We’ve got a new baby in 2020 and no longer fit into our old house. The timing was terrible – we are in the Seattle area and the market is crazy here (well, even more than usual) – people have to bid 100-300K over asking and waive everything to win a dream house.We ended up buying one for the asking price and just went into the mutual agreement on the old one for ~8% over asking. If we didn’t have to upgrade I’d give up months ago.
Buying. We decided to buy before selling because 1) temporary housing for an unknown period of time, two moves with 2 kids, a cat, and a dog seemed too hard 2) financially we’d likely be losing by selling too early on this market. We’ve got some equity from the old house for downpayment and appraisal buffer (HELOC, it took 2 months though because lenders were overloaded with refi requests). It took us a few months to find anything – we’ve made several offers – no contingencies, some with ridiculous escalations (lost in bidding wars or got rejected because of 20% down – didn’t demonstrate enough proof of funds, check out learnings below).We ended up accidentally winning an offer on the house that 1) was not perfect – not the top choice: noisy road nearby, but great everything else 2) listed on top of the market – i.e. attracted fewer buyers. We’ve got it close to the listing price with no competing offer. Selling. I saw many posts here wondering why sellers list so low, provoking bidding wars. The truth is we had no idea what’s good listing price and followed estimate and other houses lead. Our house was never that popular before – it is old enough, split-level, fully remodeled but 10 years ago. You can’t make split-level perfect (low ceilings, layout). It’s also on the street which might appear noisy according to our agent. If we list too low and get only one offer – we’ll lose. If we list to high we’ll get no offers and lose, so we just picked the Redfin estimate as the list price. Agents can only advise, but the responsibility is all ours.
So we’ve got several offers and apparently, we picked the lowe one (20K lower than we’d get with other ones), but the least risky one that waived everything, we’ve got 8% over asking on it which was beyond my wildest dreams.
When you buy, don’t emotionally attach too much – pick a house that’s not perfect, but you can live with it. If you ABSOLUTELY LOVE the house, likely there will be others with the same sentiment and they’ll likely overbid you. It’ll probably take a few tries to win the house. That’s fine – you’re learning what’s important and what you can compromise on. You have to have enough for a 20% downpayment and any appraisal gap – the more the better. Put higher downpayment or make your agent communicate clearly you have enough to cover the appraisal gap. We lost one house just because we put a 20% downpayment on the offer letter and sellers didn’t know we can put more to cover the gap. I’ve also had to ask our selling agent to check if the buyer I liked has enough funds because it was not immediately clear on the offer and it ended up being the winner offer. Love letters work (on me). I got one letter, it touched me and looked up buyers – they were in the same professions and company as me and we had common friends/colleagues. I wanted and sold my house to this person. I looked up other buyers too. If they had no love letters/digital presence demonstrating they are nice people, I had no hard feelings rejecting their offer. If you’re a seller – don’t look them up or read love letters if you want to pick an offer purely based on the financial side. Waiving contingencies is a good alternative to high prices. We picked a lower offer just because it had no contingencies. Why? We got more than we expected anyway and wanted uneventful closing with a smaller chance for buyer to back out. We used professional staging, cleaning and fixed all known issues, including major stuff (new roof). Not sure if it helped, I hope so.
Happy to answer any questions, unless it reveals my identity. Good luck with your buying/selling!