SIt is difficult to find a house these days. It is a long struggle to find a home, but those who are able to walk away with the keys win despite high prices and constant competition. Even though the U.S. housing sector is cooling, buyers feel a tremendous pressure to act quickly, before interest rates go up, making it more difficult for them to afford homes. The historic shortage of housing is at the heart of this market that has become overheated. The bottom line is that there aren’t enough houses to accommodate all those who wish to buy them.
Jonathan Miller of Miller Samuel Real Estate Appraisers and Consultants says the lack of inventory could be described to as a crisis. He tracks over 40 different housing markets in the United States. Home buyers will still struggle even if the inventory in certain markets triples. “This is bordering on anarchy,” he says. “Demand has obliterated supply.”
In spring 2020, the seeds of the crunch were planted when Americans realized they weren’t tied to their commutes anymore and decided it was time for them all to move. At the same time, existing homeowners opted to stay put, while cash-flush investors snatched up single-family homes at a startling clip. Buyers had half the number of homes available by March 2022 than they did two years ago. Redfin found that the homes sold faster and were 34% more expensive, meaning buyers are twice as likely pay more for them than they paid.
A bidding war can also produce a winner. Often it’s a battered veteran of the pandemic market, couples who honed their negotiating strategies over the course of multiple disappointments, finally finding a house when success seemed hopeless. The couple learned important lessons along the way about how to beat the competition and leave with a home.
These are the stories of four buyers who prevailed and how they did it.
Get a home before the property goes on sale
Christopher Morris—VII for TIME
Their identities:
Katie and Tony Mancilla
They wanted this:
Tampa bungalow for less than $800,000.
The result:
For $725,000, a three-bedroom and two-bath bungalow
They did it!
The couple rushed in to make an offer on the house before it was even listed. Working with a broker in the area allowed them to obtain details and other information that they could not get on their own. “Bottom line, find someone to trust in the area,” Katie says.
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Katie Mancilla spent last year in Los Angeles with Tony Mancilla. But her heart is in Tampa. “I moved there during a very tough time in my life,” she says of the Florida city where she’d resided in 2014. “It helped me get through a lot.”
But she didn’t want to live just anywhere in Tampa. She wanted to live in Palma Ceia, a coveted neighborhood of homes well over $1 million, but with a pocket of small bungalows, some listed within the couple’s $800,000 budget.
“I love a home with a little bit more character,” Katie, 38, says of the bungalows, many built in the 1920s. Tony, 35 years old, is in the health tech industry. She works as a digital marketer.
Finding a house to rent in one of the most popular areas in the country can be difficult. It’s even more difficult to do it when you live 2,500 miles away. What do you do when you only have the Zillow photos to help you locate a house?
Devan Weisser, Century 21 List’s real estate agent with Beggins was their ally. Devan Weisser of Century 21 List with Beggins became their eyes and ears, giving them FaceTime tours to view properties and taking quick decisions for them. “She would walk into some of these properties and say, ‘This just isn’t you,’” Katie says.
They flew from Tampa to spend a weekend touring half a dozen properties in October 2021. All of them were incorrect. Some were brand new and lacking the personality Katie desired. Ready to give up on the idea of a single-family home in Tampa, the couple looked at a condo apartment. The apartment was run down and seemed depressing. The couple left Tampa feeling dejected, raw and confused. “I was kind of at my wit’s end,” Katie says. “I had mentally backed out.”
But the next day, Weisser spotted another real estate agent’s Instagram Stories teasing a bungalow that she had not listed yet. Weisser was able to identify the perfect property for Katie and her family, as it is located across the street. It’s also just a few blocks from the park. At a private open house exclusively for brokers, Weisser gave the Mancillas a FaceTime tour, urging the couple to make an offer fast. “It was very, very charming,” says Weisser, who had helped Katie find her first home in Tampa back in 2014. “It had an old-school feel about it.”
Weisser noticed the photograph of the seller and realized that they were her family. She knew exactly what the seller was like.
The property, which would soon be listed for $659,000, had five offers within three hours of the broker’s open house. But Weisser knew that the sellers were a family-oriented couple invested in the historic nature of the community, details she thought would give her clients a leg up. “This is a very special place to me, and I wanted to keep it that way,” Katie says. “A lot of people would have taken that lot and built a $2 million home on it.”
Weisser is convinced that commitment helped put the Mancillas’ $725,000 offer over the top. “How do you stand out in a market?” she says. “We went a step further.”
