Deciding what to bid on a second home in an insanely hot market

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protagonist
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Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

We are on the verge of bidding on a condo that will come on the market, probably within a week.
The owner of the condo is a realtor who is doing some renovations and plans to list it for $415K. I imagine it will be move-in ready when it hits the market but only partially renovated.

Comps of all sales of similar units in the building that sold in 2021 are as follows (price and sales month):
$405K May
$348K April
$415K March
$330K Feb.
$305K Jan.

They all tend to sell as soon as they hit the market.

The one that sold for $415K was definitely more desirable than hers...it was totally renovated- all high-end. The one that sold for $405K was also more desirable- 10th floor vs 3d floor water views and otherwise fairly similar except with full kitchen and bathroom renovation- almost perfect. Hers is probably better than the others that sold this year, though we never got to see the others, just read what MLS descriptions were still available, and we are still waiting to see hers.

We bid on the one that sold for $405K. The asking price was $359K. We bid $375K with escalation clause to $391K (cash, no contingencies) and lost the sale (supposedly we were their 2d choice in an insane bidding war).

It is a ridiculously hot market.

Clearly she is pricing her condo a fair bit over what similar units have sold for in the recent past....I assume she is betting on the fact that so many people want to buy in that building compared with the available inventory (none on the market now) , that whatever price she asks, somebody will be willing to pay that or more and it will be a bidding war.

So from our perspective we are thinking of either offering way below asking price (like $375K) with an escalation clause to around $405k (more than fair price based on recent comps),betting that maybe nobody takes her bait and if they do we could wait for the next one to come on the market - but the flip side- we are thinking there is a good chance that we will lose the sale . But if we do lose it to someone who pays asking price or more it will encourage the next seller of an apt. in that building to ask even more. In other words, if we offered $406K for the better unit last month we would have gotten it. If she sells this one for $415K or more, the next time we bid on an apt. in this building the stakes may be even higher and the next seller will be even more brazen.

So the big question for us is whether to take her bait, offer top dollar and hopefully get the apartment , or bid less (still high based on recent comps) and risk possibly having to pay even more in the future, chasing the market, and potentially regretting not bidding higher in the past (like for the one that just sold for $405K with a $359K asking price).

Any thoughts on how to proceed, especially from those experienced in these sort of dealings? We are in no great rush, but we do want to ideally buy in this particular building, preferably within the next year or year and a half and ideally by December. It will be a second (winter) home.
DoubleComma
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Re: Deciding what to bid on a second home in an insanely hot market

Post by DoubleComma »

You really want a condo in this particular building then I would say pay up now. Put in an offer closer to asking price with escalation as high as your comfortable over the asking price. Will paying $10k more impact your finances more than the joy of getting the winter home desire?

If it’s truly worth $375k, difference between 375 and 415 is just a bit over 10%. We are seeing people paying 15-20%+ regularly right now.

Not knowing anything more than you shared here I think the seller will have zero issue getting $415 and maybe even more. Also, your right, if they get $415, the next person will want $420. This cycle will continue until it doesn’t, but hard to say when that will be.
Last edited by DoubleComma on Tue Jun 01, 2021 9:53 pm, edited 1 time in total.
stan1
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Re: Deciding what to bid on a second home in an insanely hot market

Post by stan1 »

If you want the unit and have cash pay now and stop playing this game.

However, you said this unit is on the 3rd floor. Do you want to wait for the next unit that has better views on a higher floor and bid-it-to-win-it on that unit?
PowderDay9
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Re: Deciding what to bid on a second home in an insanely hot market

Post by PowderDay9 »

Would you be upset if you bought it now and the value later drops to where it was pre-COVID? If not, then I'd go all out to make sure you get this next condo.

If it were me, I'd wait until a year or two since this is a 2nd home.
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

PowderDay9 wrote: Tue Jun 01, 2021 10:48 pm Would you be upset if you bought it now and the value later drops to where it was pre-COVID? If not, then I'd go all out to make sure you get this next condo.

If it were me, I'd wait until a year or two since this is a 2nd home.

I think the Florida real estate market has always been a series of boom and bust cycles.

