Dear PoP – Developers/Flippers are Buying all the Good Homes

Photo from PoPville Flickr user awmiller

“Dear PoP,

My fiancée and I have been looking for houses for a year now. Petworth is one of our 1st neighborhood choices as we love the balance between urban convenience and green space/parks (we have been looking at houses below Allison St). However, our search has been very frustrating as we have lost house after house to real estate investor who swoop in and offer all cash (I think we have submit and lost offers on 10+ homes now). We have offered over the listing price multiple times now but cash rules everything around us(?). We have since expanded our search to include other “edge” or developing neighborhoods but it is definitely a city-wide trend. From a neighborhood perspective, I guess it is a good thing (depending who you speak to) because investors will make improvements and then flip the house to others, thus improving the housing stock of a neighborhood and driving up home values but we can’t seem to win even though we have what I think to be an adequate budget (up to $450k) for the area.

I don’t know who these investors are (I have created a mental image of a Porsche convertible driving, latte sipping, sun glass wearing, Louis Vutton bag holding, toy poodle having, trust fund baby to help me cope) but in all reality it has been pretty sobering.

I guess my question is, are there any other aspiring home owners out there feeling the same frustration and does anyone know when a regular Joe with financing and not cash will be able to win?”

I feel like I have heard similar stories in Petworth, Columbia Heights and Bloomingdale. To be honest I’m shocked that you have been unable to close on a property in Petworth for $450k. I hope that if you persevere the right home will come through for you. But for others out there shopping around, have you noticed that developers/flippers are getting all the “good” homes?

89 Comment

  • Ugh. I completely feel your pain. I went through similar situations for the two years prior to finding my place in Bloomingdale.

    I’d say you’re doing the right thing to look outside of your initial area/neighborhood of interest. I was 100% sure I would only buy in the Logan area, but ended up way out here in Bloomingdale. And low and behold, I love it.

    I’d suggest looking at absolutely everything on the market in your price range in any possible neighborhood. My place was a complete craphole when I first saw it, but I got “that feeling” when I walked in the door. I offered way low, got it over $40k less than asking because it had been on the market for a long time, and put $50k into it to make it habitable and decent.

    Good luck!

  • Developers/investors don’t buy the good homes. They buy the crappy, moldy places that need work. Making an assumption that by “good” this person means liveable.

    Sounds to me like, if this couple is working with a realtor, then their realtor isn’t doing enough legwork before submitting their offers.

  • (grr I just wrote out a longass comment and it was erased when I misspelled the captcha. damnit, PoP!)

    I went through similar situations for 2 years before I found my place last year. I was convinced I’d buy in Logan, and would only look in that area. I was priced out of countless condos and houses.

    I looked at my current place in Bloomingdale out of desperation. It was a poophole, but it gave me a “feeling” as they say. Offered way less, because it had been on the market for quite some time, then put what I had left over into making it purty.

    I’d suggest looking at absolutely every listing in your price range in any neighborhood you can bear.

    Good luck!

  • Actually the problem is not flippers but first time buyers that are trying to take advantage of the tax credit.

    Flippers buy $300K houses not $450K houses. Keep in mind that flippers usually put $150K into a $300K house to make it updated. 5 years ago they could have purchased the same houses for $150K but all the first time buyers have pushed up the prices.

    Don’t blame the flippers. Blame Obama and his attempt to “fix” the economy.

    For most of my friends looking to buy they are experiencing the same thing. I tell them to wait until after the tax credit expires and the prices will be less due to fewer buyers.

    • uhhh…. evidence?

      • He’s saying prices have doubled in 5 years? Umm…

        I agree there will be some limited price contraction after the credit expires. But keep in mind inventory in desirable neighborhoods dwindles over time. All the first time buyers who just bought up all the inventory around say, 7th street in Col Heights, aren’t likely to sell for another five years or more. People like this guy, who want to buy in less than 5 years, now face smaller inventory around 7th, and will be forced to buy around 5th, 4th, and eventually NE at the same prices.

        Also, he’s also not taking into account foreclosures depressing the market in the short term. As those homes are passed from less qualified to more qualified mortgage payers, prices will go up.

        • Prices have doubled in 5 years, but that was 2000 to 2005. I bought my house in 2005 and it has not gone up in value.

      • I am a flipper in Columbia Heights that concentrates in the Pleasant Plains neighborhood). Across the street from me is another group of flippers (and another a few houses down). The properties we buy and restore are properties that no one else would have bought before. Except now with the tax credit, first time buyers are saying “Hey I can buy a rundown house and fix it up since the government is “giving” me a tax credit.