They accepted. The sale was completed in November.
You can make an all-cash deal (without having to pay any money)
Their identities:
John LeNoir and Sarah LeNoir
They wanted this:
Austin house for sale at $300,000.
The result:
For $319,000, a three-bedroom and two-bathhouse in Kyle, Texas
They did it!
The couple had very little money and used the internet to sell their FHA loan. “We thought it was completely out of reach before we dug deeper,” Sarah says.
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John LeNoir, his 31st birthday was celebrated in Austin on Dec. 27, 2021 by Sarah LeNoir. After a few beers, Sarah LeNoir and John discussed the possibility of purchasing a home. Sarah sat on the couch and scanned through Zillow listings from her smartphone, imagining the impossible.
“It’s been something that I personally did not believe was plausible,” says Sarah, 29, who works in nonprofit management. Sarah noticed a gap in the wall that was large enough for them to get through that night. The couple was chipping away at $18,000 in credit-card debt, and they’d had a two-year reprieve from $600 monthly student-loan payments because of the federal pause on them.
Feeling giddy, they logged on to a local credit union’s website and applied for preapproval for a mortgage. They were approved for $300,000. A week later, they found out. But $300,000 doesn’t go very far in Austin, where the typical home value was $681,000 in April 2022, according to Zillow.
A house in Kyle was put on the market late February. It is located about thirty minutes from Austin. The house was on the market for $280,000. It had three bedrooms and two bathrooms. In less than 24 hours, however, there were multiple offers. The couple called their credit union to get the green light for raising their borrowing limit.
They needed to go beyond preapproval of a Federal Housing Administration loan. Opendoor was one of many startups that helps buyers to make cash offers. Opendoor, in this instance, would purchase the property and then bring it back to their family at the same cost. Opendoor required them to find a licensed real estate agent in order to qualify for the commission. There are risks even with no upfront cost. They could be charged if the company retains their escrow deposit if the client backs out before closing.
The couple had to have cash in reserve for escrow if they accepted their offer. They had just $2,000 to their name in February. “I got spooked,” Sarah says. “I don’t want to make this offer and then not have the money.”
We will soon have cash to pay the required 3.5% down payment for FHA loan. John was a supervisor in an insurance call centre and expected a bonus. They also planned to add a loan against his retirement plan. The maximum amount a home buyer can borrow is $50,000. If the loan balance falls below that, they will pay interest. Homebuyers cannot make contributions to their 401 (k) account until the debt is repaid.
Both sums were not in the bank. Their agent called the seller’s and explained that the LeNoirs could put only $1,200 in escrow, far less than is typical. The seller’s agent told them to put in an offer anyway. That night, before they’d ever seen their house, they offered $319,000 for it. The next day, they went to see what they’d just bid on. Sarah fell in love immediately with Sarah’s trapezoidal kitchen, and the huge yard. “We were on pins and needles,” Sarah says.
Their offer was accepted the next day. Opendoor was able to close the sale in 30 days. Before the couple’s lease expires this summer, they’ll buy it back at the same price—or they’ll forfeit the $1,200 they put down. They drive past the house often, hoping to one day call Kyle their home.
To win a seller’s heart, write a love letter
Their identities:
Rauvynne Sangara and Natalia Alvarez
They wanted this:
A three-bedroom house in Los Angeles for around $1 million
The result:
Pasadena three-bedroom home with den for 1.05 million
They did it!
Their buyers’ letter convinced the sellers that they would make good neighbors. “Don’t get discouraged,” says Sangara. “There are nice people out there that want to sell their house to good people and not just to the highest bidder.”
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On a Thursday morning in January 2022, Natalia Alvarez and Rauvynne Sangara saw seven houses and bid on two: a dated single-story stucco house in Pasadena, Calif., and a three-bedroom in Highland Park, Los Angeles. They didn’t think they had much of a shot at the Pasadena house. They paid $1 million for it, their top budget. The couple knew the prices would go up in a bidding fight, considering that it was just on the market. They also wanted the Highland Park home, which was on the market since a while. They paid $1.08 million more than the asking price, and that’s over $100,000.
“We thought we had a great chance at this home,” says Alvarez, 32, an emergency physician. “We were really excited.”
They had already been house hunting for 3 months and lost 7 bidding battles. Their roughly $1 million budget didn’t go very far in Los Angeles, where the typical home value is just under $1 million, according to Zillow. The couple were also faced with a deadline. Sangara was pregnant in May with their first child and wanted to get out of their rental as soon as possible.
