08-19-2011 10:50 AM
My wife and I are 1st time homebuyers. We found a townhome that was PERFECT for us, only to find out there were 2 other cash offers for it. With this being our 1st home, we obviously couldn't compete. We were hurt, but continued to look for something else in the same area.
To our surprise, we found another townhome, in the same complex, that we liked even more than than the 1st one. Even though this was a shortsale, this suited or situation just fine because we were in no rush to move in. We did our research on the home and found something that caught our attention. The listing agent listed the home at one price, then dropped it 25k on the same day, then raised it 50k the next day, then raised it 25k two days later. My initial thought was, "is this guy confused?" The final listing was still within our price range so we decided to proceed.
We had our agent contact the listing agent and we we're told that we were the only buyers. We presented our offer which was denied the same day because of a minor issue that we quickly fixed, then sent back to the agent the same day. The next day, the listing agent left a voicemail with our agent and said, "I have good news". Our agent called him and the listing agent tells him, they accepted ANOTHER offer and that there was MULTIPLE OFFERS for the home. It's safe to say that we are hurt, upset and confused all at the same time.
With this being our first time in the housing market, I wanted to know, is this fair to a 1st time homebuyer? If so, how? Our offer wasn't even considered or presented to the bank even though we were told we were the only buyers. To me, this sounds like discrimination, but I could just be caught up in my own emotions.
Can anyone please provide some insight on this? It would be GREATLY appreciated.
FYI - The home isn't sold yet. It's currently listed as Pending with release (This is the 2nd time it's been listed as that).
08-19-2011 10:57 AM
not much in RE industry is fair to any buyer, I'm would be 1st time buyer as well, but not asking for any preferences.
just go on with your search and after a while such thing would not hurt you any longer....but do make conclusion when you vote next time.
08-19-2011 10:58 AM
If this was a short sale, you shouldn't feel hurt at all. The Bank will still need to approve the sale and I have seen short sales sit in Pending Sale status for many months and even have seen no approvals by Banks. You would have been sitting in escrow for possibly a long time waiting. Consider yourselt lucky as you are free to keep looking
08-19-2011 11:02 AM
It is discrimination. It's discrimination against non-cash buyers when cash buyers are available.
Is it fair? I don't even know what that means. Sellers have one goal: to sell. Sellers aren't selling to provide first-time buyers with homes. Cash sells more easily than financed transactions.
I know the feeling. I'm a first-time buyer. While currently under contract, I had many things vanish from beneath me. But I wouldn't suggest that sellers must consider offers in forms they don't prefer.
08-19-2011 11:16 AM - edited 08-19-2011 11:50 AM
i am cash investor and let me give u the view from the other side of the fence
imagine if you were seller, do u want to deal with:
1. loan that fell through due to:appraisal, lost job etc
2. 'i found better deal' buyer that suddently back out by making up any reasons
3. 'i can squeeze more dollars by trying to point out bunch of other problems while my offer has been accepted' buyer
4. 60 day uncertain window 'lets hope this buyer doesnt back out' feeling, before it is closed
OR do u want:
1. Fast 10 day closing, no inspection, no appraisal, no 'please credit me back', no 'opps i found better deal so i cancel', no drama just cold hard cash
2. Ok i have to reduce 10-20k but in this economy, I will take 10-20k less price for certainty!
For me, if I were a seller, it would be no contest unless the offer is 30k or more.
Dont be mad, its called free market
08-19-2011 11:41 AM
Good point @4rent.
If I were to sell house, I'd actively avoid 1st time buyers. Too much emotion, nitpicking the last cosmetic detail, way too much drama. Dealing with pros, which a large percentage of cash buyers are, is much easier IMO.
08-19-2011 11:52 AM
I wouldn't call it discrimination. It's just sellers making the best decision for them. They didn't list their home for sale to help out buyers. The sellers are looking out for their own best interest.
08-19-2011 12:44 PM
As a first-time buyer, I understand 4rent's comments. We are a nervous, seemingly nit-picky lot, since we are still learning the ropes. I don't believe however first-time buyers are more likely to back out because they found a better deal than investors. Investors are more likely to drive a hard-bargain due to their experience.
It's a house, you didn't get it. Move on and find another one. There's nothing unfair about it. Hopefully a windfall or two later you will be on the other side of the fence, and can use the weight of your green to swing a deal your way!
08-19-2011 01:06 PM
1. A first-time buyer and cash buyer can be the same thing.
2. As a first-time buyer, I might take longer because I haven't read the 125 pages of disclosure 10 times before, but I don't think I'm more likely to back out. I want a house, and if I can manage to get an offer in and accepted in this market, I'd probably be more scared I won't get another chance.
3. I've seen at least one sale where the seller preferred "a couple with kids". She was 101 and probably didn't care about how much money she got but that her house went to someone who would care for it as she did. If I were a seller, I would probably be the same way. I've no desire to line the pockets of the rich with a rental or a quick renovate and turn-over.
Guess you just have to find a seller who cares about their house enough to care about who takes their house next.
08-19-2011 07:16 PM
Maybe a first time buyer might not back out because they found a better dea. However they do back out and tend to want everything. I've seen young relatives make offers and then back out. One did so about ten times before he realized he wasn't ready to buy.
We've sold to first time buyers. One freaked out over because all the screen doors didn't match and demanded that we install matching screen doors and they wanted the window sills framed in wood. The other produced a long list of items to "fix." We had already lowered the price and gave them concessions. We said no and they threatened to back out and we said go ahead. Then there were the ones who backed out because they wanted a pool.
I don't believe however first-time buyers are more likely to back out because they found a better deal than investors.