When my fiancée and I began house hunting as first-time homebuyers in December of 2020, we were told the market was extremely competitive. Little did we know just how bad it was.
This is a bonus feature as part of Inman’s Inventory Insanity series on the current supply shortage. Don’t miss part 1, Why are there no homes for sale in America?, part 2, Notes from exhausted agents on the front lines of the inventory shortage, and part 3, The secret economic forces fueling the housing shortage. And check back in the coming days for additional installments.
Everyone told me the housing market was competitive thanks to low mortgage rates and low inventory. They told me we’d have to lose some houses before we win. They told me it was normal for it to take six or more months to find a home.
I didn’t want to believe it, but they were right.
My fiancée and I started our house search as first-time homebuyers in December of 2020. Not the best time to look for a house, but to balance the lower inventory, I also expected fewer homebuyers in the winter months. We were renting and looking to buy in our same neighborhood in Alexandria, Virginia.
We started the house hunt. Our Realtor took us to dozens of home. We put in one offer $20,000 over ask, about $6,000 over the estimated appraisal value, and waived every contingency except the appraisal. We weren’t even a top offer — the house sold for $80,000 over ask with all contingencies waived.
On our second offer, we offered $40,000 over ask and waived everything. We weren’t even top two. The house went to someone who offered $106,000 over list price (at least $70,000 over the appraised value) with all contingencies waived.
At this point I was pretty discouraged. How would we ever find a house? I wanted to buy a home, but I wasn’t interested in paying astronomically more than a house was “worth,” or would appraise for.
So, it was time to think outside the box.
My next move was to send out a message on NextDoor asking if any neighbors were considering selling, and to let them know we’d be interested. Three people reached out with the offer to see and buy their homes off-market with no bidding war.
Unfortunately, these homes were either out of our price range or smaller than we were looking for. But I was encouraged to get the replies. Maybe there would be more.
Then, one day I was clicking “refresh” on the MLS website, as all avid homebuyers surely do several times a day, and a house popped up in our dream location.
My Realtor was able to make an appointment right away, she picked me up and we saw the house. I wanted this to be the house so badly, but it wasn’t. It needed significant updates, but was still estimated to sell for $100,000 or more over ask, which put it too far out of our price range.
I left super bummed. It was such a nice day out, I decided to walk home to clear my head.
On my walk home, I passed a house with a simple “For Sale” sign in the yard. Not a for-sale-by-owner, but not a formal-looking sign either. I snapped a photo on my phone and looked it up when I got home.
Nothing. There was no listing online. No photos. There was nothing posted on the MLS. So I sent the photo to my Realtor and asked her if she knew anything about it. She said the listing had expired a couple months prior, but she’d reach out to the seller’s agent to see if they were interested in showing it.
It turns out it was an estate sale. The house had been under contract but fell through because it didn’t pass FHA loan standards. Instead of putting it back on the market right away, the sellers decided to make the updates so that it wouldn’t fail again. They had just finished the updates and were getting ready to put it back on the market that weekend. Since we reached out, though, the seller’s agent said he’d let us have the first look.
The next day, the seller’s agent was doing his final walk-through of the property. My Realtor called me and asked if I was free in an hour to see the house with him during that walk-through. I ran over. Saw the house. It was exactly what we had been looking for. It needed some updating, but they were asking a fair price and didn’t seem to expect the price to escalate. As an estate sale, I think the constituents wanted to sell the house and move on.
We knew this was the one. If this house went on the market, it would surely be in a bidding war. We had to move fast.
My Realtor drew up the offer right away. We offered list price with the inspection contingency. My fiancée and I signed it immediately. And we got the offer in that night — the same day that I had gone to see the house. The seller’s agent took it to his clients and had it ratified two days later. Boom. UNREAL!
The next day we did the home inspection. It went well, and 11 days later on March 12, thanks to our fantastic lender, we closed on the house. I cannot believe we’re homeowners. And to think if I hadn’t walked home that day, this house would have escalated before we could even consider it.
Sometimes life has a way of working out, it just takes patience, a good Realtor and a little luck.
This is a bonus feature in Inman’s Inventory Insanity series on the current supply shortage. Don’t miss part 1, Why are there no homes for sale in America?, part 2, Notes from exhausted agents on the front lines of the inventory shortage, and part 3, The secret economic forces fueling the housing shortage. And check back in the coming days for additional installments.