This is a huge boom. But like the stock market, I think it is impossible to predict a peak. The boom, in my humble opinion, is due to several factors, and COVID is just one of them. Also to consider is rock bottom interest rates, and the fact that people with money have saved more than ever in recent history and they have such limited options for where to put all that money safely. Stocks, bonds and real estate are all risky in that way, and it is nearly impossible to find a safe haven likely to beat inflation. So whereas prices might normalize or plummet in a year or two, it could possibly take five or ten or a major event like a hurricane to trigger that. It's anybody's guess I think .
Tribonian
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Re: Deciding what to bid on a second home in an insanely hot market

Post by Tribonian »

We’ve never bought a vacation home during a hot market, always waited (3-7 years) for a down cycle. Are you in any particular hurry? Are there other places that satisfy your wants? Narrowing to a single condominium seems like it would restrict your choices a lot.
gips
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Re: Deciding what to bid on a second home in an insanely hot market

Post by gips »

we purchased an ocean view condo for around $450k but now realize we should have waited to purchase something w a better view for another $200k. fixing that problem, given the market is going to cost us $350k now. so i wonder if you should wait for a better view on a higher floor.

during our search, we looked at a realtor owned unit and it was priced $50k over market. we passed but i suspect someone purchased the unit by now.

i think the question of how high to bid depends a lot on your overall financial picture. if i loved the unit, i’d just get it done, prob $375k with escalation to $430k knowing full well that the next bust cycle brings a $100k loss...but who cares? you’ll be using the condo.
dogagility
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Re: Deciding what to bid on a second home in an insanely hot market

Post by dogagility »

Seems to me that this is a lifestyle question, and you have funds to pay for the lifestyle.

If this condo fits the lifestyle you want, make a bid that ensures you get it. If not, wait for something that fits your lifestyle better.
Last edited by dogagility on Wed Jun 02, 2021 4:40 pm, edited 1 time in total.
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RickBoglehead
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Re: Deciding what to bid on a second home in an insanely hot market

Post by RickBoglehead »

$2 million. :wink:

The market is currently crazy. People have lost their minds and are bidding without restraint. You should wait until it returns to normal, which it will.
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MarkerFM
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Re: Deciding what to bid on a second home in an insanely hot market

Post by MarkerFM »

protagonist wrote: Tue Jun 01, 2021 11:55 pm
PowderDay9 wrote: Tue Jun 01, 2021 10:48 pm Would you be upset if you bought it now and the value later drops to where it was pre-COVID? If not, then I'd go all out to make sure you get this next condo.

If it were me, I'd wait until a year or two since this is a 2nd home.

I think the Florida real estate market has always been a series of boom and bust cycles.

This is a huge boom. But like the stock market, I think it is impossible to predict a peak. The boom, in my humble opinion, is due to several factors, and COVID is just one of them. Also to consider is rock bottom interest rates, and the fact that people with money have saved more than ever in recent history and they have such limited options for where to put all that money safely. Stocks, bonds and real estate are all risky in that way, and it is nearly impossible to find a safe haven likely to beat inflation. So whereas prices might normalize or plummet in a year or two, it could possibly take five or ten or a major event like a hurricane to trigger that. It's anybody's guess I think .
I think this is a good summary. It sounds like you don't want to bid up to buy this unit because you aren't in love with it and are adopting a bidding strategy accordingly. If you are happy with it, bid as much as you can because others will be competing strongly. If you don't love it and can afford to pay more later for a more desirable unit, then wait and count on paying more.
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hand
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Re: Deciding what to bid on a second home in an insanely hot market

Post by hand »

Whatever you decide - consider making an offer now *before* it is listed.

Either make your best and final offer now, or a lowball offer with hopes of influencing the eventual listing price downwards.

There's typically a benefit to getting ahead of the competition, and possibly also a benefit if the realtor is able to do the deal as a private transaction and somehow cut out their broker because the property was not formally listed. That being said, realtors likely skew towards the risk taking end of the spectrum, so likely outcome is they ignore your offer, roll the dice and publicly list.
smitcat
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Re: Deciding what to bid on a second home in an insanely hot market

Post by smitcat »

"Any thoughts on how to proceed, especially from those experienced in these sort of dealings? We are in no great rush, but we do want to ideally buy in this particular building, preferably within the next year or year and a half and ideally by December. It will be a second (winter) home."
If you want to be moved in by December I would suggest a full price offfer within minutes of teh listing - if that is possible.
Many of these listings are now requiring a 'visit' by the potential buyer before making offers, some allow the visit to be made by the buying broker some do not.

If on the other hand you really do not care if you are in there or not for a couple of years we would wait it out. FWIW - we just bought in Florida as well and the bidding is tending to be consitently high but there are many leading bids that are rejected between contingencies and inspections.
unstartable
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Re: Deciding what to bid on a second home in an insanely hot market

Post by unstartable »

I wouldn't bid more than you think it's worth.

