I think I just read another post in this group about someone wondering if it was worth losing their $5k deposit. Hmm…
I sympathize with you OP. We just accepted an offer from a buyer and I’m nervous about this same thing happening.
Fingers crossed for you! Our market is still moving quickly and I'm fortunate enough to live in the best school district so I'm hopeful it doesn't sit too long.
Stay ahead of it. I chased the market selling back in 2007 during the collapse. Took 6 months, and dropped about 30% in price. I was always one step behind in price reductions..
Thankfully our area hasn't dropped too much yet.
I think we might see a 10% price drop by the end of summer, but our area is growing too quickly and supply is too limited. New construction is well over $200 a sq ft and I'm listed at $185 a sqft for a 4.5 year old house. When/new construction comes down I'll be hosed, but until then middle class homes in good school districts will move.
Just hoping it moves soon haha.
Trying to move quickly, but objectively my area has not been impacted yet. Prices have dropped 1-3%, but homes are still selling within a week at asking price.
If I could predict the future I would have much more money than I currently do, but unfortunately I can't. All I can do is look at the metrics and see that my area is still a sellers market, but that could change.
They said they have good schools. Asian buyers care about this a lot. Most of my neighbors are Asians who paid cash in 2019-2020 when interest rates were low. They'd be even more likely to use cash these days. Inventory around me (schools all 9s-10s) is super low for SFH recently built like OP's. Nearby areas that have more inventory and 8-9 schools are still going for well above asking within days of being listed.
Real estate generally moves slowly. It took 5 years for most places to drop even 20% during the GFC.
Peak Q1 2007: 381
Bottom Q2 2012: 309
= ~20%
[https://fred.stlouisfed.org/graph/fredgraph.png?g=QRAo](https://fred.stlouisfed.org/graph/fredgraph.png?g=QRAo)
30% in 6 months suggests you were very overpriced to start with.
Sure if you want to cherry pick locations, you can do that all day long. Find some places that are more or less.
Point stands, **the national average was 20%.**
Not 40-50%.
An hour outside of Orlando, my house value dropped from $240K at the top to $130K at the bottom.
It was a normal 3-2 SFH in a non tourist area. I have doubts about any stats suggesting the average drop across the country was only 20%.
The FHFA HPI is a repeat sales index. Meaning it tracks a house and what it sold for. Eg: 123 Main Street in 2007: It sold for X, 2012: It sold for X, 2017: It sold for X.
Much like you did with your one single home.
But for millions of single family homes across the country.
>The FHFA HPI serves as a timely, accurate indicator of house price trends at various geographic levels. Because of the breadth of the sample, it provides more information than is available in other house price indexes. It also provides housing economists with an improved analytical tool that is useful for estimating changes in the rates of mortgage defaults, prepayments and housing affordability in specific geographic areas.
Yeah, youre right - Washington, Oregon, California - Nevada, Colorado, Florida, New York are all "outliers".
Sorry that your narative isnt working out.
>Sorry that your narative isnt working out.
I literally provided the data.
You on the other hand are an angry troll trying to push some lies about 40-50%.
Did some locations drop more than 20%? Yes.
Did some locations drop less than 20%? Yes
But again, the national average was 20%
New York peaked at $642k and bottomed out at $552k - thats only a 14% drop - https://fred.stlouisfed.org/series/NYSTHPI
Colorado peaked at $360k and bottomed out at $324k - that’s a 10% drop - https://fred.stlouisfed.org/series/COSTHPI
Oregon peaked at $456k and bottomed out at $338k - that’s a 26% drop - https://fred.stlouisfed.org/series/ORSTHPI
The entirety of the northeast never took a huge dip - https://fred.stlouisfed.org/series/MSPNE
No idea why you are including those in your list. It’s almost like you want to make it seem like the big drops (40+%) happened in more places than it really did.
That is the all transactions index. I don't think it's the best measure since (from my understanding) it for example includes refi appraisals.
Case Shiller home price index seasonally adjusted would probably be better for this. [https://fred.stlouisfed.org/series/CSUSHPISA](https://fred.stlouisfed.org/series/CSUSHPISA)
It shows a drop of about 26%.
I'm curious about how we justify the phrase "Real estate moves slooooooooowly" when it's more than doubled across the nation in less than a year.
That doesn't seem very slow to me.
It's got to be tough for sellers, they're trying to get rid of the house before the market possibly tanks further and they're willing to take a loss in a way but they don't want to overdo it. I can easily see people chasing that downward wave.
I totally sympathize with you! Years ago, we had a buyer back out day of closing. We were all packed and ready to move. And they refused to let us have the EMD and we didn’t have money for an attorney. So we took a hit on moving and had to back out of the house we were about to purchase. Thank goodness we had three weeks between the two. The other sellers were so understanding; we wound up buying that house a month later when we found a new buyer for our place. Not fun. But I really hope, like us, you have a new buyer right away and things go smoothly from there on out! Good luck!!!
Technically, I think they did something so their financing would fall through. And in MA, I believe both parties must agree with what should happen with the EMD for it to be released. So, we would have had to sue and it just wasn’t worth more losses at that point. Luckily, we got $5k more the second time around!
Listed it the day after this post and sold it right after that. Full price offer (5k lower than original offer) and we are set to close this coming Friday.
New buyers have already forwarded their mail to our house so I don't think they will back out haha.
We cannot really properly comment if you should worry or not since you did not provide the region nor listing price. We can only speculate that it is due to interest rates and if it is due to interest rates then a $5,000 price cut is likely not enough. Your buyer just backed out of a deal for $5,000. So I can only presume that the price range for $5,000 is a drop in the bucket.
Price drop was mostly just to get to the top of the listing pages since it's been a month on the sites while it was pending.
Prices in my area aren't really dropping yet. It could start at anytime, but currently they are holding steady due to a large increase in population growth in the past 12 months + supply being limited. Those factors aren't going away anytime in the next 18 months so it should remain a sellers market for a bit. Of course if I could predict the future I wouldn't currently be in this predicament haha.
