Getting Outbid In a Red-Hot Market, and Other Tales of Home-Buying Surprises

Getting Outbid In a Red-Hot Market, and Other Tales of Home-Buying Surprises

You've secured your mortgage preapproval, crunched the numbers and come up with a ceiling for your home-buying budget. You did your homework finding a reputable agent, and signed up for as many real estate websites as possible.

Yet even when you’re doing everything by the book and have carefully asked friends and family for their advice on potential red flags, the process of purchasing a house can be so complicated that it’s entirely possible to find yourself blindsided by a roadblock no one has prepared you for.


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That’s what happened to each of these buyers. After choosing a home they loved and making an offer, they found themselves facing down an unforeseen challenge they never could have imagined.

Here's the twist that caught each buyer by surprise, the options they were forced to navigate and how they ultimately made home ownership happen.

New-homeowners-BocaRaton-FloridaAdrienne Mazzone, Boca Raton, Florida
Home-Buying Surprise: Days before closing, she learned a stranger's name was on the title

Last year Adrienne Mazzone decided to relocate with her fiancé, two kids and three dogs from central New York to southern Florida to be closer to family. On a visit, she’d fallen in love with a house with a large swimming pool on an oversize corner property in Boca Raton.

Her $319K bid was accepted immediately. Adrienne was already in the process of selling her New York home and she had to hand over the keys in a few weeks. But the homeowner in Florida agreed to a speedy two-week close, so Adrienne could seamlessly move in after her current home sold.

Though a two-week closing is unusually short, everything had gone off without a hitch, and Adrienne felt there was no need to worry. She'd purchased real estate before, and she didn't see any worrisome issues—that is, until four days before the close was supposed to go through.

While she was helping movers load her furniture into a 26-foot U-Haul in New York, her attorney called to inform her that, unbelievably, another person’s name besides the seller’s was listed on the house title. Turns out it was the owner’s sister; without the sister’s approval the sale was off.

“I was standing in my living room, which was completely filled with boxes," she remembers. “My first thought was, ‘Where am I going to live?’ And then, ‘How could my real estate agent not have checked about the title?’ ”

Because the owner and his sister were locked in a long-standing family feud, the close was in jeopardy. Adrienne tried to reason with the sister. “She wouldn’t even let the sale go through, put the money in escrow and fight about it later,” she says.

After she had to vacate her New York home, Adrienne scrambled to find a storage facility in Florida where she could store her belongings. Then she, her fiancé and her daughter, then 20, moved into a Florida hotel room on a month-to-month basis.

The experience was “a horrible inconvenience,” she recalls. Desperate for a home, she started the real estate hunt all over again, this time at a frantic pace. “We looked from sun up to sundown, to the point where we were frustrated and exhausted,” she remembers. “We easily saw 40 homes in the course of two weeks.”

Finally, after three more weeks passed, Adrienne happened to drive by a three-bedroom with a “For Sale by Owner” sign. She made an appointment to see it that night. Although smaller than the house she’d originally tried to buy, Adrienne loved the open floor plan and screened-in porch. She brought her daughter and fiancé back for a second look the following day, then made an offer that evening.

Thankfully, this time around the sale went through, and no one but the seller's name was on the title. Within a month Adrienne was unpacking the boxes she'd kept in storage in her new home.

Adrienne believes her real estate agent blew it by not checking the title. But she also feels that the homeowner’s quick agreement to a fast close was a red flag as well. The seller may have thought he could cash in on the house without the sister knowing or Adrienne discovering the truth.

“My advice to every home buyer is to do your homework,” she says. “Do [property] searches and look at tax records. See how much the broker knows and make sure they can give you answers.”

RELATED: 3 Things About Home Buying That Have Changed (for the Better!) Since You Last Bought

New-homeowner-Long-IslandLee Lubarsky, Long Island, New York
Home-Buying Surprise: After he landed a better job, his bank stalled his mortgage

In the spring of 2014, Lee, 35, and his wife, Lauren, 37, decided it was time to buy real estate. With a two-year-old son and a strong desire to have another child soon, they’d outgrown their two-bedroom apartment in Queens, New York, and were looking for something in the suburbs.