        And so they push up the prices. You should see my tax bill for my current house (I live in them while I flip them). It’s like the city is trying to shake me down for money.

        I can’t wait until the credit goes away. It artificially inflates the prices of houses in Columbia Heights.

        • So you’re paying the correct tax rate now as opposed to 20% of actual value, no pity, sorry

          • No the taxes should be on what I paid for the property not what the City wants to extract out of me.

            The city is one big Mafia always trying to shake down hard working people.

    • Ha. 5 years ago? Like at the peak of the market when my current Petworth house was sold for $580k, then for $480k in 2007 and for $345k (to me) in 2008?

      As an economist, I can’t really see how Obama’s policies really can blame the flipping phenomenon that’s been in full swing for nearly a decade. In fact those developers are exempt from most of the tax credits make available under this administration. Actually, its the opposite of government intervention that is the cause – its a consequence of free market practices. There’s a demand for rehabbed houses that developers can make a nice profit on if done quickly in significant number. Unfortunately, there is a transparency issue. Most times its difficult to see what exactly level of quality is on their finished projects.

      And lastly, expect home buyer tax credits to continue. they artificially increase the value of homes, but they are politically popular and are greatly sought after by powerful lobby groups like NAHB.

  • Investors typically have a large sum of money, cash in hand. They don’t have to worry about financing options and can also close immediately. They aren’t like first time home buyers who need hand holding through the whole home purchasing process. They typically have done this a number of times before and know the market well. I have friends that have lost out to investors that offered less money, but won the house because they had more immediate cash in hand and could close sooner….

  • thats great news. thanks for sharing. all cash at 450k fast will make my x wife thrilled….
    /guy who wants to thrill his x wife. kidding…

  • i went through the same thing in 2004/2005. take your time, don’t let the investors force you into a bad deal. it took a while for me but i eventually found my home

  • Flippers try to buy @ 70% or less than the typical retail of the neighborhood. If they buy @ full price or near to full price, it’s really hard to make a profit.

    If you’re trying to pay the market in Petworth, you’re being outbid by other homebuyers. (you’re probably bidding on something a smart flipper picked up last year, when few could get financing)

  • How is this possible?
    Looking at redfin I see lots of house under $300K that’s been on redfin for a long time. Here are some examples:

    3603 WARDER St NW4br 1.5 ba $275k, on redfin – 66 days

    4132 NEW HAMPSHIRE Ave 4bd 2ba $373K, on redfin – 64 days

    There are a lot more in the 350-450 range that have been on the market for months. Check it out.

    • i’ve found that a lot of homes that are still showing on websites are either already under contract or just haven’t been updated.

      it sucks, but it’s true. there are homes that i spotted months ago, that are still popping up on lists. no idea why.

  • As a homeowner, this is good news After buying a year and a half ago, i am convinced of the value of this neighborhood. good to see others are seeing it as well.

  • My husband and I looked every weekend for almost a year. We looked at over 200+ homes/condos in and around Petworth, Columbia Heights, Park View, Bloomingdale, Logan, H Street, and Capitol Hill. We wrote 8 offers before we finally closed on a (n awesome!) home in Columbia Heights. Each house we lost had multiple offers, but in no instance were we beat out by developers.

    While there are still lots of homes out there on the market, as Thor noted, the homes that have that special something (like great, quiet street, original wood work and turn of the century details, beautiful back yard, awesome balcony) that are priced well/often even below market value get a ton of interest and fly off the market, often in a matter of days, often for well over the asking price.

    I would definitely recommend expanding your search just to give you a sense of what else is out there (we learned a ton of great places to hang in the city by looked outside our initial target neighborhood!) and just keep at it. It sounds like you are being responsive to the market and not just the sale price (which we found to be key) and remember you have a lot of other ways to distinguish yourself in your offer besides straight case. We wrote a personal letter to the seller about how much we loved the house that we finally got and I think being human helped distinguish us from the other offers that came in.

    I know it’s frustrating, but keep at it. And good luck!

  • @Keep at it is right. Sometimes there’s nothing like the personal touch. When I sold my parent’s home in Crestwood I had very little money to really renovate it and developers swooped in like vultures due to the low price. I ended up selling to the couple with young children who came by at the last minute and caught me at home. After speaking with them I had a feeling they wouldn’t butcher the old house and I sold it to them. They are still there 15 years later after renovating it back to victorian glory. My father had bought the house 33 years before from an old woman who rode in his cab and thought he was a nice man with a family and sold it to him even though he wasn’t the highest bidder. You just never know so hang in there.

