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Very true. FHA loans let you put as little down as 3.5% for first time buyers. I wouldn’t recommend it but the opportunity is there.

seattle_spring 5y ago
FHA loans in a competitive market put the buyer at an extreme disadvantage versus conventional or cash.
- asdff 5y ago
  You still hear of people in these markets snagging homes for like 5% down even with the competition. Maybe I misunderstand, but you don't pay any realtor any money until you buy the home. Seems that there isn't any pain being 'in the market' continually getting out offered 99 times out of 100, if it means you get an offer that one time and are going to be renting anyway until then. Plus the whole time you are presumably saving more money and coming up with a stronger down payment.
  - kube-system 5y ago
    Yes, but if you make an offer contingent on bank financing, and someone else makes an offer contingent on nothing, which offer would you choose as a seller? Guaranteed money now? or probably getting money after the bank completes their paperwork? Many people selling a home already have another home somewhere else, and they're not interested in keeping around another empty house to make payments on.
    - asdff 5y ago
      Not all offers are going to be all cash. People still buy homes putting down 5% or less in these hot markets, even if its not as common.
      - kube-system 5y ago
        For sure, I'm just expanding on why it might be smart not to. I bought in a buyers market and still opted to put down as much as I could, rather than as much as I was required, so that I could have a better chance to get my 1st favorite pick. I personally wouldn't want to be in the position to settle on my 15th(+) favorite house. There's a lot of people being forced to make a lot of compromises right now -- will they be happy with their decisions years from now?
        asdff 5y ago
        For a lot of people, the thinking is years from now they will walk out with enough equity and gain to put a down payment on what they want without compromises. Hardly anyone gets everything they want in a first house.
    - mindslight 5y ago
      Even if you're financing, you don't have to make your offer contingent on financing. It puts your deposit at risk, but it might be easier than finding a seller who will accept that risk.

seattle_spring 5y ago

FHA loans in a competitive market put the buyer at an extreme disadvantage versus conventional or cash.

asdff 5y ago
You still hear of people in these markets snagging homes for like 5% down even with the competition. Maybe I misunderstand, but you don't pay any realtor any money until you buy the home. Seems that there isn't any pain being 'in the market' continually getting out offered 99 times out of 100, if it means you get an offer that one time and are going to be renting anyway until then. Plus the whole time you are presumably saving more money and coming up with a stronger down payment.
- kube-system 5y ago
  Yes, but if you make an offer contingent on bank financing, and someone else makes an offer contingent on nothing, which offer would you choose as a seller? Guaranteed money now? or probably getting money after the bank completes their paperwork? Many people selling a home already have another home somewhere else, and they're not interested in keeping around another empty house to make payments on.
  - asdff 5y ago
    Not all offers are going to be all cash. People still buy homes putting down 5% or less in these hot markets, even if its not as common.
    - kube-system 5y ago
      For sure, I'm just expanding on why it might be smart not to. I bought in a buyers market and still opted to put down as much as I could, rather than as much as I was required, so that I could have a better chance to get my 1st favorite pick. I personally wouldn't want to be in the position to settle on my 15th(+) favorite house. There's a lot of people being forced to make a lot of compromises right now -- will they be happy with their decisions years from now?
      - asdff 5y ago
        For a lot of people, the thinking is years from now they will walk out with enough equity and gain to put a down payment on what they want without compromises. Hardly anyone gets everything they want in a first house.
  - mindslight 5y ago
    Even if you're financing, you don't have to make your offer contingent on financing. It puts your deposit at risk, but it might be easier than finding a seller who will accept that risk.