[supafamous]

Originally Posted by bcedhk

That's a good breakdown. I guess I'm still baffled at how any buyer can splurge on an extra 300-400k to outbid a home. I'm guessing they are going into these bidding wars with a pre-approved mortgage much higher than the listed housing sales prices?

I'd guess that they are getting approved for much bigger numbers than they "need" - my experience setting up my HELOC and getting approved for another mortgage was that the bankers are trying to stretch my numbers as far as they can. For example, they didn't care that I was still on probation at my new job or that my wife's current pay is higher due to a temporary assignment. They're trying to state things as high as they possibly can to get approved for more.

I think if you're making 200K and have 400k for a downpayment then getting approved for a 1.3m mortgage isn't that hard ($5200/mo at 1.4%). That gets you into the low end of detached (tear downs are going for the same price as legit homes lately).