A few hours after they made the offers, Sangara, 32, refreshed her Zillow app and saw that the Highland Park listing had changed to “pending.” They knew they hadn’t gotten the house, because their real estate agent had not called them with any news. “We were heartbroken,” Alvarez says. The couple was devastated and went for brunch.
“I had a full rack of ribs and a glass of rosé,” Alvarez says. “How do we move on from this?”
The couple were still at home, licking their wounds, when Jeromy Robert, their agent from the Agency called to inform them that the Highland Park property had been lost. He had some surprising news. They had accepted their offer for the Pasadena stucco house. No counteroffer. There were no conditions. They simply accepted the $1.05m offer.
Alvarez and Sangara were stunned. “We were like, why?” says Alvarez. “How did that happen?”
According to their agent, the seller were impressed by the offer that the couple made. Alvarez and Sangara hardly remembered this letter, written so long ago and included in every offer they’d made. “What was this magical letter that can get us a home?” says Sangara.
Sangara dug out the letters she’d written many months back. “We can picture our French bulldog, Jackson, running around the back yard and our first child (due in the spring!) sitting in the front yard saying hi to the neighbors,” it read.
Alvarez could see why it worked: “It just made us sound like very wholesome people.”
Three-bedroom house with view of San Gabriel Mountains was situated on quiet street. It needed to be renovated. With narrow cabinets and no dishwasher, the kitchen was old and cramped. Bathrooms were outdated. But once Alvarez and Sangara moved in, they knew they’d landed in the right spot. “I didn’t realize it in the moment,” Alvarez says. “But this was the best home for us.”
The sellers should stay
Caleb Santiago Alvarado for TIME
Their identities:
Hillary Horn and Griffin Ashe
They wanted this:
Denver suburbs: A 4-bedroom home for as low as $850,000
The result:
A 4-bedroom, 3-bathhouse for $762,000 located in Arvada Co.
They did it!
The sellers were allowed to continue living there rent-free for two months after they found the house too unique for most buyers. Horn says: “We got our house because we got better at playing the housing game.”
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Griffin Ashe, Hillary Horn, and Griffin Ashe saw over 100 properties in Denver, made offers on five, and were now moving forward with their lives. But with homes selling for $100,000 or $150,000 over list price, they couldn’t compete and stay within their $850,000 budget.
“The market definitely kicked our butts,” says Horn, 29, who works for a mortgage company. Ashe, 32 years old, is a consultant.
But with each failed attempt, they fine-tuned their strategy in the hopes that eventually they’d strike gold. “There is really nothing that can help you buy a house other than having the most money or having the best terms,” Horn says.
Since they couldn’t offer the most money, they decided they’d offer the best terms.
The lender granted them platinum approval, which is when the lender completely underwrites the mortgage. This effectively removes any mortgage contingency. They added an escalation clause, so that if anyone bid above their offer, they’d incrementally increase theirs up to a maximum limit. And they gave sellers 24 hours to respond so they wouldn’t lose an entire weekend to a house they had no chance of winning. “We thought if we just kept at it we’d find the one that worked,” Horn says.
Their weekends were filled by open houses and they spent their day trolling Redfin for four months. They finally got a break. Four houses within their price range were on the market one week later. There would usually only be one or two houses. More houses meant less competition. The house with four bedrooms, which was listed at $749,000, received no offers. “I walked into the house thinking why are there no offers?” Horn recalls. “What’s wrong with it, for real?”
The house, which was renovated in 2018, is in excellent condition. The house was 2,800 square feet. However, two bedrooms of the four could be classified as masters. While the bigger one is located on the lower level and separated from others, the other three can be considered to be the masters. Horn suspected that the configuration didn’t appeal to families with small children. She loved it. Ashe and Ashe offered to include all of their usual bells and whistles.
However, they added one carrot to the deal: The sellers knew that they were also looking for houses to purchase. They offered sellers the opportunity to live in the house until the closing of the sale, for up to 60 consecutive days.
Only one offer had been submitted, and theirs was accepted for $13,000 higher than the listing price. “We feel like we stole our house because we didn’t have to bid that high,” Horn says.
Letting the sellers stay after the sale closed hasn’t been easy – Horn and Ashe had to make rent and mortgage payments in May. But Horn says it’s worth it. “It’s the peace of mind that we’re paying for,” Horn says. “We don’t have to be in this process anymore.”
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