      • wow. I love the legacy in this house. It’s been well-loved and passed from one caring owner to another, then another! Awesome.

        May it never become a McMansion!

    • awww that is really cute.

    • Sellers of my house connected with us right away and were very pleased that we weren’t going to gut all of the great period details.

      That said, they still got > $50K above list price. In our defense it was at least $35K underpriced at list, but they made out pretty well too. We don’t have buyers remorse so win-win, right?

      When and if we sell, I could care less what someone else does with the house. It becomes their joy/headache.

  • I offered on 8 houses, before getting mine after about 7 months. Like you, I know that several of my offers (some above list) were won by cash buyers (a good Realtor will get that kind of info out of the listing agent). In fact, my first house offered just went back on the market last week post-flip — under contract in 5 days, for a gross profit around $300,000.

    This is a golden time for investors with sterling financials. These people are real investors — pros, not the wannabe amateurs who were foreclosed upon in droves over the last year or two.

    All I can say is keep at it. Check the MLS every day, and be ready to jump fast (seriously — that evening) on anything really hot that lists. Second looks at properties that have high DOM is also a good strategy — just adjust your offer accordingly. Once a seller is engaged by a determined buyer, they become a lot more willing to drop.

    It only takes ONE winning offer, and remember in the end David does beat Goliath. Good luck!

  • Back in 2002 I was also in a price war on a house near 4 and R street NW. Loved the house and was just excited to move back to DC from VA. After several back and forth, 50K over asking, I lost. I was so crushed and abandoned the house search for a while, but then 3 months later, I came to a neighborhood called Columbia Heights. I heard about the various things planned for the area so I thought I check it out. I drove my car street by street and came across to my current house. I saw a renovation in progress in a row house 3 blocks from the metro so without hesitation, I got out of my car and walked in the house. The workers didn’t mind, they gave me the contact information for the seller… I went upstairs, downstairs, and realized that despite the mess it was home and I loved it. I immediately called the seller… a flipper, and expressed my interest. Submitted my offer, few days later it got accepted. I took a huge risk buying a house when there was no sign of development in all those trash filled, chain link fenced lots, but I was lucky. For me, I am so glad I didn’t buy the house on 4 and R as the area is still struggling compared to CH. Also, I would have paid 50k more, thus more difficult to manage the mortgage. So, my advice doesn’t be down on yourself if you lose a house, maybe it was just for the best. Look elsewhere.

  • Just to second what everyone else is saying, getting a good deal is all about acting fast. I check the MLS 3-4 times a day and if I see a good deal, I’ll make an offer within hours. I’ll write a cash offer with no contingencies, so I’m taking a risk, although I’ll only do it if I feel comfortable that there is value in deal. Sometimes I’ll buy houses before they’re even available on the market by tracking down sellers and networking with other real estate people (you can do the same thing!). One way to be competitive as a regular homebuyer is to give the seller some incentive to take your offer over a cash one, which usually means offering slightly more money. Or, find something that makes your offer stand out- move up the settlement date, remove an inspection contingency, etc.

    Also, if it makes you feel better, I do this for a living and I often feel the exact same way you’re feeling right now. It’s hard to get a good deal in DC! There is lots of demand and a limited amount of supply. Also you’re looking in the same geographic area that everyone else is looking in.

  • Finding a house is kind of like dating. Failure is the norm, so if you can get accustomed to losing but learn along the way, you’ll be in a better position when the next house comes along. Also you’ll be less tempted to rush into something bad just because you can get it.

    Also, get a new realtor if you feel like you’re not making progress. There are thousands of them and after you weed out the gabba-goons they are all more or less the same.

  • I wish a developed would buy the foreclosed mess next door to me!

    • I’ve heard it’s remarkably difficult to buy a foreclosed home as an individual investor. My RE agent advised against it because it takes so long to actually close the deal and there’s so much up front cash.

      If it’s in a reasonable neighborhood and it’s been there a while, there’s a really good reason it’s not sold yet.

    • What’s the address?

      And don’t tell anyone else. I need to buy this one at rock bottom prices. All those first time buyers keep out-bidding me and pushing up prices.

  • My girlfriend and I have lost out on about 10 properties in the past year to all cash offers. We have been looking to buy in Montgomery County though. We even made one offer that was 15% over asking price. It was the highest bid, but they sold to an all cash buyer who also offered no inspection.

