‘Extraordinary measures.’ Tri-Cities home buyers offered new way to win bidding wars

Tri-Cities home seekers trying to land a house by making offers the “old-school way” are finding nearly no chance at success.

Offers contingent on a sale of a home? Nope. Offers contingent on financing? Better think twice.

“In this day and age, that isn’t going to fly,” said Dave Retter, the owner of Sotheby’s International Retter & Co. “This is by far the hardest time to buy a home in 42 years of doing this.”

So, Retter is doing something that he’s never been done for clients — partially financing their new homes by making their interest payments.

“Sometimes it takes extraordinary measures,” he told the Herald.

It’s common now for homebuyers to offer well above the asking price of a home — cash offers with few contingencies are the golden ticket to getting that house.

“You have to be ready to move when just the right home comes up,” Retter said.

That’s because the housing market in the Tri-Cities is just getting worse — for buyers anyway.

In May, houses were only on the market for a median time of three days.

No. 2 for retirement

Kiplinger ranked Richland No. 2 in the nation to retire among small cities — bringing in those who may have cash to offer and don’t have to worry about first selling their home.

Kiplinger pointed out that retirees from Seattle who have sold a home there can often pay cash to get a home in Richland for significantly less.

While those in Tri-Cities may be experiencing sticker shock, it’s a bargain for those who want to move closer to family in western Washington but don’t want to pay Seattle prices.

The median price of a single-family home in the Tri-Cities market jumped 23% in the past year to $389,000 in May.

Buyers who bought a house in April saved themselves $32,000 more than if they had waited a month.

“I got really frustrated — buyers were getting frustrated,” Retter said. “If they look at enough homes and keep getting turned down, they will quit looking for a house.”

Bridge loans

To give clients a fighting chance and keep the phones ringing, Retter devised an agreement with HAPO Community Credit Union to give buyers a stop gap to free up cash.

Retter’s company will back a clients’ bridge loan and pay the interest on that loan for up to a year until the client’s home sells.

A bridge loan is a short-term loan that pays off a house before it sells.

The HAPO bridge loan will offer up to 80% of a home’s value.

Once the existing loan is paid off, buyers have cash in hand that they wouldn’t have had otherwise until their home sells have for a down payment or more earnest money.

With Sotheby’s paying the interest on the bridge loan, it literally buys home seekers a greater opportunity to find a dream home.

For example, if someone has a home that’s worth $350,000, they could get a bridge loan for $280,000.

Once the original loan is paid, the buyers now have what remains as cash in hand to make a purchase without worrying about being tied down by a sale.

“The reason I am doing that is that Realtors have skin the game, and this says, ‘I’m willing to go in with you.’ “ Retter said.

This story was originally published July 12, 2021 at 5:00 AM.