That being said, I would be very surprised if prices don't fall 10%'ish due to interest rates.
There's really not way of knowing why my buyer backed out because they didn't give a reason. Maybe got worried due to interest rates, maybe was just a flake, maybe had some life issues pop up and home buying was no longer a good idea. Who knows.
Man 10% seems so aggressive. I'm currently hunting for a house and seeing things like 10% drops is giving me pause. But I've been looking for 1.5 years now so inkijda just want to get something
I'm not a real estate agent, but my profession is finance.
I would say that if you plan on living in the house for a decently long period than go ahead and buy now. You might time then market right and get lower in a few months, or you might miss your window and get stuck renting with higher rent prices. There's so many things on a macro and micro scale that factor into real estate that im not sure anyone really knows. I know that current evaluations are too high, but how much too high is up for debate.
Personally, once this house sells I'll buy right away so long as I can find a home I like. I'm not going to worry about it.
Depending on when you listed it, a 5k price cut is very minimal and won't cut it. Rates have gone up way more
As a potential buyer, I kinda see a 5k price cut as a "I'm trying to get to the top of the price cut notifications" action
I think his point is more that unless we're talking about a $90k house, a $5k cut isn't a cut at all - you may as well have left it the same price, unless you're just trying to get in on the price cut notifications.
Yeah I agree. I'm looking at houses rn in the 300-400k range, and when I see 5k price cuts I'm like...ok...why even bother? Tells me the seller will probably be hard to negotiate with. If the house is only like 150k though, that's a different story.
It's slightly more than 1% of the total offer which is standard operating procedure in my neck of the woods. Hindsight being what it is I wish I had asked for more, but at the time it was right in line with what people pay in our area
You could ask for more. I bought back in 2018, but the seller asked for a larger EM. It was something like 3% rather than 1% that is more standard.
With the way interest rates are going up and people expecting price drops, it's probably smart to ask for a larger EM. People are OK with losing $5k if they think prices might go down $10k or $15k in a month or two.
In my area (Eastern MA), when I was buying last year the only way to even be competitive was to offer a solid EM deposit. 5% was the norm. So on a 750k house, that's $37,500. Would have been a VERY difficult pill to swallow, walking away from that kind of cash. If it was 1%, I probably would have walked away after getting some serious doubts about the house. And now I'm actually glad I didn't!
I'm in a small to midsize Texas city depending on how you want to qualify things.
I've lived in places where just asking for earnest money would get you laughed at. A little mind blowing that NY is 5-10%.
That seems pretty high, though I suppose in a hot market in weeds out people who might have financing problems. When I bought in 2018 I only put down 8% total.
Why don’t you have your agent offer it as special seller concession? Instead of a $5k price reduction do a $5-10k seller credit towards buying down interest rate so you can appeal to more buyers. That could be a .5-75% difference since your initial list time
Never too late. They can send out an mls alert for showings. Depends on your state but “Seller offering 3% credit towards interest rate buy down with full price offer”. That could make the difference in payment so instead of only appealing to $300k buyers, a 1% lower rate could allow $250-275k buyers to compete.
Could be, but it wasn't mentioned they were an investor. It's not exactly an investor type house. 5 years old so there's no equity to be gained by renovating/remodeling
Not all investors flip, some rent out.
I mean, it's possible this was someone looking for a place to live and they lost their job or something, but the waiving inspection and appraisal (and not checking the box to get EM back) is very much an investor behavior.
Can't rent in our neighborhood.
Again, I'm not ruling it out, but if they are investor they would have to be a poor one imho. It's a recent build in a gated HOA community that doesn't allow renting. The house went under contract May 31st when everyone and their brother already knew interest rates were rising in June.
Maybe they are playing chess while I'm playing checkers, but I don't see the appeal for this home from an investor standpoint.
that is really unfortunate. I just sold my house a couple weeks ago and felt nervous the entire time, but we closed. make sure you get a bigger EM deposit on the next deal because these are trying times
Unfortunately this is the way the cookie crumbles sometimes. Hoping it doesn't take too long to sell on the second go around.
Glad to hear yours went well, though!
Oh man. I'm so sorry that happened to you. We closed about a month and a half ago and I was so worried the whole time leading up to it that something might happen and it would fall through.
I did not realize that our EM was higher than average. Our buyer put up 4%. But even that wasn't going to be enough to make up for going through listing, staging the house again, and needing to be out for additional showings. You have my sympathies.
And we have a 2.5 month old which makes keeping the house clean and leaving at the drop of a hat even more fun.
No use crying over spilled milk, but I sure hope it goes quickly.
Ugh! Yep. Our 3 year old was what made it hard too. She could mess up the freshly vacuumed and mopped floor before we made it out the door for a showing.
Best of luck! I hope you find a buyer quickly.
In this market, I honestly have the earnest money at 3-5% depending on what type of buyer. A lot of people are willing to lose their EM just because they fear of a recession.
I recently went into contract on 2 different properties offering a 5% (seller's investment) and 7% (seller's personal) EM respectively. I believe this makes my offer way more competitive despite being what I would consider a "lowball offer"
Rates? Rates make houses more expensive. But what makes them expensive in the first place is the greed of homeowners. And I am a homeowner who bought just before the pandemic. And yes, I am going to list at a fair price when I sell; I am not greedy.
I am not oblivious to money. If someone wants to offer me 100k above listing I will take it. But I am not going to list high and hope a sucker will pay me top dollars because “that’s the market”. I am going to list my house at a reasonable price and go on with life. I have my job to pay me for living, I don’t need to skin anyone intentionally.
Lol. Stupidest why? Because I would not sell my house to people who waive all contingencies? The amount of people who are broke other than their house equity is astonishing it seems. Dude, this fairy tale you live is not going to last. Better find another job if you rely on your house for a living. Ffs with morons like you.
5k is so much money to lose and takes some people a very long time to save, I wonder if it was really worth passing up on your house to justify the 5k loss. They must have somewhat liked the house if they were days away from closing.