  • Have you looked in Capitol Heights Maryland, I have a home that I am willing to sell you for 170k, 3br 2ba. close to Walker Mill Road. Move to Capitol Heights not Capitol Hill. Good luck

  • We just kind of got lucky with our house. It was too high for an investor but from the pictures posted online it looked like it needed work. It actually just needed a few things nothing major.

    Anyway, that is my advice to look for houses that are above what an investor would pay – probably 300K+ but that may appear to not be move in ready. The house was on the market for 8 days and we jumped on it- there were no other offers.

    Also, just by looking at redfin it really just seems that there is not much inventory South of Allison. We had the same issue there were only about 5-8 houses in our price range in the area we wanted. When we found our house we just jumped on it.

    Someone else mentioned 4132 New Hampshire…. If you haven’t checked it out I would… definitely too high for an investor but maybe just needs a few things to make it great.

  • I feel your pain. This was before the bubble burst in 2007, but we ended up buying in Columbia Heights just eats of Georgia. Unintended consequences was I avoided the cluster f* that can be in Columbia Heights propah especially around DC USA but still close enough to walk there for shopping and the streetcar line will be running down Georgia Avenue. Woot, trolleys and public transportation! But I digress and second the comments to expand your search zone. And developers often buy houses as-is, which makes it easier for the seller. I’m not recommending you do that unless you have an amazing contractor and inspector who can go over that place with a toothbrush. Good luck!

  • 744 Park Rd NW is for sale. 450K, but I bet you could get it for 400.

  • Having just gone through the process, I’ll share my experience. My settlement date is tomorrow. Can’t wait to get the keys in hand.

    I started looking for a foreclosure (fixer upper) in November 2009, after the FTHBTC was extended. I too was getting sidelined by cash-only offers. Note that cash-only offers does not mean “cash only”. Investors take out hard money loans which allow them to close quickly.

    In January, I came across an article about this same issue and how FNMA created a program to allow primary residents to make offers before investors for 15 days. The program is called “First Look” and is only available on FNMA foreclosures.

    Last February, I found a REO listing that was FNMA-owned. I quickly made an offer, stating that I would use FNMA’s HomePath mortgage product. I later found out that my offer was not the highest, rather I played my cards right. FNMA wanted to sell the REO to a primary resident using their mortgage product.

    I had tried to switch my financing terms after my offer was accepted, that way I could use a 203k. Unfortunately, FNMA declined and I will need to refinance in order to secure rehab$$. Given FHA’s recent PMI changes, I’m going to re-fi using FNMA’s HomeStyle mortgage product.

    The best advice I can give is to spend your free time trolling trulia, redfin, and zillow. You cannot count on your lender and Realtor for everything.

    BTW, it does not sound like you’re getting outbid by investors, rather savvy homebuyers eager to buy low. As mentioned above, investors determine their offer price by taking 70% of ARV minus cost of repairs.

  • I purchased a house on North Capitol near R.I. for just a few thousand over asking, 75% of my closing costs paid, and conventional financing, with a general inspection, financing, and utilities being on and operational contingencies. The asking price was extremely low for the house and area, it was bank owned, and there were multiple offers. Some of the competing offers were all cash, but I won out because I got mine in less than 12 hours after the property went on the market and they accepted my offer before they received the others.

    The key is staying on top of the market and having an agent that will work fast and make time for someone who is hungry to get a contract ratified.

    I’ve seen some good deals happen since in LeDroit, Bloomingdale, and Eckington but mine is definitely in the top 5.

    So this is definitely a success story of how a first-time home buyer can succeed in this market.

    I was certainly very frustrated for a few months… all the good deals would go quickly. The good houses that didnt go quickly were way overpriced. So basically, I spent those 3 months getting a thick skin and learning that I needed to jump on things quickly.

    I submitted offers on 3 different houses – the first I low balled because the seller was unreasonable and we couldnt find a mutually agreeable house (it eventually closed about halfway between our 2 prices), the second one I also low balled some and wanted to do FHA 203k – I never heard back from that one until I pulled it bc I had a ratified contract on the place I live now.

    So be patient and learn to act fast! There’s no need to pay more than you think is fair just to get a place. There will always be new ones on the market.

  • I just bought a foreclosure in beautiful Brightwood, after having a few houses swiped out from underneath me, presumably by flippers. OP, you’re doing the right thing by expanding your geographical focus…there are some real gems out there in neighborhoods that might be a bit off your radar (for now).