You can have a lot of nice other vacations for $400k+.
Topic Author
protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

Tribonian wrote: Wed Jun 02, 2021 12:08 am We’ve never bought a vacation home during a hot market, always waited (3-7 years) for a down cycle. Are you in any particular hurry? Are there other places that satisfy your wants? Narrowing to a single condominium seems like it would restrict your choices a lot.
Not really in a hurry, but I am 69 years old and want to enjoy all the winters left to me that I can.
We are considering 3 other buildings as well but that one is our favorite. We know the area well.
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

gips wrote: Wed Jun 02, 2021 2:37 am we purchased an ocean view condo for around $450k but now realize we should have waited to purchase something w a better view for another $200k. fixing that problem, given the market is going to cost us $350k now. so i wonder if you should wait for a better view on a higher floor.

during our search, we looked at a realtor owned unit and it was priced $50k over market. we passed but i suspect someone purchased the unit by now.

i think the question of how high to bid depends a lot on your overall financial picture. if i loved the unit, i’d just get it done, prob $375k with escalation to $430k knowing full well that the next bust cycle brings a $100k loss...but who cares? you’ll be using the condo.
I'm curious about the view issue. Is a higher floor really better?

I always assumed higher was better, but I did see a 2nd floor unit at one point in the evening and was still very impressed with the view....it's still water, water and more water, and perhaps better for viewing wildlife - birds, manatees, etc. (more intimate than if looking down 10 stories).

What are others' opinions about this who live on the water?
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Re: Deciding what to bid on a second home in an insanely hot market

Post by Bobby206 »

protagonist wrote: Wed Jun 02, 2021 9:51 am
gips wrote: Wed Jun 02, 2021 2:37 am we purchased an ocean view condo for around $450k but now realize we should have waited to purchase something w a better view for another $200k. fixing that problem, given the market is going to cost us $350k now. so i wonder if you should wait for a better view on a higher floor.

during our search, we looked at a realtor owned unit and it was priced $50k over market. we passed but i suspect someone purchased the unit by now.

i think the question of how high to bid depends a lot on your overall financial picture. if i loved the unit, i’d just get it done, prob $375k with escalation to $430k knowing full well that the next bust cycle brings a $100k loss...but who cares? you’ll be using the condo.
I'm curious about the view issue. Is a higher floor really better?

I always assumed higher was better, but I did see a 2nd floor unit at one point in the evening and was still very impressed with the view....it's still water, water and more water, and perhaps better for viewing wildlife - birds, manatees, etc. (more intimate than if looking down 10 stories).

What are others' opinions about this who live on the water?

In my limited experience it seems like higher floors are considered more desirable by more people. I, however, prefer lower floors. I'd rather have a closer view of the shoreline. It sounds like you plan to make this a long term ownership so do what you prefer. I wouldn't worry so much about future value and all that. Enjoy life!
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

unstartable wrote: Wed Jun 02, 2021 9:13 am I wouldn't bid more than you think it's worth.

You can have a lot of nice other vacations for $400k+.
True, but no equity, just money spent.
And we have had a lifetime of nice other vacations. We don't have a bucket list. If there were other places we wanted to spend our winters I would agree with you.
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Re: Deciding what to bid on a second home in an insanely hot market

Post by rascott »

Seems like you want a place, and you want it now. Which is fine.... go for it. You have the money and aren't in a place to wait around for years waiting for a prefect deal in a perfect market.

I think escalation clauses are ridiculous. If I'm a seller, I'm just going to counter back to you at your top range.... since you've now told me you are willing to pay that much.
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

rascott wrote: Wed Jun 02, 2021 10:29 am Seems like you want a place, and you want it now. Which is fine.... go for it. You have the money and aren't in a place to wait around for years waiting for a prefect deal in a perfect market.

I think escalation clauses are ridiculous. If I'm a seller, I'm just going to counter back to you at your top range.... since you've now told me you are willing to pay that much.
The seller has to show you their highest offer. True, an unscrupulous seller might get a friend or relative to write a bogus offer, but an honest realtor would hopefully not stand for that.
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unclescrooge
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Re: Deciding what to bid on a second home in an insanely hot market

Post by unclescrooge »

I bid 15% over list price and waived the appraisal contingency on a vacation home last week.

Offer didn't get accepted.
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Re: Deciding what to bid on a second home in an insanely hot market

Post by bltn »

protagonist wrote: Wed Jun 02, 2021 10:10 am
unstartable wrote: Wed Jun 02, 2021 9:13 am I wouldn't bid more than you think it's worth.