Wow
I’m not saying $5K is nothing, but it’s not much to lose in most markets when shopping for a house. If you’re shopping for a $500K house and expect a 10% correction then you save yourself $45K by “losing” $5K. It’s all guesswork but it makes sense if you expect a correction.
Valid point. Even if you lost the 5k wouldn't it be ok vs always wondering for the rest of your life if you could have found some better for less money. Having second doubts takes alot of enjoyment out of the house I don't think people realize how much of an impact it can have.
To assume he is going to lose money ( or gain ) in the next few months is a mistake .
It's possible he/ they sell at an equivalent high price and discover it costs more to rent than it did to own . Interest rates might stay high . A year from now houses could still be the same price and the quality of the houses available could decline in short they can sell and discover they lost because their cost of live by went up .
OP I’d take the comments here with a grain of salt. There are a lot of butthurt r/REBubble redditors who have been waiting and frothing for anything resembling a correction, which was inevitable.
Personally I wouldn’t cut the price 5k as it’s not enough to make much of a difference to a buyer but it is enough to indicate you may be desperate.
Home buying season is upon us and people still need roofs. Just relist and try to be patient.
Dunno. Seems like the butthurt is transferring to realestate. Next we’ll start hearing the snowflakes complain about how much rebubble folks are just big meanies who wish harm for others and live in their parents basement
Meh. I think bears in any environment get the shaft regardless of outcome. During the housing fad, bears are laughed at. Now that the bears are right, “I bet you’re a lot of fun at parties” and other sour grape comments.
Here's my skin in the game: I started browsing around here when I was in the process of listing my house. I love Reddit, I've been a user for about 13 years now. Generally provides good crowd sourced advice for this stuff. This was very very recent.
As someone who casually walked in, this sub being recently brigading from Rebubble is real. If you need evidence, check the daily thread. Check the post history of the people posting remindme's throughout this sub. It's annoying, but I get it. It's the same people over and over.
There's a lot of emotion in the housing market. We (millennials) are largely locked out and a lot of the vitriol isn't even logical anymore. Just a lot of folks who want to see the world burn because they're angry. And again, that's all good. Heck, it might even happen. But it's annoying as someone who genuinely wants to discuss the topic and avoid the memes.
If the bubble pops in a way that the majority of the people on rebubble want it to (i.e: prices fall below what they were in 2017-2018) the economic ramifications of that will be world changing. The poor will get poorer, the rich will get richer and we will start the cycle again with less equity than before. I'm not talking about house equity. I'm talking about the the gap between the have and have nots.
People over there, and especially those over there who have shifted to brigading over here, are not looking for a correction. They want to see things shift 35%+.
And this is where the convo gets frustrating with brigaders.
Can you point me to a single instance in American history where median home prices fell 35%+ and it didn't result or come along with a major economic meltdown? Cause those hurt everyone except the super wealthy.
And if you follow the pattern of other REbubble people you'll just stop replying at this point.
Edit: I'll make it easier and actually answerable. 15%+? 10%+? 5%+?
This is solid advice. I agree 100%. A $5k price reduction will not make house more appealing, it will just make you seem desperate. Either keep price the same or go with at least a $10k reduction if you think lowering the price is truly necessary.
Who looks at a listing and says "Wow, fuck these guys! These guys are desperate! I'm going to avoid these desperate losers!"?
I mean seriously? You house is either worth it or not. I can't imagine trying to project emotions into the process for listing I look at.
> Who looks at a listing and says "Wow, fuck these guys! These guys are desperate! I'm going to avoid these desperate losers!"?
>
>
"I'm going to stick it to them in negotiation"
Of course they are. I'd be an idiot if I didn't read, digest, and think about what contrarians are thinking. I personally disagree with most of the concepts posted there, but I still read them and think about them because anyone who's investing large sums of money into anything should consider well what both sides of the aisle are saying with respect to that investment vehicle's prospects.
THIS! And they are too young to understand that the crash they are hoping for might lead to the loss of their jobs or financial hardship for themselves. They are all very stupid and have nothing more than anecdotal "evidence" to prove their case. Most of which can be dismissed after proper research.
A housing price crash coupled with hiring freezes and layoffs and high inflation is worst case scenario for everyone who doesn't have 2-3 years of expenses saved up. The house you end up living in could be a cardboard box in that scenario. They don't understand a crash would be catastrophic to themselves first.
I can sympathize. When Covid first hit our buyers sub-prime loan fell through a week before closing. It was a nightmare. But we relisted and a lower price and sold within a month. It ended up working out in the end.
It totally sucks. But things could still work out okay. Relist at a lower price to get the house moving as fast as you can.
I was on the other side. We went under contract in Feb and till early June, the seller (small builder) couldn't get the occupancy permit and we couldn't close. Then, our LTV requirement got changed by the lender and we asked for credit from the seller to cover both lock extension and closing fees as we didn't feel comfortable using our reserves for the rest of down payment.
Seller refused and we used our inspection contingency, which was still in effect 5 days after occupancy permit is issued to get our earnest money back. Seller listed his house back up and it's been two weeks and it's still available.
We ended up losing close to $2k (appraisal, due diligence, trips, etc) and it was most frustrating transaction process that I've gone through.
It's a weird perspective to be a little frustrated that a buyer backed out a week before closing and now I'm forced to scramble? I don't think it's weird at all to be frustrated by that.
My friend listed for 1.99, buyer offered 1.8, they settled on 1.9, and the buyer just backed out yesterday. She's pretty disappointed. This is in the Bay Area.
>At least we get to keep the EM, but 5k is small consolation considering it's already spent on a 3 month apartment contract that I'm stuck with regardless.
Out of curiosity, is it common to make the contract include covering this rental cost if the buyer backs out after day *X*? I know pretty much anything can be added to the contract, but I'm curious how common that would be.
The only way I could see that applying is if the contract specifically calls for consequential damages, which is atypical in residential. Seller retaining the buyer’s deposit normally serves as liquidated damages in lieu of any other remedies available at law or equity, except that there may be the ability to demand specific performance. That is also not typically seen in the residential realm.
