gap

Sunday evening, Kim and I made an offer on a house. The Greenwood Place (as we’ll call it) was listed at $649,000. We offered $677,777 escalating to $777,777; no repairs required; and a $50,000 appraisal gap waiver.

Our offer was not accepted.

That’s right: Two months after selling our home — and three months after beginning to search for the next place — Kim and I have waded back into this crazy housing market. We’re not sure how long this process will last (or what the outcome will be) but we’re prepared to be searching for many weeks, if not months.

Both our mortgage broker (Michael S.) and our real-estate agent (Michael K.) tell us we’re doing things exactly right for this market.

• Kim and I both have credit scores over 800. “Everything looks unbelievably perfect here,” Michael S. told us in June. “That’s amazing. Perfect credit.”
• We’ve sold our previous house and are currently renting a place while we search for another. This allows us to make offers without home sale contingencies.
• We’re willing to take calculated risks to increase the strength of our offers, but we’re not willing to compromise our financial health in doing so. “You can borrow $850,000 all day long,” Michael S. told us. “You’d probably have zero difficulty qualifying for $1 million.” We don’t want to borrow a million dollars though because doing so would severely compromise our other goals.

All the same, there aren’t many homes on the market right now. Demand far outpaces supply, which is driving prices up and creating insanely competitive situations. It doesn’t matter whether we’re doing everything right. We’re still going to run into folks who can make cash offers at more than $128,000 over a $649,000 asking price.

Our plan? Be patient. Remain vigilant. We don’t need to buy a home at the moment — and, in fact, perhaps it would be best if we didn’t — but we want to be prepared to pounce if/when we find the right place.

Today, I want to share a bit of our thought process as we attempt to buy a home in 2021.