Hey all,
I'm about to lose it. Before anything, you guys need to know I'm looking in Denver. Real estate is insane out here.
Little background about myself – I'm 22 turning 23 next month recently graduated from college with a business degree, minor in information systems. I got a job in Denver working in IT making 60k and got approved for a loan up to $350k putting 3% down.
I've been renting a room the whole time I was in college (5 years) which was always $500 a month in a shared 4-5 bed/2 bath house across the street from my uni. I've worked the whole time so I've been able to save up and pay for school leaving me with ~20k in student debt. The plan was to find an apartment with a friend. This would cost us ~$1000 each for a 2 bed in downtown Denver. I liked the idea of this as living downtown would be fun, I could afford it (20% of my income) and I've lived in a old neighborhood the whole time I've been in Colorado.
I was talking to my parents just as I was about to sign the lease and they told me to buy a place as I'm graduated, working full time, could get approved for a loan and have some $$$ saved up, they even offered to help. This frustrated me as I had things lined up. Next day I'm talking to a mortgage broker saying I'm prequalified up to $350k on my own with down payments as low as 3%. But at the same time I wasn't opposed thinking it could be a great investment.
Fast forward a couple weeks, I found a couple places I liked. My biggest thing was finding somewhere ~$150/sq ft. I found some nice houses > 2,000 sq ft but not in the best part of town. I found a townhome in a nice part of town for $300k. Proceeded to make an offer for asking price only to find out someone else offered $2000 more. They counter offered an additional $5k and I declined. They go through with the other contract. I find out from my realtor the other offer is from a joint tenant contingent upon their parents being able to get a second mortgage for them.
This is where I lost it. They would rather accept an offer from someone who can't finance the place themselves than an individual who is fully qualified all for an additional 2 grand. The broker offered me to be the back up if their contract fell through at $305k – 5k more than my original asking price offer and 3k more than what the other buyer offered.
This place was dope and I've been looking constantly and don't think I'll be able to find something like this anytime soon. My lease is up in a month and I have no where to go. I'm looking at renting with friends again which doesn't even sound too bad considering it will cost almost the same as HOA fees, mortgage insurance, home insurance and taxes alone.
My questions:
- As a real estate broker, aren't you inclined to accept an offer from a potential buyer that is in a more secure financial position?
- If the contract were to fall through – doesn't that look bad to your client that you accepted an offer that a buyer was unable to finance?
- Should I pay the additional 5 grand to secure the property should the contract fall through? I love the place but after all this headache this has caused I'm pissed. Yeah I'm young and a first time home buyer but don't take advantage of me. I might be the only other offer they have but what are their other options? Put the property back on the market and wait for more offers?
- Are we in a housing bubble? People keep saying prices are this high because of how low the housing supply is and how high housing demand is and construction can't keep up.
TLDR: submitted asking price offer for property and was beat by someone offering $2k more contingent upon their parents getting approved on a second mortgage
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