Eventually, he and his girlfriend settled on a short sale, but it was a months-long process marked by constant uncertainty. Klenner called it “the most stressful experience I’ve ever dealt with.” When the former owner’s new living arrangement fell through at the last minute, Klenner had to agree to rent to her for a month while she found a new place to live.
“I really had no choice but to do that, otherwise she could just say, ‘We’re not going to sell it to you,’ ” he said.
For in-demand properties, bidding wars are common. For Redfin’s listings, 53 percent of homes for sale had multiple offers in D.C. last quarter, while in an area such as Atlanta, that only happened 31 percent of the time.
Eva Su, a Government Accountability Office employee, and her husband Clarke, a professor, had an ample down payment and an 800 credit score. Still, they made eight offers on $300,000 to $400,000 condos in downtown D.C. before finally closing on one in March. To stay on top of it all, they made an Excel spreadsheet with their top 20 choices. They got nothing in their top five.
“There were multiple issues — sometimes there was a bid competition and our offer was not accepted,” she said. “Sometimes a cash offer from a developer was accepted prior to a resident offer.”
Some buyers have begun including escalation clauses — provisions that increase the bid price in the presence of competing offers — in their contracts, Sturtevant said, and some are even forgoing home inspections. When there are multiple offers, Szego said some real estate agents are asking buyers to write letters to the homeowners describing how much they love the property, in hopes of swaying them.
Sturtevant said she thinks the inventory problem could have deleterious economic effects on the region if white-collar workers — and their prospective employers — are spooked away by the lack of affordable homes.
“There is a point where people may say, ‘I love my job, but Austin is looking pretty good,’ ” she said. “At a certain point, we may start to worry that people won’t come here, and we need them to do so in order for the private sector to want to be here.”
Heithaus said he thinks the market will eventually right itself as builders light up again. In the meantime, he said it’s inadvisable for anyone to “get emotional” when bidding on a dream house.
“If the real estate agent calls and says, ‘You’re gonna lose it,’ don’t let that enter into the decision-making process,” he said. “Sunlight comes right at your darkest hour.”
Albersheim and Cohen didn’t get the rowhouse. A competing bidder offered to close within 10 days, an extremely fast turnaround that the couple didn’t think was possible. They said they plan to keep looking, and they now think they’ll make clear that their closing date is negotiable in future offers.
“It’s frustrating because I feel like I’m wasting time looking for houses every Sunday,” Cohen said. “I do have faith that we’ll eventually find the right one, though. I’m trying to stay optimistic.”
Next week: Strategies for buyers
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