House Buying: Navigating A Crazy Market

In my annual goals post back in January, I wrote for one of my 2015 objectives:

“Start looking into what it takes to purchase a house or condo.”

I’ve made progress on all of my goals so far this year, but little did I know that I would go far and beyond exceeding this goal.

Well, sort of.

Not only have we’ve started to look into the house buying process, we dived head-first into the adventure back at the end of May. In the past four five months, we’ve 1) found a realtor, 2) found a bank, 3) walked through approximately 40 60 80 or more homes, and 4) conducted an estimate on a fixer-upper listing and pre-inspections on two others, and 5) put in an offer on three four different properties.

FOUR offers. You would think that after four very strong offers (alright, maybe only 2 or 3 were really strong), I would be the proud co-owner of my first home. But that is not true. The Seattle housing market is so fierce that I’ve heard multiple stories of people placing over a dozen offers and still not finding their dream home.

Thankfully, I’ve at least gotten something out of it: I’m learning the Seattle market. I know (relatively) where I want to live. I know my likes and dislikes, and I understand important things to consider when touring a house. Going through so many different scenarios has allowed me to see various aspects of the business, like submitting an offer with a renovation loan vs. traditional loan.

One Week.

If the house is priced correctly, that’s all the time you have to tour the home and assemble an offer.

The typical week looks something like this…

Thursday/Friday: Houses go up on web sites like Redfin, and you spend some time going through the new listings and identifying houses in your price range that meet your criteria – location, size, price, etc. Some have open houses, some will not. Some will have a review period, some will not.

Saturday/Sunday: Attend a million open houses and, if your realtor is available (she/he should be!), tour other homes as well. (Or, better yet, get your realtor to tour them for you first, if you trust them to know your needs and desires well enough to determine if the home is right for you.)

Monday/Tuesday: If there were any homes you really enjoyed, start talking to your realtor and arrange a pre-inspection on the home so that you can waive the inspection contingency to make your offer stronger.

Mid-week: If the pre-inspection goes well, decide to move forward with submitting an offer, meeting with your realtor to nail down your strongest possible numbers. There are a lot of key factors at play here: how much earnest money are you going to put up front? Will you do an escalation clause, or put in a straight offer? (So far, we’ve not yet put in a straight offer.) If you are doing an escalation, are you going to start out at list price, or start higher/lower? What is your absolute maximum you’re willing to go? How quickly can your bank close?

Hint: If the market in which you are looking to buy is competitive, pick a bank that’s local to the area you’re living in, potentially one that your realtor has worked with previously. A local bank understands the current market and will be more willing to work towards a quick close and seamless process.

Wednesday/Thursday: After your offer is submitted, if there is a review period, prepare for increasing anxiety all day leading up to the time in which the selling agent is going to be reviewing offers with the seller.

Wait for an hour or two.

If you’re like us, you either won’t get a phone all, or your agent will call you with bad news.

That’s it. Houses come on the market and within 7 days they go pending (in many cases – unless they are priced entirely too high).

Will it ever end?

Hopefully soon! Maybe the next time I write a blog post, I’ll be a proud homeowner and can share my success story. Let’s cross our fingers.

Until then,

— Robert, forever a renter

(November Edit: We’re finally pending on a house!!!)

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