Quote:
Originally Posted by fliptuner
Since the market is such that no subjects are the norm, how are people (normal, working class, that don't have an extra 3, 4, 500+k) able to compete for properties w/ a subject to sale? Or are they selling and just hoping something comes up before the possession date or willing to live somewhere temporarily?
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Subject to sale is still rare sellers tend to agree to that condition if their home has difficulty attracting "cleaner" offers. In a seller's market it's a terrible way to secure a home since the buyer can be subject to a time clause to remove subjects if another buyer puts an offer in. It's better to buy first and sell in this case. You could even avoid getting bridge financing if the dates matched which also avoids multiple moves. 6 weeks is typical for possession as opposed to 10-12 weeks when I first started. Few sellers today will accept long closing dates which leads me to my next point below.
I think a lot of sale prices today are reflected in that sellers who sold their place aren't looking far enough ahead and are scrambling to find something, consequently putting in offers with absurd prices. My experience with handling multiple offers is that most of the prices tend to be close to each other and the top or top 2 offers are noticeably higher than the rest.
No financing subject in an offer typically means that the buyer doesn't require mortgage insurance (cmhc, genworth) because they have enough downpayment and are only subject to bank approval via bank appraisal of the subject property. Unless the buyer grossly went above and beyond in price bank approval should be expected.
As insane as the market is, you can still submit offers with conditions and come out on top. I just finished a deal last week with subjects and pricing was in line with sold comps. I'm sure many think its bullshit but it does help to have a feel of the activity going on.
Doing this for over 10yrs and this market frightens the hell out of me more than ever as nothing makes sense.