You can have a lot of nice other vacations for $400k+.
True, but no equity, just money spent.
And we have had a lifetime of nice other vacations. We don't have a bucket list. If there were other places we wanted to spend our winters I would agree with you.
I understand your position. We got a vacation home after traveling to a number of interesting places over the years. With the maintenance costs of our second home, we realized our travels would be decreased. Since we got our home , we've made very few vacation trips and haven t missed the additional travel. Prior to covid, we were spending about 20 weeks a year in our coastal home, maybe a bit more, as I m retired.

I guess the question is “Do you want the home or a bargain?” If you don t plan on selling the home anytime in the near future, paying an extra 40-50k for it now probably doesn t matter if you don t need the money. Get your home and enjoy your life.

Good luck.
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Re: Deciding what to bid on a second home in an insanely hot market

Post by rascott »

protagonist wrote: Wed Jun 02, 2021 6:49 pm
rascott wrote: Wed Jun 02, 2021 10:29 am Seems like you want a place, and you want it now. Which is fine.... go for it. You have the money and aren't in a place to wait around for years waiting for a prefect deal in a perfect market.

I think escalation clauses are ridiculous. If I'm a seller, I'm just going to counter back to you at your top range.... since you've now told me you are willing to pay that much.
The seller has to show you their highest offer. True, an unscrupulous seller might get a friend or relative to write a bogus offer, but an honest realtor would hopefully not stand for that.
Yes if they want to accept your offer..... but if I'm a seller I'm not doing that. I'm just countering at your highest number (assuming the escalation clause isn't triggered) . At this point you've already told me you will pay that. So I'm sticking to that number.
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

rascott wrote: Wed Jun 02, 2021 8:43 pm
protagonist wrote: Wed Jun 02, 2021 6:49 pm
rascott wrote: Wed Jun 02, 2021 10:29 am Seems like you want a place, and you want it now. Which is fine.... go for it. You have the money and aren't in a place to wait around for years waiting for a prefect deal in a perfect market.

I think escalation clauses are ridiculous. If I'm a seller, I'm just going to counter back to you at your top range.... since you've now told me you are willing to pay that much.
The seller has to show you their highest offer. True, an unscrupulous seller might get a friend or relative to write a bogus offer, but an honest realtor would hopefully not stand for that.
Yes if they want to accept your offer..... but if I'm a seller I'm not doing that. I'm just countering at your highest number (assuming the escalation clause isn't triggered) . At this point you've already told me you will pay that. So I'm sticking to that number.
And my response to that I think would be: "As per our signed offer, I will only pay that if you show me your second best offer and mine is only x dollars higher."
Since my offer would beat thesecond best offer regardless, a seller would be foolish to not sell to me at a lower price that would still beat all other offers, no? So it would seem safe to reject that offer without seeing the next highest. Unless I am missing something, that ploy on the part of the seller would not work.
jeremyl
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Re: Deciding what to bid on a second home in an insanely hot market

Post by jeremyl »

Bobby206 wrote: Wed Jun 02, 2021 9:58 am
protagonist wrote: Wed Jun 02, 2021 9:51 am
gips wrote: Wed Jun 02, 2021 2:37 am we purchased an ocean view condo for around $450k but now realize we should have waited to purchase something w a better view for another $200k. fixing that problem, given the market is going to cost us $350k now. so i wonder if you should wait for a better view on a higher floor.

during our search, we looked at a realtor owned unit and it was priced $50k over market. we passed but i suspect someone purchased the unit by now.

i think the question of how high to bid depends a lot on your overall financial picture. if i loved the unit, i’d just get it done, prob $375k with escalation to $430k knowing full well that the next bust cycle brings a $100k loss...but who cares? you’ll be using the condo.
I'm curious about the view issue. Is a higher floor really better?

I always assumed higher was better, but I did see a 2nd floor unit at one point in the evening and was still very impressed with the view....it's still water, water and more water, and perhaps better for viewing wildlife - birds, manatees, etc. (more intimate than if looking down 10 stories).

What are others' opinions about this who live on the water?

In my limited experience it seems like higher floors are considered more desirable by more people. I, however, prefer lower floors. I'd rather have a closer view of the shoreline. It sounds like you plan to make this a long term ownership so do what you prefer. I wouldn't worry so much about future value and all that. Enjoy life!
We're on the 3rd floor of the condo we're vacationing at right now & have stayed in the 3rd floor one other time. The view is all good but the noise from the other vacationers at the grills, pool or open area where kids play bothers me. I like the short time on the elevator rides when I take it.