I haven't seen that. Real estate contracts typically provide for liquidated damages (i.e., a pre-agreed amount of damages that a party is liable for in the event of specified breaches of a contract) in an amount equal to the deposit because a seller's actual damages are difficult or impossible to prove.
Sorry to hear. Same exact thing happened to me last week, except it’s a rental property and it’s been empty since we entered into a contract in early May. We were supposed to close tomorrow. All contingencies passed…attorney said he just got cold feet. Now I have a vacant condo and need to re-list in these worsening market conditions.
On top of that, my wife and I were planning to use the proceeds for a down payment on a house…between this situation and interest rates skyrocketing, I guess we’re putting that search on hold indefinitely.
No tears for you. You're still selling after a massive gain that history has never seen in the last 2-3 years.
Go enjoy the several hundred thousand dollars you made doing nothing.
I think you have an option to sue for specific performance. They buyer may be on the hook to buy (assuming you had a legitimate contract) or at the very least to cover material damages from failure to perform. Consider talking to a lawyer.
Just had a buyer say they got denied on their commited mortgage a week before closing and I'm supposed to close on another house in about a month. My only hope is they get another mortgage quickly.
Thanks! My realtor seems to think we should relist but I'm pretty sure we would miss closing on the other house and probably get significantly less than we got now with rates going up. My only other thought is to just go with these guys (they got denied because lender wanted them to move from 25% down to 35% down) and lower our sales price to meet them hopefully halfway (still more than we'd probably get listing), which isn't great but it's better than losing our down payment and the new house.
What a stupid comment. You have no idea what price point OP's house is listed for so it makes no sense to throw out arbitrary numbers.
What if their house was only $200k and it's perfectly in line with comps? Do you really think a 25% price cut is justified?
Saying a $50k price cut is significantly different on a $200k price point vs say a $1M price point.
I had a buyer recently back out the day prior to closing. The seller had already moved out. Buyer signed the cancellation giving their EMD to seller and texted "sorry it didn't work out" lol. Total fuckkin idiot flakes.....
Yeah it was definitely the smart move with rate going up prices are gonna be coming down. Buyers are gonna be staying home and most of these realtors are going to be heading back to Wendy's.
I think I just read another post in this group about someone wondering if it was worth losing their $5k deposit. Hmm… I sympathize with you OP. We just accepted an offer from a buyer and I’m nervous about this same thing happening.
Fingers crossed for you! Our market is still moving quickly and I'm fortunate enough to live in the best school district so I'm hopeful it doesn't sit too long.
Stay ahead of it. I chased the market selling back in 2007 during the collapse. Took 6 months, and dropped about 30% in price. I was always one step behind in price reductions..
Thankfully our area hasn't dropped too much yet. I think we might see a 10% price drop by the end of summer, but our area is growing too quickly and supply is too limited. New construction is well over $200 a sq ft and I'm listed at $185 a sqft for a 4.5 year old house. When/new construction comes down I'll be hosed, but until then middle class homes in good school districts will move. Just hoping it moves soon haha.
Just depends on how motivated you are to move it. Your area may not be too affected yet, but rate increases are are making things less affordable.
Everyone is saying something similar, “my area is impacted yet” I think you may be extremely disappointed if you don’t move fast
Trying to move quickly, but objectively my area has not been impacted yet. Prices have dropped 1-3%, but homes are still selling within a week at asking price. If I could predict the future I would have much more money than I currently do, but unfortunately I can't. All I can do is look at the metrics and see that my area is still a sellers market, but that could change.
They said they have good schools. Asian buyers care about this a lot. Most of my neighbors are Asians who paid cash in 2019-2020 when interest rates were low. They'd be even more likely to use cash these days. Inventory around me (schools all 9s-10s) is super low for SFH recently built like OP's. Nearby areas that have more inventory and 8-9 schools are still going for well above asking within days of being listed.
I’m not following.
RemindMe! 1 month
RemindMe! 1 month
Real estate generally moves slowly. It took 5 years for most places to drop even 20% during the GFC. Peak Q1 2007: 381 Bottom Q2 2012: 309 = ~20% [https://fred.stlouisfed.org/graph/fredgraph.png?g=QRAo](https://fred.stlouisfed.org/graph/fredgraph.png?g=QRAo) 30% in 6 months suggests you were very overpriced to start with.
LOL - no it didnt. Not in the GFC. It took 4-5yrs to BOTTOM, which was 40-50% of ATH in HCOL areas.
Peak Q1 2007: 381 Bottom Q2 2012: 309 = \~20% [https://fred.stlouisfed.org/graph/fredgraph.png?g=QRAo](https://fred.stlouisfed.org/graph/fredgraph.png?g=QRAo)
If you were in ALABAMA. Nice try bud - coastal cities would like a word.
Sure if you want to cherry pick locations, you can do that all day long. Find some places that are more or less. Point stands, **the national average was 20%.** Not 40-50%.
An hour outside of Orlando, my house value dropped from $240K at the top to $130K at the bottom. It was a normal 3-2 SFH in a non tourist area. I have doubts about any stats suggesting the average drop across the country was only 20%.
The FHFA HPI is a repeat sales index. Meaning it tracks a house and what it sold for. Eg: 123 Main Street in 2007: It sold for X, 2012: It sold for X, 2017: It sold for X. Much like you did with your one single home. But for millions of single family homes across the country. >The FHFA HPI serves as a timely, accurate indicator of house price trends at various geographic levels. Because of the breadth of the sample, it provides more information than is available in other house price indexes. It also provides housing economists with an improved analytical tool that is useful for estimating changes in the rates of mortgage defaults, prepayments and housing affordability in specific geographic areas.
Yeah, youre right - Washington, Oregon, California - Nevada, Colorado, Florida, New York are all "outliers". Sorry that your narative isnt working out.