It didn’t take them long to find a cute, split-level three-bedroom in a prime school district on Long Island. At first, it seemed the purchase would be a breeze. Both spouses had steady jobs—he in public relations, she in a managerial position at Hofstra University School of Medicine.

Their credit was excellent, their debt-to-credit ratio was low and they were preapproved for over the house’s asking price. Two weeks after they first saw the house, they offered $420K, which was immediately accepted.

Then, a few weeks into the sale, Lee was offered a dream job with another public relations agency. “I didn’t think taking the new job would complicate things too much, given that I would be making more money,” he says. But when they notified their mortgage lender, the couple’s home closing was suddenly pushed back indefinitely. The lender said they wanted Lee to provide two months' worth of pay stubs before going forward.

“We had already submitted so much paperwork—like bank statements and explanations of deposits going back months—and the finish line was in sight,” says Lee.

Angered that they had to wait that long, the Lubarskys tried to negotiate with the lender. “We were given the option of making a larger down payment, which wasn’t possible, or looking into an FHA loan and mortgage insurance—an added cost we didn’t want to take on,” says Lee. As a result, they postponed hiring movers and rented their Queens apartment for two additional months.

Once their lender received proof that Lee had been with his new job for two full months, the mortgage went through, the papers were signed and the Lubarskys finally moved in. “People say buying a home is one of the most stressful experiences you’ll ever have, and for us it was,” Lee acknowledges. “But ours was absolutely worth the trouble.”

RELATED: Want to Buy Income Property? Here's What You Should Know

Nicki Lynn*, Kenmore, Washington
Home-Buying Surprise: Got outbid in a red-hot market

When Nicki, 28, and her husband, Cameron, toured a four-bedroom house in a suburban community just north of Seattle in January, they were sure they’d found their first home: It was on a quiet cul-de-sac, had a spacious yard and would be an easy commute into the city.

Problem was, they weren’t the only ones interested. While touring the home’s kitchen, Nicki counted almost 30 business cards left behind from real estate agents who had also shown it to clients—and the property had been listed for only 24 hours. To boost their odds, the Lynns made an offer that day. To stave off other house hunters, “we offered $40K more than the $495K asking price,” says the stay-at-home mom.

Considering Cameron’s steady job as a computer programmer, the couple’s good credit and the amount they had in savings in the bank, Nicki was confident the house would be theirs. Instead, she was informed that they were outbid—by an additional $40K.

“We were shocked,” recalls Nicki. “We weren't aware that we should offer top dollar right out front—we thought we would offer more than the asking price and negotiate to get a deal.”

Down but not out, they soon found another house that suited their needs with an asking price of $500K. But again, they were outbid—and this time, not only by dollar amount. “The offer that was accepted had no contingencies,” says Nicki, meaning that the buyers agreed not to have the home appraised privately. “And the owner was allowed to stay in the house and pay rent for a month after closing.”

Their real estate agent told them to expect this—suburban Seattle was a hot seller’s market then, thanks to a combination of a strong economy in a vibrant part of the U.S. and low housing inventory. If the Lynns wanted to buy a home, they had to be super flexible and act fast, she told them.

“Even asking the seller for time to do an inspection or get the house appraised on our own wouldn’t be possible," says Nicki.

Determined to be homeowners, Nicki and Cameron stepped back and rethought what they could spend. Months later they were walking through a three-bedroom split-level one Saturday afternoon and thought it was perfect. “That evening we put in a top-dollar offer and $20K earnest money to entice the owners,” says Nicki.

The offer was accepted. And when nearly two dozen (minor) red flags popped up during the home inspection—from a rusted-open chimney hamper to cracks in the driveway that needed filling—“we agreed to fix it all ourselves so nothing would happen to our offer,” Nicki admits.

Her advice to other first-time buyers? Know your market, act fast and don't get disillusioned. If you persevere, "it'll work out in the end, maybe even better than you had imagined," she says.

RELATED: The LearnVest Vocab Lesson: 8 Terms to Know Before You Buy Your First Home

*Name has been changed


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