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What the **** am I missing.....?

What the **** am I missing.....?

Old Sep 11th 2012, 4:44 am
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Default What the **** am I missing.....?

Hello-

For the past 3 months my wife and I have been looking to buy a place in San Ramon / Pleasanton / Danville..Naively we started to look for something sub 500 and we quickly realized that, that won't cut it for us. Min 3 bedroom, Min 1500 sq foot and preferred in top school areas so we are talking Old San Ramon, Windemere, Gale Ranch, older Danville etc.

We looked at 30 + places and made 3 offers and lost all of them. The worrying trend we see here is we have next to NO inventory and people are not only bidding up the prices on good places but for all three times we lost, people gave same $$ offers and chose to waive appraisal contingency.Clearly, being first home owners, we are not going to waive appraisal.

What is wrong with Bay Area. We are so frustrated! I am, for the heck of it, start to compare here with Plano, TX...and I can not believe how over priced this place is. I moved here by choice but very much questioning if the sunny weather alone makes it worth while!!

Arrrrg...
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Old Sep 11th 2012, 5:53 am
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Default Re: What the **** am I missing.....?

Originally Posted by E3only View Post
Hello-

For the past 3 months my wife and I have been looking to buy a place in San Ramon / Pleasanton / Danville..Naively we started to look for something sub 500 and we quickly realized that, that won't cut it for us. Min 3 bedroom, Min 1500 sq foot and preferred in top school areas so we are talking Old San Ramon, Windemere, Gale Ranch, older Danville etc.

We looked at 30 + places and made 3 offers and lost all of them. The worrying trend we see here is we have next to NO inventory and people are not only bidding up the prices on good places but for all three times we lost, people gave same $$ offers and chose to waive appraisal contingency.Clearly, being first home owners, we are not going to waive appraisal.

What is wrong with Bay Area. We are so frustrated! I am, for the heck of it, start to compare here with Plano, TX...and I can not believe how over priced this place is. I moved here by choice but very much questioning if the sunny weather alone makes it worth while!!

Arrrrg...
It's such a sort after area people can be fussy when selling, in my area another hour north its a different story, I am in the process of buying a house and it appears to be relatively easy, after speaking with 2 other folk that have just bought in Grass Valley.
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Old Sep 13th 2012, 12:51 pm
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Default Re: What the **** am I missing.....?

Originally Posted by E3only View Post
The worrying trend we see here is we have next to NO inventory and people are not only bidding up the prices on good places but for all three times we lost, people gave same $$ offers and chose to waive appraisal contingency.Clearly, being first home owners, we are not going to waive appraisal.
It seems the height of stupidity for any buyer to waive appraisal contingency. OTOH, for a seller wanting a quick painless sale, I suppose an offer like that is a godsend.

Are you making your offers at the upper parameter of your ability to pay? If not, perhaps you could boost your offer a bit but keep the appraisal contingency. You could assume that the appraisal will find at least one issue that will knock the price down a bit, but the minimally higher offer might tempt the seller into accepting initially....? Just a thought.

We have some similar issues looking for a house on the east coast. List prices of near-hovels in the popular towns are so expensive! We're deliberately looking at short sales now, but then we're renting for a while & thus have no time pressure.

Last edited by WEBlue; Sep 13th 2012 at 12:54 pm.
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Old Sep 13th 2012, 3:12 pm
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Default Re: What the **** am I missing.....?

Originally Posted by WEBlue View Post
I
Are you making your offers at the upper parameter of your ability to pay? If not, perhaps you could boost your offer a bit but keep the appraisal contingency. You could assume that the appraisal will find at least one issue that will knock the price down a bit, but the minimally higher offer might tempt the seller into accepting initially....? Just a thought.
You mean a contingency that the place will appraise for at least the offer price? Sure, one can try that but if the market is hot the seller equally might not accept such an offer. I too would never make an offer without an inspection contingency.

The Bay Area house market - in good areas - is hot because mortgage rates are so low, the local economy is doing relatively well and the inventory of foreclosures/short sales has diminished. Will it last? I'm not so sure.
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Old Sep 13th 2012, 3:12 pm
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Default Re: What the **** am I missing.....?

Plano Texas isn't sunny?
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Old Sep 13th 2012, 3:50 pm
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Default Re: What the **** am I missing.....?

Originally Posted by Manc View Post
Plano Texas isn't sunny?
I didn't understand that quote either. I mean, if the OP moved to the Bay Area just for sunny whether then why bother? Lots of other sunny places in the US that don't come with the Bay Area's high cost of living. And as I live in San Francisco, I certainly didn't come for the "sunny weather"!
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Old Sep 13th 2012, 4:15 pm
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Default Re: What the **** am I missing.....?

Originally Posted by E3only View Post
Hello-


We looked at 30 + places and made 3 offers and lost all of them. The worrying trend we see here is we have next to NO inventory and people are not only bidding up the prices on good places but for all three times we lost, people gave same $$ offers and chose to waive appraisal contingency.Clearly, being first home owners, we are not going to waive appraisal.
Do you really mean waive appraisal, or waive inspection? If you are getting a mortgage the bank is going to insist on an appraisal to ensure that the value of the premises covers the money they are dishing out. And if you do mean inspection to ensure that the premises don't have any hidden disasters waiting to happen, that is the one thing that no-one should ever skimp on when buying a house.
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Old Sep 13th 2012, 5:46 pm
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Default Re: What the **** am I missing.....?