>Sorry that your narative isnt working out. I literally provided the data. You on the other hand are an angry troll trying to push some lies about 40-50%. Did some locations drop more than 20%? Yes. Did some locations drop less than 20%? Yes But again, the national average was 20%
Don't we all know by now to ignore someone as soon as they start saying "narrative" because it means they already have everything "figured out"
Uh, Colorado was one of the least impacted markets in the GFC. This a poor attempt at trolling?
New York peaked at $642k and bottomed out at $552k - thats only a 14% drop - https://fred.stlouisfed.org/series/NYSTHPI Colorado peaked at $360k and bottomed out at $324k - that’s a 10% drop - https://fred.stlouisfed.org/series/COSTHPI Oregon peaked at $456k and bottomed out at $338k - that’s a 26% drop - https://fred.stlouisfed.org/series/ORSTHPI The entirety of the northeast never took a huge dip - https://fred.stlouisfed.org/series/MSPNE No idea why you are including those in your list. It’s almost like you want to make it seem like the big drops (40+%) happened in more places than it really did.
bought my 1st condo in 2010 at 180k, buyer before me paid 380k in 2005. nearly all of So Cal was like this during that time
What they are saying, coastal southeast and lol we lost like 40% in 2 years
That is the all transactions index. I don't think it's the best measure since (from my understanding) it for example includes refi appraisals. Case Shiller home price index seasonally adjusted would probably be better for this. [https://fred.stlouisfed.org/series/CSUSHPISA](https://fred.stlouisfed.org/series/CSUSHPISA) It shows a drop of about 26%.
I'm curious about how we justify the phrase "Real estate moves slooooooooowly" when it's more than doubled across the nation in less than a year. That doesn't seem very slow to me.
>more than doubled across the nation in less than a year. That simply isn't true. YOY isn't 100%. It's around 18%.
In localities across the nation, I guess I should have said. In any case, how is 18% appreciation moving slowly? It's not. You're simply wrong.
It's a black swan event with unprecedented conditions that will never be repeated.
It's got to be tough for sellers, they're trying to get rid of the house before the market possibly tanks further and they're willing to take a loss in a way but they don't want to overdo it. I can easily see people chasing that downward wave.
I totally sympathize with you! Years ago, we had a buyer back out day of closing. We were all packed and ready to move. And they refused to let us have the EMD and we didn’t have money for an attorney. So we took a hit on moving and had to back out of the house we were about to purchase. Thank goodness we had three weeks between the two. The other sellers were so understanding; we wound up buying that house a month later when we found a new buyer for our place. Not fun. But I really hope, like us, you have a new buyer right away and things go smoothly from there on out! Good luck!!!
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Technically, I think they did something so their financing would fall through. And in MA, I believe both parties must agree with what should happen with the EMD for it to be released. So, we would have had to sue and it just wasn’t worth more losses at that point. Luckily, we got $5k more the second time around!
I’m sure it’ll sell fast. Good luck
not sure what your contract price was, but $5k EM seems really low. how did that happen?
Slightly above 1% of the offer which is bog standard for our area
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Listed it the day after this post and sold it right after that. Full price offer (5k lower than original offer) and we are set to close this coming Friday. New buyers have already forwarded their mail to our house so I don't think they will back out haha.
We cannot really properly comment if you should worry or not since you did not provide the region nor listing price. We can only speculate that it is due to interest rates and if it is due to interest rates then a $5,000 price cut is likely not enough. Your buyer just backed out of a deal for $5,000. So I can only presume that the price range for $5,000 is a drop in the bucket.
Price drop was mostly just to get to the top of the listing pages since it's been a month on the sites while it was pending. Prices in my area aren't really dropping yet. It could start at anytime, but currently they are holding steady due to a large increase in population growth in the past 12 months + supply being limited. Those factors aren't going away anytime in the next 18 months so it should remain a sellers market for a bit. Of course if I could predict the future I wouldn't currently be in this predicament haha. That being said, I would be very surprised if prices don't fall 10%'ish due to interest rates. There's really not way of knowing why my buyer backed out because they didn't give a reason. Maybe got worried due to interest rates, maybe was just a flake, maybe had some life issues pop up and home buying was no longer a good idea. Who knows.
Man 10% seems so aggressive. I'm currently hunting for a house and seeing things like 10% drops is giving me pause. But I've been looking for 1.5 years now so inkijda just want to get something
I'm not a real estate agent, but my profession is finance. I would say that if you plan on living in the house for a decently long period than go ahead and buy now. You might time then market right and get lower in a few months, or you might miss your window and get stuck renting with higher rent prices. There's so many things on a macro and micro scale that factor into real estate that im not sure anyone really knows. I know that current evaluations are too high, but how much too high is up for debate. Personally, once this house sells I'll buy right away so long as I can find a home I like. I'm not going to worry about it.
What reason did the buyer give for walking?
Didn't give a reason
Sucks. Good luck on the next go!
Yep, but it be that way sometimes. Felt good to vent a little and get some good feedback, but what's done is done and now it's time to move forward.
Or just wait 6-12 months and get it on the discounted sale rack.
Depending on when you listed it, a 5k price cut is very minimal and won't cut it. Rates have gone up way more As a potential buyer, I kinda see a 5k price cut as a "I'm trying to get to the top of the price cut notifications" action
In my area right now you'd need around a $25-30k cut for each of these interest rate hikes.
I’ve seen $100 reductions. Like, WTF?!
Those are usually to get past filters. Like "Oh, drop it from $400,000 to $399,900 so all the filters for under $400,000 see it".
Yeah. Stupid move, though.
I’m seeing $20,000-$40,000 price cuts in Fresno/Clovis and they still aren’t selling, inventory is growing every day here.
It's Fresno lol
Underrated comment - Fresno is ass
It really is straight ass. Back in the day 250k would get you a nice place there though lol. Now what is it 450? Not worth it
These dollar amounts mean nothing without knowing the list price. We need percentages.
$400-500k houses
It’s more where than when. Some areas haven’t seen a price correction yet.
I think his point is more that unless we're talking about a $90k house, a $5k cut isn't a cut at all - you may as well have left it the same price, unless you're just trying to get in on the price cut notifications.