I'd need to be up high enough that I can't hear everyone else or barely hear them because I like sleeping with the balcony door cracked to sleep to the sounds of the waves.
That's just me though.
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Re: Deciding what to bid on a second home in an insanely hot market

Post by rascott »

protagonist wrote: Wed Jun 02, 2021 8:56 pm
rascott wrote: Wed Jun 02, 2021 8:43 pm
protagonist wrote: Wed Jun 02, 2021 6:49 pm
rascott wrote: Wed Jun 02, 2021 10:29 am Seems like you want a place, and you want it now. Which is fine.... go for it. You have the money and aren't in a place to wait around for years waiting for a prefect deal in a perfect market.

I think escalation clauses are ridiculous. If I'm a seller, I'm just going to counter back to you at your top range.... since you've now told me you are willing to pay that much.
The seller has to show you their highest offer. True, an unscrupulous seller might get a friend or relative to write a bogus offer, but an honest realtor would hopefully not stand for that.
Yes if they want to accept your offer..... but if I'm a seller I'm not doing that. I'm just countering at your highest number (assuming the escalation clause isn't triggered) . At this point you've already told me you will pay that. So I'm sticking to that number.
And my response to that I think would be: "As per our signed offer, I will only pay that if you show me your second best offer and mine is only x dollars higher."
Since my offer would beat thesecond best offer regardless, a seller would be foolish to not sell to me at a lower price that would still beat all other offers, no? So it would seem safe to reject that offer without seeing the next highest. Unless I am missing something, that ploy on the part of the seller would not work.

This only works if seller is in a rush to accept an offer.

Let's say you offer $375k with an escalation clause capping at $405k. The seller just comes back to you with a counter of $405k. Even if they have no other offers on day 1, that's what I'm doing as a seller...as you've already told me you are ok paying that. So what are you going to do at that point?

Then you've got to either accept it or counter back again.

Seller is a realtor who likely knows the market... so they'll be fine not rushing to accept an offer day 1. Realtors typically keep their own properties active on market longer than they do for their clients. They know they've got a hot product so best to keep it open for bidding as long as possible.

I'm not saying there is much to really lose by your proposed offer... but don't expect it to really be seen as anything other than a $405k offer in the seller's mind.

Good luck. It's a crazy market.
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Re: Deciding what to bid on a second home in an insanely hot market

Post by snackdog »

We bought a second home on the coast for a good price in 2012. However, what we pay annually for property tax alone would be enough to cover our stays there (or elsewhere) in AirBnB of our choice so an indulgence. COVID has drawn in work from home people so prices have ballooned. Thinking about selling but we love the place and it is finally paid off and cash flowing quite well with some large rent increases recently.
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

Follow-up:

We had our offer accepted today.

Listing price was $415K.
We included an escalation clause up to $462K in our offer, because we really wanted the property (insane, I know. I just lost all street cred with true Bogleheads.)
Our offer was accepted at $437K, all cash. There were SEVERAL offers over the listing price. Some were higher than our offer, but they required financing, and the seller did not want to deal with financing.
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Re: Deciding what to bid on a second home in an insanely hot market

Post by ResearchMed »

protagonist wrote: Wed Jun 09, 2021 12:08 pm I owe you all a follow-up:

We had our offer accepted today.

Listing price was $415K.
We included an escalation clause up to $462K in our offer, because we really wanted the property (insane, I know. I just lost all street cred with true Bogleheads.)
Our offer was accepted at $437K, all cash. There were SEVERAL offers over the listing price.
WONDERFUL!
:happy

I hope you have lots of enjoyment, whenever you stay there.

Good news!

And no, you didn't lose any street cred here, at least.
All those careful savings are for a reason. This is one of the reasons!

RM
This signature is a placebo. You are in the control group.
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

ResearchMed wrote: Wed Jun 09, 2021 12:22 pm
protagonist wrote: Wed Jun 09, 2021 12:08 pm I owe you all a follow-up:

We had our offer accepted today.

Listing price was $415K.
We included an escalation clause up to $462K in our offer, because we really wanted the property (insane, I know. I just lost all street cred with true Bogleheads.)
Our offer was accepted at $437K, all cash. There were SEVERAL offers over the listing price.
WONDERFUL!
:happy

I hope you have lots of enjoyment, whenever you stay there.

Good news!

And no, you didn't lose any street cred here, at least.
All those careful savings are for a reason. This is one of the reasons!