  • I think another thing to keep in mind is that the market has been so bad in the last few years that the only people selling are those that have no choice. So Petworth homes for sale are dominated by estate sales in poor condition, with a few flips here and there. You see very few homes on the market that were renovated by the homeowners while they were living there – and if they are listed, they go fast.

    I think as the market improves you’ll see more of these homes listed — there must be a lot of backlog of people who wanted to sell but have been avoiding it hoping for a better price. I know, I’m one of them – I rented out my house when I moved in with my husband, because I can’t sell it for what I paid for it in 2005. Maybe in another year or two.

  • Wow. I’m not in the market to buy a place in DC, but from what I’ve read and what I’ve heard from friends who recently bought, the market here is insanely tight. That puzzles me – given the state of the economy and all the foreclosures out there, I would think that home purchasers should have an easier time making a deal, particularly in marginal neighborhoods.

    • Well, there isnt as much selling going on above $600,000 as there is below 500,000. Even in high-end neighborhoods like dupont. The reason is that lenders are being stingy and requiring 20%+ for downpayments. The number of people with 100-120k cash right now is small. People dont want to liquidate investments to access cash because the values have gone down so much. People with the cash may not want to move.

      So the real competition is actually in transitional, recently gentrified, and questionable neighborhoods. Anything under 500,000 will garner quite a bit of interest. Anything under 400,000 that is in reasonable shape will go offmarket within a week. Anything under 250 will go in a few days even if its condemnable.

      • you’re dead wrong about investment values being down – the stock market is at a peak at the moment.

        • Its at a peak for the last 2 years… however people who have 130,000 invested haven’t just been investing for 2 years. The indices are still about 20% off their 2007 peaks and many individual securities, international index funds, energy funds, and many other investments are badly depressed still.

    • the state of the economy in DC is great. Unemployment among the college educated is near zero.

  • Definitely expand your search. Have you looked in Brookland? We started out looking in Petworth/Columbia Heights as well and then found our house in Brookland and love it. Not as trendy, but a great neighborhood with houses under $450,000 for sure (on the red line, too).

  • Flippers aren’t evil. In many circumstances someone trying to buy what appears to be a distressed property have no idea what may become serious and expensive issues. Good “flippers” as you call them take on this risk. Now there are bad ones that just put lipstick on a pig and call it good. You have to be able to see past the granite at the bones of the house.

    Without developers, a lot of folks don’t have the ability to buy the home and have enough cash on hand, or the ability to get a home improvement loan on top of their mortgage.

    A lot of it is also just the market right now with lenders, you need to have a large down.

    A few years ago, at the very bottom of the market, I was trying to move a $700k+ condo. I had 3 offers come in at once from a range of 710k-750k. I was forced to go w/ the lowest offer as they had 50% down and guaranteed financing. Given the market at the time, the other buyers had less than 15% down and while the offers were good I wasn’t going to take the chance losing a sale over a financing headache.

    The same thing is the case with these properties.

    If you want, I know a great group of realtors that specialize in your situation, ie finding a house with good bones in a good neighborhood that doesn’t need to enough to entice a full remodel prior to resell.

    Also, when you are villifying those that are rehabing property (some very rightfully so) keep in mind the cost of transfer taxes, realtors on both ends, and tax while the process takes place. Honest developers are seeing 3-10% return after all costs are factored in. Sometimes you will get a rare gem and see 15-30%… but doubling your money is not happening in the current market unless you are are in the business of cutting serious corners and targeting stupid buyers.

    • Flipping can be profitable. But only if you actually know what you are doing can you double your money. You have to stay current on color trends, counter top choices, green options, etc. and not put money into items that bring little value to the house (in other words you need to make the house as Pottery Barn generic as possible).

      No flippers I know cut corners these days. It’s just a waste of money as the mortgage inspectors will catch them and force the repair. So flippers today actually remodel the house the correct way the first time. They are just better at negotiating with contractors than say your first time home buyer.

      • Really no cutting corners? You must not go in many houses. I would say 75% of the houses I’ve gone into that have been recently flipped have had all the signs of being done very cheaply.

      • uh, no they don’t. You’re just wrong.

        • neener sounds like a troll. Maybe neener feels like he/she over-paid for a house and wants someone to blame?

          Let’s not blame flippers. Let’s blame the White House as the guy above said.

