Been trying to buy a house because my rent is going up(and it will continue to do so) and a mortgage would be around the same as what my rent will become in a few years anyway so I figure I might as well build equity and have a house for my family.
Thing is the current housing market is nuts. Houses are put on sale with strict deadlines of “accepting all offers due 12pm 5 days from now” creating a false sense of urgency and to top is off the process is super opaque. You dont know what other people are offering so unlike an actual auction you cant start low and hopefully get a good value. Nope it’s a black box and the asking price isnt of any help because that was just an advertising tactic to get more people to look at the house.
So you have to do research based on past history of other homes sold in the area of the same type recently and then place a competitive bid based on that. Of course everyone else is also doing that so you have to make your bid “competitive” and give a little more. How much more is hard to say and you only really get the one bid. So 12 pm comes along and the anticipation in your stomach is insane because this could be it you could be a homeowner and you did put in a competitive bid, and then sometime between immediately and just before bed you get a message saying they went with another offer.
ITS SO DAMN FRUSTRATING! Houses that I bid $30,000 over asking price and someone still swooped in and bid even more. And of course since the process is a black box you dont get told what bid beat you out or what the other bids were(dont want the 2nd place bid to decrease their bid in the event the 1st place falls through). You’ll find out eventual final sale price a few months from now when everything finishes closing. I imagine the issue is other people got frustrated with the game over the last few months and now if they see a house thats ok they go all in with their max offer instead of a smart offer.
Oh and the market is limited, but somehow out of sheer coincidence after one round of sales is done the realtors manage to find another round of homes to put on the market. I’m convinced the realtors are limiting the supply on purpose and letting homes trickle in because the ACT NOW PUT IN THE BEST OFFER OVER ASKING tactic probably doesnt work as well if there are more than a handful of homes for sale at a time.
Its so frustrating I just want a house to live in and raise my soon to be born child, and Im willing to pay you what you’re asking for it! The worst part is the housing market in my area shot up a lot over the years. So these people playing bid wars are making 100k profit AT LEAST for a house they bought just 5 years ago! And then theres the old people who bought the house for pretty much nothing 30+ years ago
Sorry for my long wall of text rant
I’m not sure what market you’re in or what your budget is, but the pains that you’re talking about (other than the actual price of the houses) can be mitigated by working with a competent realtor. You want someone who both knows that particular market and also knows how to identify comparable sales. That means knowing the neighborhoods you’re looking at as well as prices and trends.
I’m not a realtor, but I did buy a house fairly recently in an extremely hot market. People here will bid $300k over asking and waive all contingencies. That’s just the nature of the market right now - at least in some areas.
Basically, look at the asking price but use something like redfin or zillow to get their estimation of what the selling price of the house will be. The sites will also (try) to show you comparable houses. The sites tend to err on the high side with estimated values, but if you’re not in a market that’s open to bargain hunters it will be close.
It’s a big step - probably bigger than it should be. I believe that the majority of American families have the majority of their net worth invested in their house.
Closed bidding is how it’s always worked, though. Generally, the people selling the house will pick the top two or three offers and make a counter-offer or otherwise solicit additional offers. When a market is hot, they can additionally push for a quick closing. As a rule of thumb, you’ll probably spend less for houses that have been on the market for a while, but you can likely expect the same kind of issue when it comes time to sell it. If you buy in a desirable market where houses sell within a few weeks, you’ll again probably see that kind of thing when you sell. Bargain hunting in real estate - waiting for the chance to get a smart offer approved - can lead to you being frozen out - or worse, getting taken for a ride that more informed buyers are staying away from. It can be like buying stocks in that way, except with hundreds of thousands to millions on the line with a single investment.
Anyway, find a realtor you can trust - possibly through a referral. Ask around at work or something if none of your friends has someone. It makes the process a lot smoother. This depends on the state, but the seller may pay the realtor’s commission, and in any case should be considered part of the cost of buying a house.