Boston Bidding Wars

I shared our house search story earlier, but one thing I largely left out, was just how CRAZY the housing market in Boston is right now.  We started our house search last November, and only found our house recently.  I'm not sure we ever thought it was going to take so long, but the current market in Boston is nothing short of insane right now!

What does that mean exactly?  Something like this: Houses come on the market on a Thursday or Friday, the open house is that weekend, and there is an accepted offer by Monday.  Open houses become crowded and overrun, with hundreds of desperate people running through.  Couples sizing each other up and trying to play head games ("Oh so what did YOU think of the house? The X didn't bother you?")  Realtors helping couples to fill out offers on the hoods of their cars AT the open house.  And worst of all: Everyone is waiving home inspections!

I've heard a lot of stories about this lately, from both sides of the issue, but they all seem to follow the same pattern.  Family falls in love with a house, puts in an offer, and loses out to a "stronger offer."  Lather, rinse and repeat.  Soon enough, the family realizes that every single time they lose a house, it's to someone who has agreed to waive the home inspection.  After looking for houses for weeks, months, and sometimes years, this family gets desperate.  They just want a home!  So they start waiving home inspections too, so they can be more competitive.  Soon they win a bidding war!  And that other family they beat out?  They're starting to wonder if they should waive home inspections on their next bid.

And that's how the cycle goes.  Sellers are moving inventory quickly, buyers are desperate, and no one is inspecting these old and possibly problematic homes.  Even though Tom and I both feel strongly against waiving home inspections, and we've been told by multiple people it's not a smart thing to do, we understand why people are.  The market is that crazy right now, and people are panicked trying to find their home.  It makes me really wish that home inspections were required by law.  They're not that expensive (at least compared to the house you're buying) and it would cut back on some of the current mania out there.

My advice?  First, hire the VERY BEST Realtor you can.  What does this have to do with home inspections?  Well first, they'll never tell you to waive one.  Second, if you have someone who is really good at their job, and who is on the same page as you, it will pay off.  I've seen our Realtor win bids that were not the strongest, or highest priced, just because he is THAT good.  Also we like him so much, so what could normally be a very stressful and not fun process, actually turned into something quite enjoyable. 

My other piece of advice if you're feeling desperate, and looking for ways to compete against buyers who are waiving home inspections: You can add a clause to your offer that says while you won't waive your home inspection, you will only renegotiate prices if problems are found that exceed $X in aggregate.  This way you're still getting your home inspection, but not scaring the seller off too much by the threat of small issue popping up and driving down the sale price. However, if something major comes up (structural damage, a bad roof, etc) you're still protected.  Of course this only works well if you have enough savings to cover small problems out of pocket...

In general we tried to avoid the mania as much as possible.  We worked hard to get into houses for private showings so we could avoid the open house craziness.  We made sure that our financials were strong and in order so we were prepared to make a strong offer at any time, and offer a short closing window.  And we did not waive our home inspection even though we were looking at a house that was less than 3 years old.  It wasn't worth it to us.  I know it's easy to say that looking back after our offer was accepted, but we had a deal early on that no house was worth waiving a home inspection.