After over a year of saving for our down payment, we were so happy to have over 20%. Remember when 20% down would be the norm?
Yeah, it's not like that anymore. You actually get even better interest rates when you have a 25% down payment. No one told us that until we spoke to the third lender we worked with. So here we are trying to save 25% down and also have cash on hand for closing costs (fees and all that fun stuff), repairs, and some left for our emergency fund. We watch the market like hawks and have MLS listings sent to us each day they are posted, and we check on it throughout the day.
Condos are being listed at great prices due to short sales and REOs, yet the past 3 properties we have wanted to submit an offer on have all been scooped up by investors within mere DAYS! Less than a week! I'm talking about 2 days here! The most recent place we wanted to see was only on the market for 2 days when the owner decided to stop showing people after receiving multiple cash offers above list price from investors. Our agent called her agent on the day it was listed, and we had to give 24 hours notice to view the property. In a matter of a few hours, we got a call back and we weren't able to see it anymore because of overwhelming cash offers. They wouldn't even allow us to submit an offer.
This is where it gets sticky. How are we supposed to submit an offer if we can't even view the property? We don't have the funds or the patience to do repairs. In the past, we have passed on a lot of properties after viewing it because of mold damage, air duct repairs, huge cracks in walls, structural problems, etc. I'm not talking about minor repairs like replacing the carpet or a dirty kitchen, a lot of these places that are being sold are in terrible condition and the repairs could cost up to thousands of dollars. Going under the foundation, fixing the structure, or finding the root of a water problem from another person's condo is not fun and not cheap. There is no way we want to submit an offer without viewing the place. That's what makes this process so difficult. The number one thing that is important to us is location, and the locations we want are unfortunately ones that investors are looking at too.
The rich are getting richer
The good news is we are just saving more and increasing our down payment to get a lower interest rate. The bad news is that we won't ever know when we'll get a property. Will it even be a good deal? It's a mystery. I know everyone says that you must be patient, but buying a property in these days is not as easy as a few years ago (just talking about condos, not sure about houses), especially in a city like San Diego.
It frustrates me because the rich are getting richer and people like us who are just starting our lives, are left with the crappy condos in the bad areas that need a lot of work. This also means that people our age will have to be renting longer because the opportunity to buy an affordable property is diminishing and lenders are wanting more money as a down payment (for a conventional loan not FHA or VA or anything).
I didn't mean to bash on the rich people because hey, they're living the life I want to live. If I had the money to drop 200 grand when I felt like it, I guess I would too.
Is anyone else in the condo or home buying process right now? How is it going for you?