  • I guess I don’t get the letter writer’s complaint. Sure, the housing hunt can be frustrating, particularly if every national news story is claiming that the housing industry is in the tank and you’ve lost 10 bids in a row, but it’s basic economics …

    Think about it from the seller’s standpoint: While a handful may care about that “personal touch” due to some sentimental value, most just want to sell the house with as little trouble and as much profit as possible, and almost all don’t care if you’re going to live there or flip it. All-cash buyers can remove financing contingencies — no small deal in the recent lending climate — so, all things being equal, who wouldn’t take the cash offer? I guess my advice is to get a better realtor (and I am the first person to advise buying without a realtor) if you’ve lost 10+ straight, and just be willing to really go for a property you love. All 10+ of these places couldn’t have been your dream place, but I bet there was at least 1 that you really liked and, in hindsight, you’d have stretched your budget to get (obviously, recognizing that banks are a little tighter in what they’ll give you these days and have a lot of say-so re: your budget). Next time you see a place that gives you “that feeling,” jack up your escalation clause $10-15k more than you’re comfortable doing. Think about it this way: presumably, over the last year, you’ve spent at least that much in additional rent.

    • I agree, find a better realtor.

    • blester01

      I agree with you, but also have to disagree about flippers being evil. Typically flippers/ developers will go into an old home and nuke it by removing all of the great old details from the house and replacing it with Home Depot doors, trim, flooring, etc. It is sad to see a conversion of a house with great character get lobotomized into a suburban house.

      We have lived on Randolph for almost two years and this has happened to two houses on the block already. The work is above average at best and it just seems to damage the essence of the neighborhood. I would rather have someone go into the home and renovate as a long term investment.

      • in most cases I’ve seen those “period details” have been destroyed by decades of neglect. flippers buying distressed properties are mostly picking up disastrous houses.

  • Ha ha… nice analogy. Along those lines…

    1) Try not to fall in love with anything too soon, because it’s probably not going to work out

    2) If you really do fall in love, then be willing to pony up and work for it. Don’t lose a house you really love over a few thousand dollars by trying to get the best possible price. That extra money doesn’t mean a lot on a mortgage but it might mean the difference between getting it or not. Offer a few thousand above asking.

    At the end of the day, unless you have all the time in the world, you should be willing to pay what you think a house is worth, not what you think you can get it for. Because if you aren’t, someone else will.

    • Spoken like a realtor….

      You should be willing to let a place go that you love for any amount higher than what you want to pay. Dont let the realtor attitude of listening to your emotions dominate.

      This is a major financial decision and if you allow it to be emotional rather than rational, you will lose out in the end.

      Remember there will always be more houses that come on the market. Be patient.

      • Not a realtor, but rather an occasional homebuyer.

        Each time I’ve bought a house, I’ll look at 20 or 30 houses before I find something that is in that sweet spot of right location, right condition (which for me, means it needs enough work to keep the price down, but not so much I can’t live there), and has original details and charm that I’m going to want to put all that work into it. That’s a lot of time pounding the pavement.

        Sure, there will always be more houses. But have you not taken any heed of the fact that people here are spending a year or more trying to find that house, losing again and again?

        I’d much rather spend a few thousand dollars more and NOT do that if I finally found something that’s right for me. That time and effort has a very real value. And every month you don’t buy something, is another month of paying mortgage and living in your own home, instead of renting.

        I’ve never argued for “paying more than you want to pay.” I’m arguing against trying to get the best deal possible on a house you really like — because you probably won’t get it, as all these stories confirm.

        If you have all the time in the world, then you can probably end up with a great deal. But that takes a lot of legwork, great timing, and luck. If you don’t care if you move in in a month or two years, then keep low-balling everything that’s decent until something sticks. Go for short sales! Why not?

        But if you actually want to move forward with your life — which most people looking at a first home purchase really do — then paying a little bit more to give yourself a much better chance at closing the deal is the only way to go in this market.

  • i sympathize with the letter writer. we’ve lost out on one house to an all-cash, zero contingency offer by an investor…even *after* having removed our financing and appraisal contingencies. we’ve also lost out on two offers to couples who were simply willing to pay more than we thought the houses were worth. c’est la vie.

    that being said, i agree w/ anon @ 11:16am. i wish more people were sentimental about who they sell their homes to (i.e. want it to go to somebody who will take good care of it), but that really is only a small handful. in this market, you have to be willing to act very quickly. (not that that’s helped me yet!) and are you sure your 10 offers have all been good, competitive ones? just offering over list doesn’t not necessarily make your offer attractive. have you tried talking to your agent about what else you could have done to make your offer more attractive (removing contingencies, etc)? has your realtor done the leg-work to find out if there are investors bidding on the property and if it’s even worth your time to put in an offer?

    finally, a plea to investors/developers/flippers/what-have-you: for the love of god, please stop renovating all original details and character out of these houses. i don’t mind if you scoop up the house and do the work yourself and ask me to pay you a bit of a premium so you can make your profit. but please leave some of the character! if i wanted a house that felt like new construction w/ generic “open floor plans”/granite countertops/etc…i’d move to the ‘burbs and buy new construction! (i know i can’t be the only one that feels this way!)

