Monday, May 20, 2013

Being sensible is such a bummer

It was certainly an interesting Sunday.

As the regular readers of my blog know, I've been looking for a house.  It's been quite an adventure.  There is one that I'm actually seriously considering though the jury is still out (I want to take a second look at it).  But one popped up that was just a little more than the one I'm seriously considering (which is dirt cheap), far bigger, with an attached garage and a fireplace.  Huge kitchen. I was intrigued.

There was an open house on Saturday and Sunday, with a "best bidder" sale on Sunday; the listed price was the starting bid.  Huh, I thought.  Trying to start up a bidding war? Is this something where they'll try to cut someone's real estate agent out of the process? (Agents work pretty hard for you so you don't want to do that!)  It's a way to sell your house quickly if you're motivated; it is probably a good way to get more for it in a shorter period of time than letting it sit on the market will do.  It's also a great way to jack up the price of the house--bidding on something will often impel people to go higher than they would in the hopes of "winning"--and sometimes will bid beyond the value of the object. (One well-known example is the experiment where a researcher had a roomful of people bid on a $20 bill. The "winner" got it for $22 or something like that.)

My agent told me to check it out, regardless.  I went, and was honestly enamored of the house.  It was a split level, and the kitchen was well-laid out (most split levels have little cabinet space in the kitchens for pots and pans, and they tend to be small.  I'm okay with a small kitchen but I want space for my pots, pans, slow cookers, baking dishes, etc. That's the one area where I have a fair amount of stuff and I use it all.)  It had a breakfast bar (with lots of cabinet space).  Decent sized dining area.  Hardwoods (except in the living room and the hallway, which I don't understand--why not make that hardwood as well?).  A fireplace. A good sized deck. Newer windows.  Lots of light.  Good-sized bedrooms and the master bedroom had a slider leading to a balcony.  Part of the basement was finished with a little guest suite--a sleeping area and a living room area with a bathroom.  A garage (not a necessity for me--I'm quite realistic about my price range--but oh, a lovely perk). Huge, fenced-in sunny yard aching for garden beds.  Views of a cranberry bogs.

The house was out of my league.

There were a few things I wasn't enamored with but that I could live with.  The cabinets were those awful contractor special things (white press board with "wood" lining the bottom, ugly) and the counter was a blah shade of gray.  You know what? It was still in good condition and it's not a deal-breaker.  The closet doors were all different (in one room, there were no doors, just a curtain).  There was a huge pine tree near the master balcony that made me nervous (those things snap in a good storm) and I knew if I got the house by some miracle I'd have to take that thing down for my own piece of mind.  But these were small details.

That was it.  Had the short sale I looked at a couple of weeks ago been like this house, I would have made an offer.

So what the heck. I put in a bid.

How it works is that they call you at 5:00 or so that evening (in order of who wrote down bids), tell you how many people are bidding, what the bid is up to, and ask you if you would like to increase the bid or bow out.  If you end up with the highest bid and if the buyer accepts it (which they might not), they will let you know but will contact your real estate agent (if you're working with one) to get the official offer and the details.  If you have the winning bid, you can bow out since it's not an official offer, and they'll go to the next lowest bid.

I did not think I would get the house (spoiler: I didn't).  I was nervous that I'd get caught up in the bidding process and end up bidding more than I should. There were five bidders when we started. By round two, there were four.  By round four, there were three.  By round five, there were two.  I was one of the two.

Color me shocked.  So for a minute I thought, Oh my god I might actually get this house! 

But alas, I did not.  Had I been further along in my lease or had more money to put down, I likely would have gotten the house--or I would have been willing to bid more.  I could have gone to the top of my price range (and yes, the house was worth it).  But I am in a lease and I don't know if I could find someone to take it over for me on such short notice; so it would be conceivable that I'd have to carry rent and a mortgage payment.  Depending on the mortgage payment it would be doable, but the higher the price is,  the less able I am to do it. The lower the price (and/or the further along I am in my lease), the higher I can go. I call it pain in the derriere math.

I did go $1,000 over the amount I swore would be my cutoff point.  I figured what the heck, maybe the other bidder would bow out and that amount wouldn't be onerous.  It would be well worth it.  But they increased it and I couldn't go on.  I mean, I could have tried.  I suppose I could have upped it (I only upped the bids by the minimum amount, which was $1,000).  But I knew that it would be a strain financially.

So congratulations to the best bidders.  They really did get a good deal on that house (it was worth more, for sure).  I'm disappointed but I don't regret bowing out.  Still, being sensible can be such a bummer.

7 comments:

  1. Interesting way to sell a house. The house-hunting process is fun to me. But the negotiating a price and inspection is a huge pain. I am glad that our family is "put". We'll only move if it means we'll be going south many hundred miles!

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  2. I would just look as this entire process as a learning experience. Keep looking, I have the feeling that you will find exactly what you are looking for-soon!

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  3. I have never heard of a house being sold that way! I would also be freaked out by the thought of getting caught up in a bidding war!

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  4. Be careful of the winner's curse! 1K over your top price is too much (otherwise your top price is wrong).

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  5. I agree, being sensible at times is a bummer but there's always a reason things don't go the way we'd like or planned.. Who knows, maybe somewhere down the road you'll understand why you weren't meant to win the bid.. You may find something you love even more at a better price :)

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  6. Being sensible when buying a house will always stand you in good stead. Keep your top price lower than you know you can really afford. Peace of mine is much better than the house of your dreams that you cannot pay for. A house that is lower than you can afford can often be made more suitable just by buying the lesser house and adding things--shelves, pantries, fences. If you are going to plant a garden, have the soil tested and make the sale contingent on soil without contaminants. The sellers might lower the price is soil tests or house inspection shows a problem.

    Go to Root Simple on my blog and see how he had his soil tested and where he recommends.

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  7. I've also never heard of selling a house like that! Congratulations on being sensible, even though it's hard sometimes :)

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