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Buying and selling in a hot market

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  • Buying and selling in a hot market

    I thought it might be interesting to add experiences, insights for navigating today's hot market.
    -Selling: The offer waiving a home inspection that sounded so great may not be all that. I just heard from my realtor that the lender is requiring an inspection. Conventional loan with 20% down so I'm surprised but there isn't much I can do. It is a full reno so unlikely anything significant or that the contractor won't fix but I'm still plucked that this is even an issue.
    Last edited by StateOfMyHead; 10-28-2021, 07:42 PM.

  • #2
    I would never buy a house without an inspection from an inspector of my choosing. You may be doing a full reno but that money pit can always be deeper.

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    • #3
      Originally posted by CordMcNally View Post
      I would never buy a house without an inspection from an inspector of my choosing. You may be doing a full reno but that money pit can always be deeper.
      In this case I’m selling the property that I have already renovated so hopefully no major issues. One of the main reasons I accepted this offer was the buyer waived their right to an inspection so now to hear the bank is requiring one is surprising and annoying.

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      • #4
        Originally posted by StateOfMyHead View Post

        In this case I’m selling the property that I have already renovated so hopefully no major issues. One of the main reasons I accepted this offer was the buyer waived their right to an inspection so now to hear the bank is requiring one is surprising and annoying.
        I get it now. I thought you were buying a property. I'd sell a property all day without an inspection.

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        • #5
          one question is just how hot is the market? in some places cash buyers are ready to waive inspections.
          “. . . And the LORD spake, saying “First shalt thou take out the Holy 401k. Then shalt thou save to 20%, no more, no less. 20% shall be the number thou shalt save, and the number of the saving shall be 20%. 25% shalt thou not save, neither save thou 15%, excepting that thou then proceed to 20%. 30% is right out . . .””

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          • #6
            Originally posted by blippi View Post
            one question is just how hot is the market? in some places cash buyers are ready to waive inspections.
            They did in fact waive the inspection, conventional loan so I thought no problem...welp now bank, not buyer, is requiring inspection. Something I didn't see coming when I selected this particular offer. Probably not a huge issue in this case but unexpected and again not something I considered when accepting this offer.

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            • #7
              Originally posted by CordMcNally View Post

              I get it now. I thought you were buying a property. I'd sell a property all day without an inspection.
              That was my exact thought when I jumped at this offer and now the plot thickens. I figured it might be worth giving others a heads up.

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              • #8
                potential problem now may be an inspection would have to stay on record if the deal falls through (at least it does where i am). if your market has buyers who don’t need banks and will waive inspections may be worth considering going back on market.
                “. . . And the LORD spake, saying “First shalt thou take out the Holy 401k. Then shalt thou save to 20%, no more, no less. 20% shall be the number thou shalt save, and the number of the saving shall be 20%. 25% shalt thou not save, neither save thou 15%, excepting that thou then proceed to 20%. 30% is right out . . .””

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                • #9
                  Question: Any offer with financing will require an appraisal. In a hot market, it seems the appraisal and inspection requirement would both come into play from the lender/buyers perspective. If I understand, the buyer needs to come up with any excess over appraisal in cash and it leads to a buyer tending to want to back out.

                  I have heard in the past of appraisals causing deals to fall apart. Any anecdotes regarding appraisals now?

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                  • #10
                    Originally posted by Tim View Post
                    Question: Any offer with financing will require an appraisal. In a hot market, it seems the appraisal and inspection requirement would both come into play from the lender/buyers perspective. If I understand, the buyer needs to come up with any excess over appraisal in cash and it leads to a buyer tending to want to back out.

                    I have heard in the past of appraisals causing deals to fall apart. Any anecdotes regarding appraisals now?
                    Yes unless paying cash they really can’t waive the appraisal. I have heard some will add that buyer will pay XXX amount in cash to right the appraisal if needed.

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                    • #11
                      We had a news item recently about a sale that fell through when they couldn't get financing even though it wasn't conditional on financing.

                      ​​​The buyers were surprised that they had to make up the difference in the price when the house eventually sold. They thought they would be able to just walk away for free.
                      ​​​​​​
                      It's weird how people don't seem to understand that the contract for the most expensive purchase of your life is actually a contract. I had to push my realtor to do what the contract said I had to do to waive the conditions.

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                      • #12
                        In the past 5 months I've sold my parents primary residence and their two rental condos. My dad passed away in May and my mom has dementia, so she is now in assisted living. The only difference I found with the "hot market" is that we got offers near full ask very quickly and priced 20% higher than they were probably worth a year ago, everything else was very similar to when I've bought and sold other houses in the past with inspections and appraisals. The condos had been airbnb style rentals on the beach, so both were in need of some TLC, neither buyer seemed to care, one was cash. I priced those both fairly aggressively compared to the redone units in the buildings so the financed unit appraised easily. The house was also in need of repairs, I had to come off all sorts of things to appease the buyers after a bad inspection report, though the house was obviously a fixer upper to anyone that walked through it. Of course my do nothing realtor was very gung ho about listing until we actually listed, then it was "give it away, do all the repairs, let them have whatever they want." in a supposed hot market. I felt like I could have said no and they still would have bought it or we could have relisted and sold it again, but I was eager to be done managing properties 2,000 miles away. Sounds like you have a renovated house which is a different animal - so let them do the inspection - it doesn't mean you have to agree to repair anything.if another buyer is likely willing to jump on it if the deal falls through.

                        Regarding appraisals, when i sold my last house (2017, pre-hot market) it was fully renovated and probably overdone, so I knew it wouldn't appraise, but that neighborhood was extremely desirable to people, and there were always jewel houses like mine that would sell way out of appraisal range. My buyer was cash, and was upset about paying my asking price but I wouldn't budge. They requested an appraisal and I said fine - and of course it didn't appraise - and again I didn't budge. They backed out of the deal, then came back a week later and still bought it in the end.

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                        • #13
                          I was looking to buy in the next 90 days or so in Central Valley California but it looks extremely depressing any suggestions thoughts?
                          thanks

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                          • #14
                            Originally posted by nastle View Post
                            I was looking to buy in the next 90 days or so in Central Valley California but it looks extremely depressing any suggestions thoughts?
                            thanks
                            Buy when you're ready to buy a house.

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                            • #15
                              Originally posted by StateOfMyHead View Post

                              That was my exact thought when I jumped at this offer and now the plot thickens. I figured it might be worth giving others a heads up.
                              Your agent should have known better

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