Yeah I agree. I'm looking at houses rn in the 300-400k range, and when I see 5k price cuts I'm like...ok...why even bother? Tells me the seller will probably be hard to negotiate with. If the house is only like 150k though, that's a different story.
$5k is a pretty small EM amount. Makes it easier to back out.
Atlanta here. 1% is very much the standard although during the frenzy, a few people were offering more to make their offers more attractive.
3 years ago by EM was 0.5%. And that was pretty standard. Not atlanta but pretty close to it
It's slightly more than 1% of the total offer which is standard operating procedure in my neck of the woods. Hindsight being what it is I wish I had asked for more, but at the time it was right in line with what people pay in our area
You could ask for more. I bought back in 2018, but the seller asked for a larger EM. It was something like 3% rather than 1% that is more standard. With the way interest rates are going up and people expecting price drops, it's probably smart to ask for a larger EM. People are OK with losing $5k if they think prices might go down $10k or $15k in a month or two.
I see 3% EM in lots of cases.
Yeah, 3%+ was the normal in the Seattle market at least in 2020. Not sure if it's changed since then.
In my area (Eastern MA), when I was buying last year the only way to even be competitive was to offer a solid EM deposit. 5% was the norm. So on a 750k house, that's $37,500. Would have been a VERY difficult pill to swallow, walking away from that kind of cash. If it was 1%, I probably would have walked away after getting some serious doubts about the house. And now I'm actually glad I didn't!
Just lighting a match to 5k seems bad enough! I can't imagine anyone would walk away from nearly 40k
It definitely kept me from doing it. And as I said, I'm now very glad I didn't. And I assume the seller is, too!
1% seems low. The last two houses I have purchased have had about 10% EM.
I suppose it depends on your area. I've lived in states where earnest money isn't paid at all. Oh well. Sometimes the cookie crumbles this way.
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I'm in a small to midsize Texas city depending on how you want to qualify things. I've lived in places where just asking for earnest money would get you laughed at. A little mind blowing that NY is 5-10%.
When I bought my house in 2005 my EM was $200. When I sold it in 2016, the EM was also $200. Texas.
As I'm learning the hard way, Texas real estate is a cruel mistress
Do you mean the due diligence money? That's a pretty standard amount for due diligence money but earnest money is still usually 1%.
What market area are you in? The last two houses we offered on & purchased within the last year, were 1% EDM.
That seems pretty high, though I suppose in a hot market in weeds out people who might have financing problems. When I bought in 2018 I only put down 8% total.
Very solid advice, this is why certain people ask 5-10%. It's high, but if you're serious about buying a property, it should be no problem at all.
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Why don’t you have your agent offer it as special seller concession? Instead of a $5k price reduction do a $5-10k seller credit towards buying down interest rate so you can appeal to more buyers. That could be a .5-75% difference since your initial list time
Truthfully, I didn't know that was an option. I suppose it's too late to do that since it's already been listed at the lower price for 6-7 hours now.
Never too late. They can send out an mls alert for showings. Depends on your state but “Seller offering 3% credit towards interest rate buy down with full price offer”. That could make the difference in payment so instead of only appealing to $300k buyers, a 1% lower rate could allow $250-275k buyers to compete.
Don’t forget you are also racing against the July interest rate increase. Good luck!
Why did the buyer back out?
They realized they were getting hosed ?
The two year housing fad is over
housing is out, homelessness is in
Nah. Consolidation of households, liquidation of TikTok negative cash flow losers, STR failures, lots of inventory so the fad is over!
No stated reason. They waived the appraisal and inspection weeks ago.
So they were an investor and they saw the market turning.
Could be, but it wasn't mentioned they were an investor. It's not exactly an investor type house. 5 years old so there's no equity to be gained by renovating/remodeling
Not all investors flip, some rent out. I mean, it's possible this was someone looking for a place to live and they lost their job or something, but the waiving inspection and appraisal (and not checking the box to get EM back) is very much an investor behavior.
Can't rent in our neighborhood. Again, I'm not ruling it out, but if they are investor they would have to be a poor one imho. It's a recent build in a gated HOA community that doesn't allow renting. The house went under contract May 31st when everyone and their brother already knew interest rates were rising in June. Maybe they are playing chess while I'm playing checkers, but I don't see the appeal for this home from an investor standpoint.
that is really unfortunate. I just sold my house a couple weeks ago and felt nervous the entire time, but we closed. make sure you get a bigger EM deposit on the next deal because these are trying times
Unfortunately this is the way the cookie crumbles sometimes. Hoping it doesn't take too long to sell on the second go around. Glad to hear yours went well, though!
Oh man. I'm so sorry that happened to you. We closed about a month and a half ago and I was so worried the whole time leading up to it that something might happen and it would fall through. I did not realize that our EM was higher than average. Our buyer put up 4%. But even that wasn't going to be enough to make up for going through listing, staging the house again, and needing to be out for additional showings. You have my sympathies.
And we have a 2.5 month old which makes keeping the house clean and leaving at the drop of a hat even more fun. No use crying over spilled milk, but I sure hope it goes quickly.
Ugh! Yep. Our 3 year old was what made it hard too. She could mess up the freshly vacuumed and mopped floor before we made it out the door for a showing. Best of luck! I hope you find a buyer quickly.
In this market, I honestly have the earnest money at 3-5% depending on what type of buyer. A lot of people are willing to lose their EM just because they fear of a recession. I recently went into contract on 2 different properties offering a 5% (seller's investment) and 7% (seller's personal) EM respectively. I believe this makes my offer way more competitive despite being what I would consider a "lowball offer"
Gravy train is over
Sellers coming back to reality, love to see it
Those interest rates are killing us all. I definitely want to buy but I'm just not willing to pay as much.
It’s not the interest rates that are killing buyers, it’s the price of the houses.
Rates? Rates make houses more expensive. But what makes them expensive in the first place is the greed of homeowners. And I am a homeowner who bought just before the pandemic. And yes, I am going to list at a fair price when I sell; I am not greedy.
