Despite their strong buyer profile, first-time homebuyers Ben and Dani Graf had to go all-in to compete in a relentless seller's market.
On paper, Ben and Dani Graf were about as strong as first-time homebuyers can be.
After selling a condo they had inherited from a family member and lived in for nearly five years, the Grafs had enough savings for a down payment on a $500,000 house -- clearing the largest hurdle for first-time homebuyers,
Their budget left a chunk of cash aside for home improvement projects and a buffer for emergency expenses. They also had the luxury of living with Ben’s parents while they searched, relieving the pressure of finding a home as soon as their condo sold.
But record high prices in a lightning fast market turned their dream of homeownership into something of a nightmare.
Now, a year after the journey began, they’re still living with Ben’s parents and spending nights and weekends clearing out mold and rat residue from a house they went $65,000 over budget to buy.
While the Graf’s story is unique, it’s also part of a larger trend of homebuyers going to extreme lengths to compete in a record-setting national housing market that pits buyers against each other and gives every advantage to sellers.
“No power as a buyer”
With a flexible time frame and a sizeable nest egg, the Grafs believed they were in good shape to buy a house, and their real estate agent agreed.
In a perfect world, their new home would be 2,000-2,500 square feet on a couple of acres of land. But in their target area of Duvall, WA -- a city of less than 10,000 people 25 miles northeast of Seattle -- homes with these specifications list for upwards of $800,000 and only last a few days on the market before receiving multiple offers over the asking price.
So, the first-time homebuyers got more flexible on their budget and wish list. But even after making compromises, the home search wasn’t turning up any results.
“As soon as we saw something, we had to be there the next day or two,” Ben said. “We would have a listing sent from the agent, and she was trying to schedule a showing the same day. Even still, it would sometimes be gone before we could see it, or it was too junky, not worth the asking price, or more work than we bargained for.”
According to Redfin, the median days on market for homes in the Seattle metro area is currently 5.2, almost a third of the national median of 14.7 -- which is at a record low after dropping from 32 days at the beginning of the 2021.
The Grafs searched for nearly 8 months while living in Duvall with Ben’s parents. Even with the advantage of close proximity and at-ready baby sitters for their kids, they just couldn’t find a foothold in the market.
They made several offers on houses, offering tens of thousands beyond their $500,000 budget, and would still get outbid, leading to periods of discouragement and depression.
“The offering process was so strict and seller-friendly,” Dani said. “We pulled out all the stops and contingencies to make our offer as pretty as possible -- felt like we had no leverage and no power as a buyer.”
At one point, they considered buying a chunk of land and building a home to get around the existing home market. They even saw a few properties. However, the $300,000 price tag for a half-acre of land without a house just wasn’t feasible for their budget.
Then in February, a listing popped up on Zillow for a 1,000-square-foot house on a half-acre of land just 5 minutes away from Ben’s parent’s house. Although it clearly needed some work and didn’t check all of their boxes, the Grafs decided to check it out.
“Honestly, we were pretty desperate at this point,” Ben said.
“We didn’t want to offer that much”
Despite knowing they would need some cash for renovation, the Grafs submitted an offer for $565,000 -- as high as they could go.
“In the back of our minds we know this house is hardly worth that much, but that’s where the market puts it,” Dani said. “It felt like we didn’t want to offer that much, but felt like we had to.”
Even after going well over budget, the Grafs still had cash set aside to redo the flooring and paint. However, the renovation project turned out much larger than expected.
“The owners had done a good job of putting a pretty face on it,” Ben said.
The Grafs started by tearing up the flooring, only to find more layers of flooring. Pulling up several more layers revealed mold, an abundance of rat droppings, and an unlevel subfloor. Soon, much of the house was stripped down to its studs and joists.
The bare bones revealed the need for some new joists, all-new plumbing, and some electrical work -- much more than they had expected and saved for.
Fortunately, Ben’s dad works in residential construction and has been doing much of the renovation work himself, saving the Grafs a substantial amount of money on paying contractors.
Even so, the Grafs have already maxed out the cash they set aside for renovations, and still have a roof to replace -- hopefully before the notoriously rainy Seattle winter arrives.
“We’re just waiting to save up a little more before we can finish that,” Ben said.
“We’re still happy we bought”
Four months in, the renovation has been longer and more demanding than the Grafs had hoped for. However, Ben said they are finally seeing a light at the end of the tunnel.
“The light being able to live in the house -- you know with stuff on the floor, appliances hooked up, a place to store and cook food,” Ben said. “We’re getting close to that livable point, and then we still have a ways to go until it’s really ours.”
And the Grafs consider themselves lucky they were able to buy at all. Having a place to stay and a family member to lead the renovation project allowed them to buy the level of fixer-upper they did -- even if it was over their budget.
“We’re still happy we bought,” Ben said. “And we’re definitely ready to stick around for a while and let the value increase.”
The Grafs journey proves that homebuying is not for the faint of heart -- especially in blazing-hot markets like the Seattle metro area. But patience, determination, and willingness to put in the extra work are often rewarded.
For the Grafs, validation comes in the form of a recently renovated 1,100 square foot house recently sold in Duvall for $630,000, which makes their $565,000 fixer-upper look like a bargain with potential for instant equity.
For first-time homebuyers who really want it and are creative, homebuying can still make sense even in the craziest markets.
All photos courtesy of the Graf family.