Only way to win in this market is be ruthless
I wish I'd learned this 4 months ago. Looking in seattle and have been burned. Seen escalations go from 200k to 400k over asking. Here is your guide if you are looking just now. 1. Figure out your max out of pocket and monthly mortgage number. -- in order to fully leverage yourself, you must know what is your Fk it number, beyond which you won't go. 2. For every home that you are about to buy, calculate about 200k appraisal gap + downpayment to bank. -- homes are not going to appraise because of such stark rise in home prices. Do your research, get nearby comps and see what could be the potential appraisal from bank. Pro tip: certain banks are giving loans at 10% down payment of appraisal amount. Use this to your advantage. -- Your max out of pocket amount = 10% of appraisal + appraisal gap. 3. Be ready to pull the trigger ASAP -- One of the mistakes we made early on was being confused if like a home or not. More often than not, someone would swoop in and buy it before offer review date. -- know what you want so that you can move fast. 4. The bidding war -- if you somehow reach the offer date then you will be in for a brutal gut punch. If you thought the home is nice, so will others. A good indicator is the activity tab on redfin. If home had over 300 favorites, you're screwed. -- At this point you must ask yourself. Are you ready to put 400k over asking? Because that's what it's going to take. Does that price match with the math described above? Are you willing to empty your accounts just to get a home? 5. Learn to cope with defeat -- Even after learning so much about the market. I still haven't won an offer. Bid 5 times each time to be bettered by 100-150k from my best number. So it's not you, it's just the market. Initially it hurt so bad, it would affect my health. -- Have seen all my friends buy homes in last few years and now I feel I am priced out of buying a home and maybe I am, but there is more to life than buying a home. Don't lose sight of that. It will work out if it has to. It's much better to have a worrieless sleep in a rented home than to have a worrisome sleepless nights in a home you bought after you emptied your pockets and are uncertain about tomorrow and every market fluctuation feels like a jerk to you. Happy hunting guys.. be safe, happy and tension free :) Tc: 300k Yoe: 5
Good advice. Having a good understanding of comparables is key.
Curious.. what is your f-it price?
Just be patient and wait till the pendulum swings back. Believe me, buyers remorse will be strong this round for people who pay 100’sk dollars more than they should be. This is fomo and the patient will be rewarded.
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100k is 3333 a year and 300 a month
Reminds me of the 2018 summer I got my current house 130k below listing price in 2019 spring btw
You are right. Most people don’t know or ignore the small dips that happened in the past. They just look at 10-20 year view and argue it’s only going up.
How is my comment related to 10-20 year view at all? All I’m saying is don’t get the FOMO fever and bid crazily
I always bid 20% over my "fk it" number no matter what the house is worth. I have had no problem buying houses during the pandemic.
Op u should update your household tc as that matters
OP you only have 5 yoe. You can afford to take it easy and rent for few more years. Your net worth would be up a lot and you can even buy in a better area with your higher net worth and TC.
OP 5 offers is nothing, you’re still learning, be patient, this is a multi month game where you need to snag your 1 house for a price you’re comfortable with.
Suddenly I see so much inventory today - Northern prt
Also, would rather go for new constructions instead if bidding higer on 5 year old as they have heavy competition
Yes much less competitive on new construction. You can offer ask and win.
This is me :)