A local Realtor in Raleigh, NC captured the competitiveness of the area on camera. In the video, you can see a line of cars stretching the whole street waiting to see the home. The listing was a home in the 27616 zip code for under $300k. Raleigh has an average sales price of about $470k right now.
Any home under $500k in Raleigh tends to have great competition. But when you look at homes under the $300k mark, it is an absolute frenzy. This price point is among the most competitive in the area. You will see a lot of first-time home buyers and investors battling it out for homes under $300k.
The lack of inventory for first-time homebuyers is causing issues though. Many first-time homeowners are having to extend their search outside of Raleigh. If you do find a home in Raleigh, you likely will have to offer well over the list price to win. But doing so also only continues to increase the prices in the area.
Many buyers are also waiving inspections and appraisals as well. Waiving your inspection means that you either will not get an inspection or will not ask for any repairs. Sellers are typically not making repairs right now anyway though. But this is causing a lot of buyer's remorse! A large percentage of buyers wish they never waived the inspection because of the problem they have found.
Waiving the appraisal is also a very risky move. But doing so increases your chance of winning exponentially. Waiving your appraisal means that you are willing to cover any gap that occurs with a low appraisal. So if you purchase a home for $350k, then it appraises for $340k, you will need to cover the $10k gap. This is also known as the "appraisal gap".
We are starting to see gaps in appraisals happen a lot more. As people continue to offer higher and higher for homes, the gaps are getting larger and larger too. But buyers are still offering to cover any gap that may happen with the appraisal to win. Buyers aren't willing to back out and lose their due diligence fee over the appraisal gap either.
Whatever you decide to do, it is best to have a trusted advisor on your side. You do not want to navigate this crazy market by yourself. If you'd like to weigh your options and find the best way to get into a home, feel free to reach out!