I thought the main sticking point of car production right now was silicon chips, not anything to do with the standard line production of cars.
I think when you hear homes are insta-selling for above ask, it does influence buyers to submit at their max as they know that if they submit too low, they won’t get a chance to increase offer.
I think there is also the fear among buyers that if they don’t buy now, prices are just going to keep going up, so when they find home they like, no reason not to bid max as if you wait, the next home will only cost more.
I don’t really see how to avoid “blind bidding,” unless every offer is made public. Recently, some prospective buyers for my condo gave offers with escalator clauses, although I believe their top prices were listed right in their offers, since there is no RealtorBot to handle the offers confidentially as there is with Ebay.
Nonetheless, we just said “LOL, just resubmit with your best offers.”
From as far back as I can remember until a few years ago, it was standard for homes to sell for less than the asking price. It’s hard to guess the sale price for a unique, illiquid asset.
Ok the reason why it might be cheaper to do 20% is that it would be a jumbo loan. Which still doesn’t make sense but I might not be able to qualify for?
We got our house for under asking price. I always thought the asking price was a good benchmark, but I could see how it wouldn’t be in hot housing markets.
If you’re thinking of Chicago market, it hasn’t been nearly as crazy as other big metros. I was not that seriously looking in the area a while back and I was amazed at how reasonably priced everything was.
First price vs second price auctions ITT.
My theory is that it’s underlisted on purpose to get more interest (but you can’t go too low otherwise you’ll scare off potential buyers) and once you get people interested, the market will set the rate, so the fact that you started a bit low doesn’t hurt and may help you (by getting more people interested).
Although my realtor with 30 years experience could well appreciate a bidding war, she was somewhat lost about how to price my objectively tired looking condo because there were really no good comps for my place since relatively few sales were made in the past 12 months, at least in my part of southern NH.
Rather than prepare a technical, written report (like I received when I sold my martial home), she simply showed me two other condos sold in the past couple of months and suggested a listing price somewhere between the sales price of this one crappier and this one nicer condo.
sold!
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Everything is annihilated right now whether it has microchips or not. In the last couple months we’ve been quoted lead times of up to three years on new equipment. And it seems like every single proposal I write is getting accepted. Crazy times.
On the other end of the spectrum, there is a house a few doors down from mine that has been on the market for about 7ish weeks now.
8.5% over ask, 10% down, waived inspection, 45 days of rent back for the price of Free!
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I’ve been following the real estate in my area religiously and there are some crazy price discrepancies.
A bunch of comparable houses on the same street sold for $300k-310k in Jan/Feb 2022 and then another comparable house just said fuck it and listed for $425k in March. It sold for $370k at the beginning of the month.
Hard to believe rates were below 3% for as long as they were
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still waiting on my closing date…
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I would think so. I bought a couple years ago with rates below 3%. Very much wanted to negotiate a purchase price without regard to the deal I was getting on interest payments but I was competing in a market where everyone thinking of monthly payments could bump their budget up 20%. I closed with the seller in the room and he was like “I bet you’re getting a great interest rate” and I was just thinking “fuck you, that benefit’s going straight into your pocket.” Also was forced to sell a few months ago and it was hard enough finding a buyer with the right budget back then. I don’t think there’s any chance I’d be able to get the same price for it today.
Sure, this should reduce the amount of demand for sfh in most markets. However there is still a very low supply issue in a lot of places that will cause prices to continue to rise imo. I just lost another offer yesterday on a home listed at $789k which sold for $1.070M. There were 15 total offers, 3 escalated into 800k-900, 9 at 900k-1M, and 3 more >1M. So it’s not like there is a shortage of buyers at the end of the day.
And fwiw, I’m VERY close to just saying “fuck it, I’ll keep renting” since the monthly cost is quickly getting pushed above a number we’re comfortable with due to the mortgage rate hikes. I’m going to feel so sheepish for holding this much cash for so long. My poor opportunity cost.
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So these are all cash offers? The mortgage company isn’t going to just write a blank check if they don’t think the home is worth that much, right?