  • “for the love of god, please stop renovating all original details and character out of these houses”

    Yes, please!! Everyone can spot the Home Depot specials a mile away and all my friends who have bought a house lately all talk about those nasty stained-glass-inset doors all the flippers use. They drive by and don’t bother to even look – you know what it will look like inside.

    Some recent sales on Upshur St (725 and 727) show what a little care for detail (nice quality finishes, good light fixtures, and yes, an actual real wood door and no cheapo gold brass stained glass) will get you – a much higher sales price:

    • Yes, well I bought a house with all the character but when I realized that with the character came serious amounts of poisonous lead paint I had to have lots of it ripped out at my expense. If there is paint on your wood trim it is probably poisoning you.

      Why people think that flippers are stupid is beyond me. A flipper on my house renovated a house that was so trashed it had an interior door used as a front door. Sure, the current front door is lame, but it probably lost its “good” door during the crack wars.

      I doubt most flippers really want to do that unless they’re not from this country.

      • Please stop panicking about lead paint. Seriously. The amount of lead that it takes to harm an adult is dramatically high. Unless you are routinely sanding that lead paint and leaving the dust around to be breathed in then you’re fine.

        You can remove lead paint with a heat gun set lower than 1100 degrees (most are 750) and if you’re super worried wear a HEPA respirator (50 bucks). Vacuum with a hepa equipped filter and wash your hands and clothes frequently.

        If you have children, animals, or pregnant residents disregard this and paint over all lead paint or have it professionally removed.

        • I really don’t know why people freak out about lead paint. It’s actually the lead in the water that’s killing people in DC most of the time.

          Lead paint, unless it’s peeling or flaking seriously, and is consequently eaten, is not dangerous.

          If you have lead paint on the sashes of double-hung windows, AND you have small children, then you should consider having it removed since opening and closing the windows can cause it to flake.

          Otherwise, unless you think your baby will be gnawing on your woodwork, there is really nothing to fear.

          Now the DC water supply – that’s a different story.

          • Breathing in lead is also harmful. However, its really an issue of “how much”. Prolonged exposure to high levels is hazardous for adults. Any exposure to moderate-to-high levels is hazardous for children and pregnant women.

            Now, how much is too much? The attitude of “any is too much and will cause your brain to turn to mush” is pretty ridiculous. Its a widespread view – and its created by panicky over simplified pamphlets. Removing paint from, or looking at paint on, wood trim is not going to harm an adult unless you are unbelievably reckless.

            However, I would be more conservative if children were involved.

          • “Breathing in lead is also harmful” – true – but why would you breathe in lead paint that is stable or covered with other paint? The only time it becomes airborne is if it is disturbed – as in, when you remove it.

            Like asbestos, in many cases, the cure is worse than the disease. Removing all the paint from every piece of woodwork in your house will release all that badness in the form of fumes, dust, etc. which will potentially be in the air for months.

            “However, I would be more conservative if children were involved” Yeah – me too. I would deal with painted windows if I ever opened them. But removing paint from woodwork, or replacing woodwork, is silly, insanely expensive, and could even do more harm than good.

  • Shoutout for Manor Park / Brightwood area, plenty of homes up that way!

  • Will – why is there so much interest int he Pleasant Plains area? Do you real estate pros know something the rest of us don’t?!

    • saf

      Well, they’re about to get a Heritage Trail. Also, there’s streetscape work coming (someday. or so DDOT says) to Sherman Ave.

      Plus there are nice houses and it’s a great location.

    • You cross over Sherman and the price of housing drops significantly. Plus the houses on Euclid and Fairmont have incredible views.

      And if you can’t sell your house in Pleasant Plains, you can always rent it to Howard students. So you are covered either way.

      That’s the advantage of Pleasant Plains and why it attracts so many flippers (I mean House Restorers if you want to be politically correct).

