We’ve officially crossed over into a realm of total insanity now. The vast majority of offers that are being accepted have no contingencies of any kind, almost every property is going over asking…often by a bunch and the old rules are being scrapped on a weekly basis. Some of which I wish were not being scrapped too! Here’s some recent examples:
1. A townhouse in Foster City that had no lockbox, no sign an really no marketing except the MLS listing and no open house gets 6 offers on day 4 of the listing. All over asking, the winner with no contingencies.
2. A foreclosure listing in San Francisco gets 27 offers…and 14 of them are all cash.
3. A house in Foster City that’s had no inspections, get’s multiple offers and the listing agent includes a form with the disclosures for buyers to sign prior to presenting their offer that suggests the buyer waives their right to do inspections.
4. The short sale I mentioned last week that suggested the buyer put their 3% deposit in escrow within 48 hours and do their inspections within 10 days…even if it could take the bank 4 or 5 months to approve the short sale.
5. A house in Belmont that looked at offers before any disclosures were given to buyers and also without inspections.
There’s some zaniness going on right now…that’s for sure. I think it’s really imprtant right now to exercise some restraint even though the pressure is clearly on to get a place. Not inspecting a house is crazy and strikes me as a huge liability.
I personally think writing an offer without a loan or appraisal contingency is a competitive advantage for a buyer who’s qualified enough to do it, has enough extra cash to make it work or has a large downpayment. It would certainly go a long way toward winning the home…but its a very risky thing if you don’t have more than 20% saved and certainly it would be a mistake if you are an FHA buyer. I guess the point is…do what makes sense.