Originally Posted by Giantaxe View Post
You mean a contingency that the place will appraise for at least the offer price? .... I too would never make an offer without an inspection contingency.
Originally Posted by Nutmegger View Post
Do you really mean waive appraisal, or waive inspection? If you are getting a mortgage the bank is going to insist on an appraisal to ensure that the value of the premises covers the money they are dishing out. And if you do mean inspection to ensure that the premises don't have any hidden disasters waiting to happen, that is the one thing that no-one should ever skimp on when buying a house.
Oops yeah, my mistake, I totally misread "appraisal contingency" as "inspection contingency". Which did you mean, E3only?
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Old Sep 13th 2012, 7:09 pm
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Default Re: What the **** am I missing.....?

Housing has started to turn upward in the bay area so the seller can be more picky. Do you have a pre-approved mortgage (required in a rising market)? What type of mortgage and the amount down are you pursuing?

When I sold my townhouse about 6 years ago, I got two offers and the only difference was that one family required a 5% loan (even though they were pre-approved, the loan can still fall through) and the other had at least 20% down so with all other factors being the same, so the offer from the family with the large down payment was accepted to guarantee the sell.

It is crazy to waive appraisal since the bank will only loan a certain percent based on their appraisal so if the bank appraisal is $100,000 less than the selling price, you'd need an extra $100,000 to purchase the home. I've never heard of anyone waiving appraisal.
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Old Sep 13th 2012, 9:35 pm
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Default Re: What the **** am I missing.....?

.... discuss with your agent whether or not its worth doing an escalation clause to a ceiling amount.

by waiving an appraisal condition, make sure you have a satisfactory finance contingency to fall back on which provides an ability to terminate if necessary - most likely that is what the other offers are relying on should the worst happen as it normally goes hand-in-hand ... but know what you're waiving by how its worded and phrased because it all has legal consequences. (what you don't want is to waive the right to have a property appraised, either by you or a bank for their loan purposes)
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Old Sep 13th 2012, 9:41 pm
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Default Re: What the **** am I missing.....?

I think he must mean waive inspection. When we first came in 2005 and there was a property boom, a number of houses had this as a condition.
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Old Sep 13th 2012, 11:37 pm
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Default Re: What the **** am I missing.....?

Originally Posted by WEBlue View Post
It seems the height of stupidity for any buyer to waive appraisal contingency. OTOH, for a seller wanting a quick painless sale, I suppose an offer like that is a godsend.

Are you making your offers at the upper parameter of your ability to pay? If not, perhaps you could boost your offer a bit but keep the appraisal contingency. You could assume that the appraisal will find at least one issue that will knock the price down a bit, but the minimally higher offer might tempt the seller into accepting initially....? Just a thought.

We have some similar issues looking for a house on the east coast. List prices of near-hovels in the popular towns are so expensive! We're deliberately looking at short sales now, but then we're renting for a while & thus have no time pressure.
Yes - We are going all out on our offers. In some cases going beyond (family help). We don't mind that especially because our upper limit we set for us is something like 60% of what the bank would lend us...

It's a nightmare. the key problem is inventory...as soon as a decent place comes up, people snap it up!
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Old Sep 13th 2012, 11:38 pm
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Default Re: What the **** am I missing.....?

Originally Posted by Giantaxe View Post
You mean a contingency that the place will appraise for at least the offer price? Sure, one can try that but if the market is hot the seller equally might not accept such an offer. I too would never make an offer without an inspection contingency.

The Bay Area house market - in good areas - is hot because mortgage rates are so low, the local economy is doing relatively well and the inventory of foreclosures/short sales has diminished. Will it last? I'm not so sure.
Yes, t hat's right the issue is inventory and people just bidding up the price.
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Old Sep 13th 2012, 11:39 pm
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Default Re: What the **** am I missing.....?

Originally Posted by Giantaxe View Post
I didn't understand that quote either. I mean, if the OP moved to the Bay Area just for sunny whether then why bother? Lots of other sunny places in the US that don't come with the Bay Area's high cost of living. And as I live in San Francisco, I certainly didn't come for the "sunny weather"!
sorry, dont catch me in words.

My point was - people move her for weather, job opportunities etc etc...but the other side is they end up paying higher taxes and higher housing.

It was just a rant...
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Old Sep 13th 2012, 11:43 pm
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Default Re: What the **** am I missing.....?

Originally Posted by WEBlue View Post
Oops yeah, my mistake, I totally misread "appraisal contingency" as "inspection contingency". Which did you mean, E3only?
Here is the scenario. example only.

10 offers for a list price of 550K. we go in with 570K with APPRAISAL and INSPECTION as contingency with 20% down. Our mortgage is pre approved (and OKed by underwriting team so just need the property. deposit is ready).

Some of the offers are 575K-580-585K.

3 of us get counter offers "585K and NO appraisal contingecy and NO inspection contingency"....

My wife and I can not afford that. I said that because if it's appraises at 560K the bank wont more than the valuation so I have to come up with 25K cash payment. Being first home buyers and young couple we don't have that cash in thebank to throw.

It's a worrying trend. People are making cash offers with NO appraisal and NO inspection...We can not compete against that madness. Just can't do it.
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