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The area I will be moving into in a few weeks to look for a new home is super hot right now. Everything that comes up is gone within a days time. I want a new house, but it does not matter with my wife. I am afraid of getting a money pit by buying something used. Most houses are being sold over asking and appraisal prices. I would not be scared of a used house if the seller would agree to cancel the contract and refund my deposit if the house failed inspection and/or appraisal. Is this a reasonable request?
What is typical in that area where you hope to buy?
In a super hot market, sellers get enough offers that are nearly certain to close, how would you make your offer competitive?
I would not be scared of a used house if the seller would agree to cancel the contract and refund my deposit if the house failed inspection and/or appraisal. Is this a reasonable request?
Not only is it reasonable, but it is often a standard provision of a real estate purchase contract.
Here's an old sample contract from the Birmingham Association of Realtors. It has the option of an inspection contingency or As Is. See Part 12.
The area I will be moving into in a few weeks to look for a new home is super hot right now. Everything that comes up is gone within a days time. I want a new house, but it does not matter with my wife. I am afraid of getting a money pit by buying something used. Most houses are being sold over asking and appraisal prices. I would not be scared of a used house if the seller would agree to cancel the contract and refund my deposit if the house failed inspection and/or appraisal. Is this a reasonable request?
As noted above, the usual contracts have contingencies or other provisions for inspections.
It appears that some markets are so hot that some buyers are waiving these contingencies. Now that is scary.
Start by contacting an agent to explain the processes in your state and the current situation.
By the way, you can end up with a money pit if you buy a house, new or used.
The area I will be moving into in a few weeks to look for a new home is super hot right now. Everything that comes up is gone within a days time. I want a new house, but it does not matter with my wife. I am afraid of getting a money pit by buying something used. Most houses are being sold over asking and appraisal prices. I would not be scared of a used house if the seller would agree to cancel the contract and refund my deposit if the house failed inspection and/or appraisal. Is this a reasonable request?
First of all, homes don't fail home inspections. The home inspector notes issues and the buyer decides if they are okay with those issues or not. If not, they can try and negotiate repairs, price drops, etc.
Second, in hot markets, some buyers will waive home inspections and in my market appraisal gap coverage is standard for winning bids that aren't cash.
You don't sound like you are quite ready for buying in a hot market, but depending on what is happening in contracts in the area you want to buy, you will have to decide what you give on.
We will definitely be buying in that market. When we decided to move there in September to be closer to family it was not that bad. Our current house is sold, our stuff has been shipped there and we will head up there in ten days right after closing.
where is "there", and do you have a Realtor well-established end experienced enough to understand the market and the logistics of transactions to help you?
The area I will be moving into in a few weeks to look for a new home is super hot right now. Everything that comes up is gone within a days time. I want a new house, but it does not matter with my wife. I am afraid of getting a money pit by buying something used. Most houses are being sold over asking and appraisal prices. I would not be scared of a used house if the seller would agree to cancel the contract and refund my deposit if the house failed inspection and/or appraisal. Is this a reasonable request?
You will be "outbid" whether in price or concessions, such as foolish buyers signing offers with no contingencies (no inspection, no financing - all cash, not contingent on sale of current residence).
At least with a new build you can hold the builder accountable. Chasing down Joe Anybody is not only more difficult, but it's a crapshoot on whether or not you'll get any money out of him.
where is "there", and do you have a Realtor well-established end experienced enough to understand the market and the logistics of transactions to help you?
There is NW Arkansas (Bella Vista/Rogers/Pea Ridge)and my agent works in that area all the time.
I'd rather buy a "used" house that has been standing on its foundation for a while and has weathered storms.
A newly built home hasn't yet settled onto its foundation nor had to face adverse conditions. The cracks and deficiencies will surface eventually and then you'll really see some problems.
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