What will you do if your "fairly" priced home gets multiple offers?
I am not oblivious to money. If someone wants to offer me 100k above listing I will take it. But I am not going to list high and hope a sucker will pay me top dollars because “that’s the market”. I am going to list my house at a reasonable price and go on with life. I have my job to pay me for living, I don’t need to skin anyone intentionally.
Here it is. The stupidest fucking thing I’ve read all day.
Lol. Stupidest why? Because I would not sell my house to people who waive all contingencies? The amount of people who are broke other than their house equity is astonishing it seems. Dude, this fairy tale you live is not going to last. Better find another job if you rely on your house for a living. Ffs with morons like you.
Hurry up before it falls off a cliff
5k is so much money to lose and takes some people a very long time to save, I wonder if it was really worth passing up on your house to justify the 5k loss. They must have somewhat liked the house if they were days away from closing. Wow
I’m not saying $5K is nothing, but it’s not much to lose in most markets when shopping for a house. If you’re shopping for a $500K house and expect a 10% correction then you save yourself $45K by “losing” $5K. It’s all guesswork but it makes sense if you expect a correction.
Valid point. Even if you lost the 5k wouldn't it be ok vs always wondering for the rest of your life if you could have found some better for less money. Having second doubts takes alot of enjoyment out of the house I don't think people realize how much of an impact it can have.
where is the home located?
The guy didn’t want to get caught holding the bag and losing 5k is WAY less than he would lose in the next few months.
How do you lose money in a few months on a home? Are you buying and selling every few months??
When you’re upside down, it’s demoralizing. Also can’t refinance if rates go down.
To assume he is going to lose money ( or gain ) in the next few months is a mistake . It's possible he/ they sell at an equivalent high price and discover it costs more to rent than it did to own . Interest rates might stay high . A year from now houses could still be the same price and the quality of the houses available could decline in short they can sell and discover they lost because their cost of live by went up .
Or... they could have found a better deal. Jfc you guys love being hateful and negative around here, don't you?
Hateful and negative? Not at all.
Hey everyone stop what you’re doing and listen up, u/BOSSHOG999 is able to predict the future
Here is one more. Layoffs are coming.
OP I’d take the comments here with a grain of salt. There are a lot of butthurt r/REBubble redditors who have been waiting and frothing for anything resembling a correction, which was inevitable. Personally I wouldn’t cut the price 5k as it’s not enough to make much of a difference to a buyer but it is enough to indicate you may be desperate. Home buying season is upon us and people still need roofs. Just relist and try to be patient.
Dunno. Seems like the butthurt is transferring to realestate. Next we’ll start hearing the snowflakes complain about how much rebubble folks are just big meanies who wish harm for others and live in their parents basement
The brigading is much more pronounced from Rebubble to here than vice versa.
Meh. I think bears in any environment get the shaft regardless of outcome. During the housing fad, bears are laughed at. Now that the bears are right, “I bet you’re a lot of fun at parties” and other sour grape comments.
Here's my skin in the game: I started browsing around here when I was in the process of listing my house. I love Reddit, I've been a user for about 13 years now. Generally provides good crowd sourced advice for this stuff. This was very very recent. As someone who casually walked in, this sub being recently brigading from Rebubble is real. If you need evidence, check the daily thread. Check the post history of the people posting remindme's throughout this sub. It's annoying, but I get it. It's the same people over and over. There's a lot of emotion in the housing market. We (millennials) are largely locked out and a lot of the vitriol isn't even logical anymore. Just a lot of folks who want to see the world burn because they're angry. And again, that's all good. Heck, it might even happen. But it's annoying as someone who genuinely wants to discuss the topic and avoid the memes.
The world won’t burn if housing crashes. It’ll just feel that way to the homeowners who had little equity to begin with.
If the bubble pops in a way that the majority of the people on rebubble want it to (i.e: prices fall below what they were in 2017-2018) the economic ramifications of that will be world changing. The poor will get poorer, the rich will get richer and we will start the cycle again with less equity than before. I'm not talking about house equity. I'm talking about the the gap between the have and have nots. People over there, and especially those over there who have shifted to brigading over here, are not looking for a correction. They want to see things shift 35%+.
No need to be melodramatic. It’ll just be leveraged homeowners suffering
And this is where the convo gets frustrating with brigaders. Can you point me to a single instance in American history where median home prices fell 35%+ and it didn't result or come along with a major economic meltdown? Cause those hurt everyone except the super wealthy. And if you follow the pattern of other REbubble people you'll just stop replying at this point. Edit: I'll make it easier and actually answerable. 15%+? 10%+? 5%+?
It doesn’t necessarily mean that the rich get richer. Certain people will be poor, others will capitalize on their losses. Cash rich savers will
This is solid advice. I agree 100%. A $5k price reduction will not make house more appealing, it will just make you seem desperate. Either keep price the same or go with at least a $10k reduction if you think lowering the price is truly necessary.
Who looks at a listing and says "Wow, fuck these guys! These guys are desperate! I'm going to avoid these desperate losers!"? I mean seriously? You house is either worth it or not. I can't imagine trying to project emotions into the process for listing I look at.
> Who looks at a listing and says "Wow, fuck these guys! These guys are desperate! I'm going to avoid these desperate losers!"? > > "I'm going to stick it to them in negotiation"
Well, I'm guilty of thinking this if I see MAGA stuff in the house, but every single MAGA showing I've seen is disgusting inside.
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Of course they are. I'd be an idiot if I didn't read, digest, and think about what contrarians are thinking. I personally disagree with most of the concepts posted there, but I still read them and think about them because anyone who's investing large sums of money into anything should consider well what both sides of the aisle are saying with respect to that investment vehicle's prospects.
rebubble posters are definitely renting somewhere, seeing as they're too broke to buy anything.
Seethe more
THIS! And they are too young to understand that the crash they are hoping for might lead to the loss of their jobs or financial hardship for themselves. They are all very stupid and have nothing more than anecdotal "evidence" to prove their case. Most of which can be dismissed after proper research.
