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Your right Rick, in this market why would a seller accept a conditional offer. One: it could fall through and they've lost time, and that critical initial buzz when it first hits that sees dozens of people go to see it, most of whom go in firm (no conditions)
Again the Real Estate industry is to blame.
Bully offers work. But in order to tempt a seller to sign and forego the "bidding war" that can see their houses go for way over list you really need to sweeten the pot.
nuts
Discipline, discipline, discipline. My real estate rule is that no matter what, it is only worth what I say it's worth.
You may not buy many or any properties, however you'll not be caught losing your equity, credit rating and home.
You'll never get a place today thinking you'll get it for what "you" think it's worth. Trust me, been there done that. It really sucks!Quote:
Originally Posted by skypilot
Jben, luckily I'm in the position to be able to put around 50% down.
Rick, feel free to pm me if some night you need numbers crunched.
Anything, no matter what it is, is only worth what someone else is willing to pay. That's true in the stock markets, thats true in the job market, thats true in the real estate market. In normal RE markets a seller might think their house is worth $10. First they have emotional attachments ( its the house with so many memories), secondly its the house with that amazing backyard/view thats worth $3. Well only to people to think the same, to many people houses with green space aren't worth the premiums.....
I actually did hit the lottery Rick. Sky Pilot has been here, he knows what I paid for it. In my opinion the sellers weren't asking enough, I offered exactly what they were asking. When the bank sent their appraiser he appraised it at slightly more than I paid. That never happens banks "value" properties differently and part of that appraisal is "ok, if the person defaults, and we need to unload it what do we think it worth". Bank appraisals are almost always less to quite a bit less......Its similar to insurance, where they put a price on the bricks and mortar to rebuild but the inverse.
So not only did I escape a bidding war, I didn't over pay. If anything I got a steal and then some given the insanity out there. I have no doubt if I listed it tomorrow I could ask far more than I paid (without factoring in the 26% year over year appreciation or insanity).
I did something right in life, and the gods smiled on me that day.
Thanks Jben, I appreciate that. Sounds like you really lucked out. Hamilton is booming so I guess it depends on where you're looking to buy.
Booming is fine IF there are legitimate reasons for housing and rental unit values to rise rapidly. IF they rise only on the thought that they are "rising" therefore I must pay more is dangerous, speculative real estate and where unrealistic risk and economic danger exist.Quote:
Originally Posted by last5oh_302
It is one thing to buy high dollar housing if there are sound economic reasons. Like J posted , emotions are not a legitimate reason for a high price placed on a house and that is the current market especially in GTA.
They are out there, just be "mentally" pre-pared. It's more than a roller coaster and a crap shoot. There are places in Durham region where its 30,40,60 people bidding on the same house. As I said to R in the other thread.
Fear and Greed.
And it's our kids that are paying the prices (amongst others) for oh so much. Just glad Im out of the insanity (all of it).
Totally agree. The big city realty firms have teams of staffers monitoring every listing - MLS, private & 'other' - to ensure they don't miss a single opportunity for their clients.Quote:
Originally Posted by last5oh_302
Gone are the days of hoping you'll somehow stumble upon an underappreciated 'deal' that others have missed.
Even in a small town (Arnprior) outside a city (Ottawa) where real estate still isn't as out of control like Toronto... we ended up paying more than *I* believe this house to be 'worth'. Because sellers simply aren't budging on what they've been conditioned to believe their homes are worth. The realtors tell them that at minimum their homes should increase by X% per year.
Despite the fact that in the few years these ppl have been owners, their homes have developed foundation issues, or their shingle roofs are completely shot, or their 35 yr old plastic sliding windows that were "okay" when they bought the home are now beat up and literally falling apart, or the 35 yr old driveway that's never been maintained or properly sealed looks like a war torn Balkans highway in 1997... but yeah, "we put in a new stove and fridge".
There are a lot of pieces involved in this puzzle. No one cause or group to point the finger at. Essentially, if you hold firm - like i tried - you simply will not find a place to buy, and your wife will start to lose her shyte! :-D
simply will not find a place to buy, and your wife will start to lose her shyte! :-D
Fear and greed..................
Will say, over the span of 7 weeks (about how long it took us), we bid on a total of 4 houses. Some stats indicate that the average for people is 13........At which point they are well and truly desperate.
One of the first places we went to go see, we liked. She really liked it, I was "its nice but just doesn't feel right". We went back 2 days later to make an offer only to discover it had sold conditionally ( a rarity). She was upset at me for not making the offer right away and would remain so for weeks, especially as the pressure mounted. I had sold my place with a May 26 closing.
We bid on a couple others that I refused to budge on. Needless to say we weren't even close to be in the running.
Late April, still looking. We found a place in the country we both loved. Suspected/hoped there wouldn't be a bidding war. Put the irrevocable offer in. Sellers had until 7pm Sat night. Sure enough the young couple that was viewing the house just before us on the Friday it listed came in with a competing bid. I was bidding against them and their parents (who were also there to see the house, Im sure because they were helping with $$).....I offered $70,000 over ask. The Seller let us know it ws between our offer and the young couple and wanted to know if there was anything we would do...."not nessarily money" wink wink. Translation I was offering more $$, but would not go in firm ( wouldn't waive the well/septic inspections).....We lost.
She was in tears.
We both loved the house/property and the stress was mounting.
Literally the week we started looking at rentals (May 8th and with 2 weeks to go) and even they were going nuts, so much so we strongly considered renting a trailer at a park for the summer. See if things might normalize a bit, then go back in the market. This place hit the market Friday morning, offer was in by 7pm.
You might recall my weekly "insanity updates" on Facebook from last spring M, and the pics of just how lucky we were. Holding firm more than paid of me/us but realistically speaking......and she, my gawd the stress on her was....no words for it.
Where does it go from here?
I suspect worse, and I don't see the crash (correction yes, crash no) many are predicting. Too many moving parts, too big to fail ( if it crashes its going to be severe, a financial and economic) Nuke.... and more.
I get "sick" when I think about things ( we all know the topics) and what really, it means for our kids. I know a lot of young couples who are utterly SoL, no hope.
in time, 5-10 years who knows. Some things might be better, but for soooooo many.
Damage done.
Jben,
No one who's seen your place will argue. I fact I, as well as I'm sure many who've been are jealous. But yours is definitely a case of good karma.
I've been in the same house since 2009, but prior to that I could see it coming. Bought a house in Oct 2005, nothing needed, absolutely gorgeous, sold in May 2006 for 50K more than I paid.
The one rule I've always followed, and it's helped, is you always have to be willing to walk away. The usual realtor bunk lines "there's someone coming in with an offer this afternoon", "there's a couple coming by for a 3rd viewing, they may be bringing a deposit".....never let emotion drive a decision. "Thanks, but if that's the situation, then I'm not interested".....
In todays market, not sure how effective it would be. But I'm fortunate enough to be stable, and we'll likely stay put until I retire, at which point, it's take the money and get the heck out of dodge....out near my cottage which if anything is a depressed real estate market.
However, since buying my place in 2009, at a price of $265K it's now around $500, so I'm not going to complain....