http://blog.redfin.com/blog/2006/04/war_story_using_options_to_buy_a_house.html Redfin Corporate Blog Fri, 10 Feb 2012 02:35:37 +0000 hourly 1 http://wordpress.org/?v=3.0.1 http://blog.redfin.com/blog/2006/04/war_story_using_options_to_buy_a_house.html/comment-page-1#comment-73 Peter Fri, 05 May 2006 21:56:49 +0000 http://devblog.redfin.com/blog/2006/04/war_story_using_options_to_buy_a_house.html#comment-73 In 1998, I traveled to the Boston-area from California to find housing for my wife and I during grad school. On the school's intranet I found a post by a graduating student who wanted to sell her condo/townhome a few blocks away from campus. I stopped by the house unannounced, introduced myself and discovered over normal chit chat that the seller was coincidentially moving to our neighborhood in California after graduation, but didn't yet have housing in the uber-competitive bay area housing market. I asked about buying the Boston condo (it was perfect for us) hoping for an inside-deal, but the seller wisely said that the Boston market was as frothy as California and that she was planning on simply taking the highest price (and she had already engaged an agent) based on offers received the next day. She had had indications that at least 6 offers were forthcoming. My wife (who was back in California and hadn't seen the place) and I quickly determined we wanted condo, but couldn't afford a bidding war. Therefore, made an offer and we included a clause that obligated the buyer (us) to provide the seller 4 months free housing at the buyer's home in California. The risk we took is that the seller could've been an axe-murderer (we didn't know her at all other than my "drop-by" meeting the day before) or merely obnoxious as a four-month roommate. We also risked paying a few extra months of our California mortgage before selling, but that was far less than what we wouldn've needed to increase our bid to win the deal solely on price. The seller did in fact get 7 offers, most higher than ours, but we won the bid anyway because the seller was worried about her California housing situation and we solved that for her. And a month later we had a random stranger as a roommate for the entire summer. In 1998, I traveled to the Boston-area from California to find housing for my wife and I during grad school. On the school’s intranet I found a post by a graduating student who wanted to sell her condo/townhome a few blocks away from campus. I stopped by the house unannounced, introduced myself and discovered over normal chit chat that the seller was coincidentially moving to our neighborhood in California after graduation, but didn’t yet have housing in the uber-competitive bay area housing market. I asked about buying the Boston condo (it was perfect for us) hoping for an inside-deal, but the seller wisely said that the Boston market was as frothy as California and that she was planning on simply taking the highest price (and she had already engaged an agent) based on offers received the next day. She had had indications that at least 6 offers were forthcoming. My wife (who was back in California and hadn’t seen the place) and I quickly determined we wanted condo, but couldn’t afford a bidding war. Therefore, made an offer and we included a clause that obligated the buyer (us) to provide the seller 4 months free housing at the buyer’s home in California. The risk we took is that the seller could’ve been an axe-murderer (we didn’t know her at all other than my “drop-by” meeting the day before) or merely obnoxious as a four-month roommate. We also risked paying a few extra months of our California mortgage before selling, but that was far less than what we wouldn’ve needed to increase our bid to win the deal solely on price. The seller did in fact get 7 offers, most higher than ours, but we won the bid anyway because the seller was worried about her California housing situation and we solved that for her. And a month later we had a random stranger as a roommate for the entire summer.

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