    • Don’t forget that Georgia Avenue is in Phase 1 of the streetcar plan for DC. Trolley rail!! Sung to the tune of the monorail song from the Simpsons

  • Don’t be so quick to judge that an all cash offer is a flipper. I just sold last summer, and had two all cash offers, and one that was offering over 50% cash – all from parents bringing cash to the table. With investment returns being low these days, apparently the rich are buying real estate for their kids. And yes, I accepted the offer that wasn’t all cash. I thought the one couple that was going to actually pay for part of the home might treat it better than the ones that would be getting it as a gift. Does that help the OP’s situation? No. But it might lend more support to your porsche driving latte sipping mental image.

  • (1) Start working with a Realtor, if you’re not. If you are, get a new one. They’re not doing their job if you’ve lost out on 10 offers in a year, and they can’t find you a house in your price range in your designed neighborhood.

    (2) Stop looking at short sales/foreclosures, if you are. Those tend to be in the worst condition, and biggest fodder for investors. They’re also a huge pain in the ass for buyers.

    (3) Petwoth above Allison street is still lovely, and perhaps sneaking over to 16th Street Heights* will also find you a nice homes–We sold a great 3BR/1BA rowhouse house with a brand new kitchen & all new systems (electrical, plumbing, roof) and lower level in-law suite for $439,000 last year at 15th & Varnum.

    (4) Full Disclosure: I was raised in 16H, and think it’s even lovelier than Petworth. I am also currently a Realtor.

  • LaLa – you’re talking about my house!

  • To the writer, you are not alone…I have been looking since October 09. Granted I probably couldve been in a house by now in one or two occasions if not for the combined forces of my own 1st time homebuyer syndrome & my ex-realtor. It is frustrating but I just think to myself “I’ll land where Im supposed to(whether its Petworth or Brookland or even a place like Hillcrest)” So yes def. expand your places of interest but dont settle. You will get a place eventually.

  • My wife and I have been looking also and we have been very disappointed in the inventory. However, today I got my “New listings that match your search” e-mail from Zip Realty with four of the best listings (price / condition / location) I have seen in a while. Spring should improve the market inventory – I hope.

  • I agree, with Spring will come new inventory. Get a new realtor, they really aren’t all the same. Our friends are also currenty looking in Petworth, and their realtor has been the issue. They finally got a new one, so watch out. They may steal the next house from you and your not-so-hot agent!

    I went through the New Hampshire house before it was temporarily off the market. I’m not a home inspector, but I thought the price was great. You’d need to put a few bucks into it, but it already has a basement unit set up which would give you a very low mortgage.

  • I’m interested in Brightwood, Woodridge, Kingman Park, Rosedale, Petworth…any suggestions on real estate agents that are familiar with these neighborhoods?

  • Question: When do you let a buyer’s agent go? I’ve been using one for over 8 months, have put in several offers with no success, and see no end in sight. I do, however, feel a little bad ditching the agent b/c he has been working with me for 8 months and if I leave, he won’t see a penny. When do you just have to cut them loose?…or how do you determine if he is doing all he can? Thanks for any thoughts!

    • trust me u know…i was w/ my realtor for 3 months and saw about 25 houses. After a while it becomes apparent, and the first sign is feeling bad b/c of all the work they have done. I struggled w/ “should I or shouldnt I” for about a month and missed out on a few properties in the process. My advice to you is call up some agents in the meantime and get a feel of what you may be missing out on.

  • you need a better realtor, we went through the same situation as you, and our cushion was only 250 not your lofty 450 AND we were still able to find a house IN petworth!

    ask for james or lisa at senate realty.

    they are a small local company that isnt really worried about trying to sell you a 450 house or 500 house..they are just worried about getting you a house whether it is 70k or 700k.
    We went through 3 agencys before we found them thinking long and foster, wells fargo or any bigger company would work.
    But in DC the market for big companies is so damn competitive that they just try to sell you the max amount you can afford to make the most available.

    and no im not james or lisa, just a person that was in your situation months ago that they worked really really hard for.

  • Sharon, I recommend you don’t rely too much on a realtor, find places yourself and present them to the realtor, otherwise you may be looking forever. The primary purpose of the realtor is to absorb liability for errors in the transaction 😉

    This of course transitions around the upper middle class level when you get more realtor attention than you want.

  • Advice: Not a bad idea to expand search area a little bit. Late ’08 our area of concentration was Petworth south of Allison and N. Col. Heights. Ended up on Emerson and are fine with that (crossed fingers for streetcar up Georgia). Good luck!

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