Home buyers learn swift action pays off

Those in market must pounce as inventory remains tight

Bridget and Sean Rose had to extend their lease on their apartment after losing out on what Mrs. Rose fears was her dream home. Their offer, made on an hours-old listing, was the third on the property.

Chicago Tribune

Brian McCord, left, and Jamie Blondin stand outside their Chicago flat. When the couple saw other buyers touring the home with a tape measure, they offered 96 percent of the $649,000 asking price.

CHICAGO — If it wasn't the two failed offers or the missed opportunities, it was a tape measure that convinced potential home buyers Brian McCord and Jamie Blondin that they just weren't moving fast enough.

When they went to see a two-flat in Chicago's Bucktown area earlier this summer, they liked everything they saw, except for the other potential buyers also looking at the house.

"Not only were they looking, they had a measuring tape," Mr. McCord said. "And that made us much more nervous," Mr. Blondin added.

They promptly offered $626,000 for the $649,000 house, 96 percent of the asking price. The transaction closed earlier this month.

The circumstances that Mr. McCord and Mr. Blondin encountered — shorter marketing times, multiple offers, and bidding wars — can create anxious home shoppers forced out of their comfort zones.

A confluence of factors is accelerating the pace of transactions in choice and stressed neighborhoods. Mortgage interest rates, while they have ticked up the past four weeks, are well under 4 percent for a 30-year, fixed-rate mortgage. More sellers are setting realistic list prices.

Six years into the housing crisis, consumers who have sat on the sidelines are trying to take advantage of it all, as are investors who are scouring the market for properties to turn into rentals.

Bridget and Sean Rose had to extend their lease on their apartment after losing out on what Mrs. Rose fears was her dream home. Their offer, made on an hours-old listing, was the third on the property.

The market trends are forcing a re-education of clients and real estate agents. It used to be that when agents told each other there were competing aggressive offers on a listing, the agents might call each other's bluff.

But at least three times this year, clients of Warren Davis, a real estate consultant in Chicago, have lost deals to offers that he thought were bluffs. Mr. Davis has taken to role-playing with clients, pretending that they find a property and training them to make a decision quickly.

"No one likes to rush," he said. "I tell them when you find a good opportunity, you have to pounce. You can't hesitate. When you go back and see it under contract, you go through an emotional loss."

Some of the quickened sales pace is seasonal, but it's also because of a lack of inventory. Housing inventory in July was nearly 24 percent lower than the same month last year, according to the National Association of Realtors.

Some homeowners who would like to sell their homes can't do so because they are underwater, owing more on their mortgage than the property is worth. Others may be waiting for true appreciation in the market to net a real profit.

The median time a home was listed for sale was 69 days in July, a 29.6 percent plunge from the same month just a year ago, show data from the National Association of Realtors.

"The serious buyers are all looking at the same thing," said Mark Reitman of Redfin. "A couple of years ago, there was more inventory, so there was more choice."

The picked-up pace is leading to sweaty palms for buyers, and agents say it takes a few lost chances for consumers to grasp that the local real estate market isn't in the same poor shape it was two to three years ago.

"The myth is that it's a buyer's market right now," said Bridget Rose, of Chicago, who just extended an apartment lease after losing out on what she fears may have been the dream house for her family.

On a recent morning, she and her husband, Sean, saw an hours-old listing for a home in Chicago's Edgebrook neighborhood.

They left their workplaces at noon to see it. By the time they arrived, there was an offer on the house.

After seeing the home, they went outside, leaned on the hood of their car, and wrote an aggressive offer, by then the third offer. "I said, ‘I'm going to throw up if we get this and throw up if we don't,'?" Ms. Rose said. "The drama of it is crazy."

They lost the house to someone who not only offered the asking price but removed the contingency that they couldn't complete the purchase until they sold their current home.

"If it's finished, if it's updated, it's gone in an instant," said Pete Mangione, the Roses' agent.

The Los Angeles Times contributed to this report.