Buying a Home in a Brutal Real Estate Market

Last year (and during my 2018 goals post this year), I shared how my husband and I were going to buy a home before our next lease was up.

Our lease is up in June so we got the ball rolling and got pre-approved a few weeks ago! It was exciting especially since I was nervous about the bank being hard on me since I was self-employed.

I hear it’s difficult for self-employed people to get a mortgage but I provided two years of tax returns and perhaps my husband’s 9-5 job income helped so no issues there.

I thought I’d share some updates on our journey so far because I feel like I’ve been so behind with everything lately. Since my husband works long hours, I do most of the communication with the real estate agent and our lender. I have to be available for showings, scan paperwork and answer calls and texts often which has made it difficult for me to keep up with my work and this blog so I apologize if I’ve seemed distant lately.

I haven’t really had much time for social media (outside of my reader Facebook group) and I’ve just been keeping my head down and trying to take things day by day.

I thought it would be interesting to explain the how the process in this type of market has been for us so far since it can be helpful for anyone else looking to buy a home in the near future.

A Brutal Seller’s Market

We’ve been pre-approved for a bit and it’s been such a rough, draining, and emotional process looking at houses.

I’m not real estate expert, but I’ve been watching the market closely during the past 2 years and it’s definitely a seller’s market in my area right now.

Houses are going like hotcakes so you can see something you like on the market one day, and it could be contingent the next if the seller accepts an offer and earnest money so you have to move FAST.

Plus, there are ridiculous bidding wars for most houses because there are too many buyers and inventory is only slowly trickling out.

On the bright side, home values are going up which is great. On the other end, a small part of me would just rather rent than overpay for a home but it could get worse as interest rates are already creeping back up.

Choosing a Real Estate Agent Carefully

If you are looking to buy a home soon, the number one piece of advice I can give you (other than to get your finances organized and prepared) is to choose a real estate agent CAREFULLY.

Don’t try to go into the process by yourself without an agent because when you call to get information on properties the agent will either ask to talk to your agent or ask to become your agent.

I called to check on a foreclosure property one day and the woman who answered the phone was very rude and basically hung up on me after telling me to have my agent ask those questions. Maybe I’m being dramatic but it’s almost like everyone has vowed to take an oath of silence to everyone outside of their little club.

Nevertheless, an agent is going to be that one person who will look out for your best interest and help you find a home. You don’t pay them a dime since they earn commission from the seller once you close on a home.

They will take you to showings, call and check up on properties and negotiate with the seller’s agent to help you submit your offer on a home you like.

When it comes to selecting your agent, be sure to do your research and ask people you know and trust for referrals. Make sure your agent has a proven track record and ask them important questions about their experience and request to talk to references.

My husband and I did none of this when choosing our agent. We simply walked into an open house last year and met him there. We took his card and decided to ask him to help us find a house when we got ready because we had a “good feeling” about him and figured he would look out for our best interest.

While I really like my agent as a person and do honestly feel like he will look out for our best interest, he has dropped the ball quite a few times while working with us and it’s been frustrating.

From being late to showings to not placing certain calls on-time, there have been a few hiccups that made me upset during the beginning. However, I took a step back and realized real estate agents are people with families and other responsibilities. Yes, us buying a home is a super important milestone but everyone is human and so far he has stepped it up a few notches and helped us find some really nice places.

If you feel like your agent isn’t working out for you, however, you can always switch which is something I don’t want to do in the future but would consider if things don’t work out.

Flop #1

The home buying process can be stressful and draining – and this is before you even get to the loan processing portion.

About a week after we got approved, our agent showed us a beautiful 3-bedroom 1-bath home. It was a little on the smaller side but it was completely updated, in a great neighborhood and within our budget.

There was even a gala apple tree in the backyard 🙂

The house was $168,000 and we eager to put an offer in on it. Here is a picture from the actual listing below.

That same night, our agent invited us to see another home first before heading back to the office to submit our offer.

