it with an untrained eye, it's already expensive.
Thanks for the kind words and advice! My wife is pregnant as well which was part of why we started later in the season. Our old apartment rent used to be super favorable, but a change in policy caused our landlords to start upping rent to make yet more monies.
We have been setting a firm ceiling for ourselves based on budget as well and going through things. We've got an expected hopeful ceiling of 230ish(give or take depending on home) for what we hope to spend and a cap of $250k if the house is super updated(in a tasteful welldone way) and we can expect few repairs in the near future. I can only hope that as august pushes on that we weed out the people desperate to throw too much money down before school starts and that as the season slows sellers will be more willing to give to sell quickly.
Unfortunately the way things are I suspect people are more likely to just wait until next year unless they really gotta move.
Good luck man, hope you find something soon! Inventory will probably drop next month, but like you said, most people aren't going to move right after school starts, so competition should be lower.
VA loans are so fucking clutch.
Definitely. We still put about 10% down, and could have done 20%, but it would've drained our savings and kept us from replacing the roof and some aging appliances. Interest rate was close to market average, slightly below, but definitely put home ownership within reach for us
Shit. We didn't put anything down. And our rates were pretty good as well.
Mainly put some down to lower the monthly payment/total amount of interest on the loan
I get that. And we had been planning to save up for a deposit, but we were a couple years away from it. But she very quickly caught on to what we could do and jumped at it. At the time she was freshly divorced and remarried, and he ex had tanked her credit and depleted her funds, and I didnt earn much. Our financials have gotten much better, and we both contribute our fair shares to the household. We won't ever miss a payment or anything. And we live in a semi-rural community, so for what our house is, we are doing very well.
Makes perfect sense. We were fortunate enough to be able to live well below our means at my last duty station and save a lot of money. Glad you're doing well!