RM
Thanks, RM!
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Re: Deciding what to bid on a second home in an insanely hot market

Post by andypanda »

Image
furnace
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Re: Deciding what to bid on a second home in an insanely hot market

Post by furnace »

Bidding wars are a symptom of the US Dollar is being debased and devalued at a rapid pace.
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Re: Deciding what to bid on a second home in an insanely hot market

Post by Olemiss540 »

Congrats! Thanks for the follow up. That is a heck of an escalation clause but happy you are happy with it!
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Re: Deciding what to bid on a second home in an insanely hot market

Post by dogagility »

protagonist wrote: Wed Jun 09, 2021 12:08 pm We had our offer accepted today.
Good for you! You can soon enjoy the sunny beach life! :beer
The more flexibility you have the less you need to know what happens next. -- Morgan Housel
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

dogagility wrote: Wed Jun 09, 2021 6:51 pm
protagonist wrote: Wed Jun 09, 2021 12:08 pm We had our offer accepted today.
Good for you! You can soon enjoy the sunny beach life! :beer
Thank you, dogagility!
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

Olemiss540 wrote: Wed Jun 09, 2021 4:32 pm Congrats! Thanks for the follow up. That is a heck of an escalation clause but happy you are happy with it!
Thanka, OM!

We know the market there, and we know it was the only way we would have any chance of getting it. And if we bid lower, the bar would subsequently be set higher and we would have had to bid even more on our nest try (this happened to us twice already!) There were at least a few higher offers than ours, but the seller did not want to deal with financing.
stan1
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Re: Deciding what to bid on a second home in an insanely hot market

Post by stan1 »

protagonist wrote: Wed Jun 09, 2021 12:08 pm Follow-up:

We had our offer accepted today.

Listing price was $415K.
We included an escalation clause up to $462K in our offer, because we really wanted the property (insane, I know. I just lost all street cred with true Bogleheads.)
Our offer was accepted at $437K, all cash. There were SEVERAL offers over the listing price. Some were higher than our offer, but they required financing, and the seller did not want to deal with financing.
I'm curious how that worked, how did the escalation clause stop at $437K when there were higher non-cash offers? Did you state that you would only escalate against other all cash offers?

Congrats, I think you did the right thing. You saved a lot of pain and suffering that comes with losingo out on offers and have the condo you want.
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

stan1 wrote: Wed Jun 09, 2021 8:25 pm
protagonist wrote: Wed Jun 09, 2021 12:08 pm Follow-up:

We had our offer accepted today.

Listing price was $415K.
We included an escalation clause up to $462K in our offer, because we really wanted the property (insane, I know. I just lost all street cred with true Bogleheads.)
Our offer was accepted at $437K, all cash. There were SEVERAL offers over the listing price. Some were higher than our offer, but they required financing, and the seller did not want to deal with financing.
I'm curious how that worked, how did the escalation clause stop at $437K when there were higher non-cash offers? Did you state that you would only escalate against other all cash offers?
No, but the seller is a realtor and she was honest enough to admit that she didn't consider any offers with financing. She sold it with my stated escalation clause based on the most desirable offer to her.

Congrats, I think you did the right thing. You saved a lot of pain and suffering that comes with losingo out on offers and have the condo you want.
That's what we think. We wound up spending more than we initially were ready to spend, but it's equity (which is different than regular spending), and since we can easily afford it we figure it is a sensible lifestyle decision regardless of what it is objectively "worth". He who dies on a pile of money does not necessarily win.
dogagility
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Re: Deciding what to bid on a second home in an insanely hot market

Post by dogagility »

protagonist wrote: Wed Jun 09, 2021 10:08 pm We wound up spending more than we initially were ready to spend, but it's equity (which is different than regular spending), and since we can easily afford it we figure it is a sensible lifestyle decision regardless of what it is objectively "worth". He who dies on a pile of money does not necessarily win.
Very well stated. Rest easy, my friend. :beer
The more flexibility you have the less you need to know what happens next. -- Morgan Housel
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protagonist
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Re: Deciding what to bid on a second home in an insanely hot market

Post by protagonist »

dogagility wrote: Thu Jun 10, 2021 6:56 am
protagonist wrote: Wed Jun 09, 2021 10:08 pm We wound up spending more than we initially were ready to spend, but it's equity (which is different than regular spending), and since we can easily afford it we figure it is a sensible lifestyle decision regardless of what it is objectively "worth". He who dies on a pile of money does not necessarily win.
Very well stated. Rest easy, my friend. :beer
Thanks! *smile*
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