This house was in our neighborhood and just went up on the market. It was built in 1996, had an open concept and 3 spacious bedrooms and a bathroom on the main floor.

As we went downstairs to check out the basement, we were pleasantly surprised to see a fully updated and finished basement with a bonus bedroom, another bathroom, an office nook, and even a full gym room. This house was listed at $179,000 which was at the top of our budget.

We figured the second house had everything we were looking for so we decided to put an offer on that one. On the way to the office, our agent called the seller’s agent and gave them a verbal offer of $183,000 asking for $3,000 in closing costs.

The agent said the seller accepted the verbal offer and there wouldn’t be any more showings.

The next day however, the agent called ours to hell him that the sellers wanted to show the home during the weekend, and eventually, someone beat out our offer.

What sucked was that we wasted time believing we would get that home and missed the opportunity to put an offer on the other home due to that confidence. As a result, we lost out on 2 great properties.

Flop #2

A week later, a new house popped up on the market about 5 minutes away from where we currently live. It was a cape cod style for $159,000 and looked like it could’ve needed some TLC from the outside as you can see from this exterior photo.

It didn’t have a garage and the driveway needed to be redone. There were no pictures online but it was listed as a 4 bed 3 bath so I was interested in checking it out.

After our agent told us that there had been 8+ showings for that day alone, we almost didn’t want to see it and get caught up in a bidding war but for some reason, we saw it anyway.

I was thankful we went because the home was STUNNING and completely redone inside. There were 3 floors, a spacious yard, laundry room, finished basement, and pretty much nothing left to but move in.

We put a bid in for $173,000 asking for $3,000 in closing costs. Surely, no one would outbid us if we agreed to pay $10k over asking price right? Wrong! In this seller’s market, the agent came back and told us someone had actually beat our offer but we seemed like more qualified buyers so she wanted to see if we could submit a higher offer and agree to close on a specific date.

We agreed on the closing date and decided to offer $173,000 with no closing costs included. The seller accepted the offer, yay!!

We started scheduling the home inspection which has to be completed within 5 days of getting an offer accepted and we transferred $1,000 in earnest money from savings. (This is commonly referred to as “good faith” money that you give to the seller to express your interest in the property while they hold if for you pending an offer approval. If all goes well, your earnest money can go toward your down payment when you close on the house.)

We were super excited and I told my son Jordan since he fell completely in love with the house during the showing.

About two days before the inspection, I was at the gym when I checked my phone and saw my husband forwarded me an email from the seller’s lawyer. It looked like a bunch of gibberish to me but long story short, the seller had canceled the contract for reasons “other than the purchase price”.

I felt my heart sink once I realized what the email meant.

We called our lawyer and she said the seller could legally do that within a certain time frame. We were pretty crushed, and I was kicking myself for telling Jordan about the approval.

There were some other issues that went on with the seller and that particular situation and it really crushed us. Throughout our communication and experience with the seller and her agent, they were very unethical and seemed to take advantage of the position they were in.

Deep down, I feel the seller went with an offer that was even higher than ours and it’s understandable that they’d want to get more profit on their home. My main problem was the fact that they accepted our offer giving us false hope, wasted our time, and almost screwed us out of the earnest and home inspection money.

Moving Forward

Those few flops were pretty hard for us, but I’m trying to separate emotions and getting ahead of myself from the logistics of everything even though it’s difficult.

It’s hard to not get emotionally attached to a home you’re going to buy and want to enjoy living in. It’s a huge investment but things fall through all the time and the bidding wars can really stretch your finances.

I’m grateful for this experience however, since it’s been fun seeing houses as a family but I learned my lesson to keep my mouth shut and not to tell my son anything until it’s time to close.

So far it’s has been a roller coaster but I know it will be worth it in the end. When we do find the one and I share the news, just know it took a lot to get to this point.

Have you ever experienced buying a home in a buyer’s market? Do you have any tips for not getting emotionally attached to properties when going to showings?

I’d also love to hear from any sellers because I know it can be just as overwhelming. Any difficulties when trying to sell your home?