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Buying a stressful home business – Chicago Tribune

David Jaggers left his job in Columbus, Ohio in January 2021 for the Chicago area without worrying about buying a new home.

Jaggers had moved five times in the previous 20 years while rising through the ranks in the corrugated box industry.

He and his wife Shannon were familiar with the drill.

Sell ​​your house, pack your things and let the moving truck do its thing. Then settle down after buying a house.

Jaggers landed a job as general manager at Hood Container, which is close to Midway Airport. His company rented him an apartment for the first eight months.

By this time, Jaggers was aware of soaring prices and the exhaustion of housing supply.

Jaggers had no idea how hard it was to buy a house until he started looking. In fact, the market was so ruthless and treacherous that he didn’t buy any.

After being rejected for the sixth time for a bid submitted above the asking price, Jaggers decided to build.

The Jaggers family moved into their new home last February after opening their five-bedroom, 3,200-square-foot home in November. The house went for $532,000, which was cheaper than some of the houses he had bid on.

“I’m just frustrated,” he said. “I ran out of time. I had to extend my lease for eight months. We had spoken to three builders and we just decided that was the best way to go.

There are hundreds of stories like Jaggers’ across the country. Nor does the market discriminate between prices.

Ericiona and Monte Gates of Hobart began looking for a home in the $200,000 range in July 2020, three months into the pandemic but at the start of the sellers’ market.

The Gates made offers on six or seven homes in Valparaiso, Crown Point, Hobart and Portage, they said, before turning to Plan B. Plan B was buying Monte’s childhood home from his mother in Hobart.

As first-time home buyers, Monte and Ericiona were overwhelmed by the process. Their initial offer was for a house in Crown Point.

“We were excited,” she said. “We were also very naive about the process. We just assumed it was going to be accepted.

They were beaten on this home by a cash offer from a buyer who waived the inspection. Their most crushing day came when they made an offer for a house in Portage. One of the owners of the house wanted to accept the offer, but when she called her husband, he said not to accept it.

The Gates used funding from the Federal Housing Authority (FHA).

An FHA loan requires more review and paperwork than a conventional loan. The couple accepted a similar offer using a conventional loan.

“That was the one that was really frustrating,” Monte said. “The other real estate agent had informed our real estate agent that he was going to accept our offer.”

Says Ericiona: “We were right in the middle of the party and it was ripped from us.”

Their story has a happy ending. Monte’s mother was building a house in St. John. She ended up selling them her house in Hobart for a little below market value.

Monte said the learning curve was steep. They went from offering for the asking price to offerings that were $10,000 above the asking price. He said using an FHA loan puts them at a disadvantage.

“Making an offer for the asking price was considered an understatement,” Monte said. “People would come from Illinois and start with bids $20,000 above the asking price and then wave inspections.”

Ericiona said now was the perfect time to get their Hobart home.

“It was perfect for us,” Ericiona said. “When we started looking, she wasn’t ready to move yet. It was not an option for us. It just happened when we were looking for a house.

For the Jaggers, resources were not the issue.

He got a seat at the table. He said he and Shannon visited about 200 homes. They were looking in St. John, Crown Point and Schererville in Indiana, and Plainfield, Aurora and Naperville in Illinois.

He would start with offers at least $20,000 above the asking price. Jaggers went up to $40,000 over the list price for a house he loved in Plainfield.

He sometimes dropped what he was doing to run around and look at a house that had just come on the market.

The process was always the same.

Jaggers was bidding on a home about a day after listing. Buyers would have a deadline for offers.

And then it was over.

He never heard of any of his offers.

“I never had to negotiate,” he said. “I never had to say, ‘Hey, I’m not going anymore. I think someone would come and say they would pay $25,000 more than the final bid.

The good news is that a seller-biased market is beginning to tip towards a normal equilibrium.

According to the Greater Northwest Indiana Association of Realtors (GNIAR), 970 single-family homes were sold in June, down 13% from June 2021. Additionally, inventory is currently in 40-day supply, according to GNIAR.

Chuck Vander Stelt, a local real estate agent, said 60 Days of Inventory is market neutral, meaning it favors neither the seller nor the buyer. A year ago, inventory supply was 21 days. The price jump from June 2021 to 2022 was 7%, but it was 23% from March 2021 to March 2022.

Vander Stelt called last summer’s attempt to sell a house a “circus” that typically lasted 72 hours.

“These are agents trying to get the buyer into the house and then get that written offer through,” he said. “And then the agents sift through five, 10 and 15 offers. I’m sure there were sellers who had 20 or 25 offers.

Jason Utesch, a real estate agent from Valparaiso, said the market was unusual now. One of his clients bought a house at 8% less than the asking price and the offer was conditional on the sale of their house, while two other clients were stuck in bidding wars, which does not look like not at all like last year.

“It’s unpredictable,” he said. “Marginal households are struggling a bit.”

Rising mortgage rates and inflationary pressures dampened the buying frenzy. Interest rates for a conventional 30-year mortgage are around 6%, about double what they were a year ago.

For the Jaggers, it finally worked out well after going through some anxious times. They hired a custom builder who was not doing custom construction at the time. The builder was too busy, so they streamlined the options. Doing it in four months was key.

“We were lucky to get what we got, but it was crazy,” Jaggers said.

Mike Hutton is a freelance columnist for the Post-Tribune.