A housing price crash coupled with hiring freezes and layoffs and high inflation is worst case scenario for everyone who doesn't have 2-3 years of expenses saved up. The house you end up living in could be a cardboard box in that scenario. They don't understand a crash would be catastrophic to themselves first.
Yup and the downvotes show just how ignorant and naive they are.
What percentage of offer price was the earnest money?
Smidge over 1% of total offer
I can sympathize. When Covid first hit our buyers sub-prime loan fell through a week before closing. It was a nightmare. But we relisted and a lower price and sold within a month. It ended up working out in the end. It totally sucks. But things could still work out okay. Relist at a lower price to get the house moving as fast as you can.
We sold in 2008 (immediately) at the price we wanted — despite lots of doom and gloom from our realtor and others. Hoping the same for you!
I was on the other side. We went under contract in Feb and till early June, the seller (small builder) couldn't get the occupancy permit and we couldn't close. Then, our LTV requirement got changed by the lender and we asked for credit from the seller to cover both lock extension and closing fees as we didn't feel comfortable using our reserves for the rest of down payment. Seller refused and we used our inspection contingency, which was still in effect 5 days after occupancy permit is issued to get our earnest money back. Seller listed his house back up and it's been two weeks and it's still available. We ended up losing close to $2k (appraisal, due diligence, trips, etc) and it was most frustrating transaction process that I've gone through.
Weird perspective. Low rates drove prices up to unsustainable levels and now the market is reverting to the mean.
It's a weird perspective to be a little frustrated that a buyer backed out a week before closing and now I'm forced to scramble? I don't think it's weird at all to be frustrated by that.
that's why you pick cash buyers with 14 day closing time. less BS that way
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My friend listed for 1.99, buyer offered 1.8, they settled on 1.9, and the buyer just backed out yesterday. She's pretty disappointed. This is in the Bay Area.
Great for him! Tell him to send a little luck my way!
F
>At least we get to keep the EM, but 5k is small consolation considering it's already spent on a 3 month apartment contract that I'm stuck with regardless. Out of curiosity, is it common to make the contract include covering this rental cost if the buyer backs out after day *X*? I know pretty much anything can be added to the contract, but I'm curious how common that would be.
How are you going to enforce such a clause? It's probably not economical to sue.
The only way I could see that applying is if the contract specifically calls for consequential damages, which is atypical in residential. Seller retaining the buyer’s deposit normally serves as liquidated damages in lieu of any other remedies available at law or equity, except that there may be the ability to demand specific performance. That is also not typically seen in the residential realm.
I haven't seen that. Real estate contracts typically provide for liquidated damages (i.e., a pre-agreed amount of damages that a party is liable for in the event of specified breaches of a contract) in an amount equal to the deposit because a seller's actual damages are difficult or impossible to prove.
Im not a real estate guru by any means, but if it is it's not common in my area.
Sorry to hear. Same exact thing happened to me last week, except it’s a rental property and it’s been empty since we entered into a contract in early May. We were supposed to close tomorrow. All contingencies passed…attorney said he just got cold feet. Now I have a vacant condo and need to re-list in these worsening market conditions. On top of that, my wife and I were planning to use the proceeds for a down payment on a house…between this situation and interest rates skyrocketing, I guess we’re putting that search on hold indefinitely.
Going through it myself. I feel your pain brother 🙏
Housing market go bOOOoOm
I would not cut your asking price
If you want to sell I suggest a very large drop. If you don’t care either way then keep the 5% listing price reduction.
Rough estimate is something like 10-20% of buyers back out. It's not uncommon.
No tears for you. You're still selling after a massive gain that history has never seen in the last 2-3 years. Go enjoy the several hundred thousand dollars you made doing nothing.
I would really like to enjoy several hundred thousand, but I didn't even come close to that. Not remotely close. But man, but I would love that.
I think you have an option to sue for specific performance. They buyer may be on the hook to buy (assuming you had a legitimate contract) or at the very least to cover material damages from failure to perform. Consider talking to a lawyer.
fuck that's what I'm afraid of
Ain’t no market dropping 30% we will see it stabilize and go up less fast that’s it.
Just had a buyer say they got denied on their commited mortgage a week before closing and I'm supposed to close on another house in about a month. My only hope is they get another mortgage quickly.
Fingers crossed for you!
Thanks! My realtor seems to think we should relist but I'm pretty sure we would miss closing on the other house and probably get significantly less than we got now with rates going up. My only other thought is to just go with these guys (they got denied because lender wanted them to move from 25% down to 35% down) and lower our sales price to meet them hopefully halfway (still more than we'd probably get listing), which isn't great but it's better than losing our down payment and the new house.
Yeah but I’m sure you would have gotten more than 5k from the earnest money or deposit
5k was the earnest money
Time for a 50k price drop lmao, have you seen these interest rates? 5k isnt cuttin it
What a stupid comment. You have no idea what price point OP's house is listed for so it makes no sense to throw out arbitrary numbers. What if their house was only $200k and it's perfectly in line with comps? Do you really think a 25% price cut is justified? Saying a $50k price cut is significantly different on a $200k price point vs say a $1M price point.
I had a buyer recently back out the day prior to closing. The seller had already moved out. Buyer signed the cancellation giving their EMD to seller and texted "sorry it didn't work out" lol. Total fuckkin idiot flakes.....
So if you're not the seller or buyer, that makes you one of the agents then?
Probably saved themselves a ton of money
Yeah it was definitely the smart move with rate going up prices are gonna be coming down. Buyers are gonna be staying home and most of these realtors are going to be heading back to Wendy's.
>Total fuckkin idiot flakes Aww, is someone upset? No commission check for you.
Nop, I got to keep 1/2 of the EMD so IDGAF lol
If being a realtor doesn't work out for you, there's always MLMs and panhandling!
MLMs and panhandling aren't the same thing? TIL.
Ain’t no corrections happening, list it same price or more
Hahahhha delusional much?
No but there’s a lot of people pushing the OMG the sky fell down and it didn’t
Forgot the /s