I spent a little time away from real estate in 2009. I felt fortunate that none of my clients needed to sell at such a low point in the market - thus locking in their losses in value. There wasn’t that much to do. It seemed silly to run around looking at property when I had no buyers. I put my toe in the short sale, foreclosure market and pulled it right back out again. It’s ugly out there.
When I started in real estate in the late nineties it was all anyone wanted to talk about. Every cocktail party, school event and athletic competition was a command performance. You needed to know the details of every sale in town. How many offers, how much above asking? How much had the sellers profited? Wide eyed with greed, homeowners tracked the market like sharks in a feeding frenzy. In those days I had five buyers at one time who all wanted to find a livable house in our town for less than three quarters of a million dollars. So did all the other agents. There were very few and not nearly enough for the demand.
I have had several clients who were relocating from other, less expensive areas. That first trip out, showing homes in their stated price range, is a shock to the system. Sticker shock. Expectations go down and price ranges go up and I get to use the expression that I save for these occasions. You’re not just buying a house. You’re buying a lifestyle. It’s not bullshit. It’s true. We have great weather, fantastic recreational opportunities and a short commute to the city. Unfortunately, you have to decide whether you want to live in a flood, mud slide or wildfire zone. There are very few homes here that don’t fit one of those descriptions.
Since I’ve jumped back in with a listing and buyers and meetings and broker tours and open houses, I’ve noticed something. People are a LOT nicer now. Listing agents will actually acknowledge you when you enter a house they’re holding open. I’m with a different, very user-friendly company and the other agents make a point of introducing themselves to me. It’s quite a change from the glory days when properties sold themselves and the imperious agent would hand out the Seller Wish List with instructions. Offers Tuesday at five, by fax only. If you were lucky you were given a lovely document called Multiple Invitation to Resubmit - meaning you (and all the other buyers) were getting a chance to make your offer better and be considered again.
It was so frustrating for buyers to be shopping for something and not know what it cost. The price wasn’t the price. It was just a starting point for the negotiations and the negotiations were not tilted toward the buyer. You stood an excellent chance if you were willing to bid one hundred thousand over asking and waive all contingencies. You’d have to show properties to buyers that were considerably below their price because it was assumed that the price would be bid up out of their pre-approved range. I even made an offer one time that said the buyers would pay ten thousand dollars more than any other legitimate offer. It too, was turned down because the listing agent felt it wasn’t a “real price.”
One wonderful buyer had a great thought on the subject. He said that buying a house was like trying to find a dress that both of you could wear, but they weren’t all gathered in one place. You had to go all over town to try them on. At one point he and his wife were so frustrated by the process that they started fighting in French at one of the many houses I showed them. I left for a little while until they’d calmed down. Ironically, on the day that they finally found the house they would buy, he was wearing a dress. A kilt.
For a long time listing agents could get away with murder. The market was doing all their work for them. They only had to do the bare minimum. There are some really good agents out there, but there are so many lazy, bad ones. Sometimes an agent wouldn’t even bother to respond to an offer. A written purchase contract with all the anguish over price, terms, conditions, and loan pre-approval that it implies. Not even a call to say they’d taken another offer. I once found out my buyers didn’t get the house because the day after we presented the offer I saw the status was changed on the computer.
There is a local agent who was representing a gay couple. My buyers were in contract on the house and we were going through negotiations about repair items. The men, who had been incredible contributors to the community, were selling the house because one of them was dying of cancer and they needed to simplify their lives. Their agent said something to me like. “Oh you know how it is with these old fags, just sitting there counting their money and taking it ...” Excuse me? Fortunately this paragon of fiduciary duty had a business partner (a gay man, mind you) and I only dealt with him for the remainder of the transaction. And yes, this wonderful woman is still doing business in our town.
Lately I’ve been thinking about a family I represented in 2002. They had rented their condo in a low income area for fourteen years when it went on the market. The guy was a painter and the contractor he worked for was a client of mine who called and asked if I could help out. Somehow, we put a deal together and they were able to buy their place. They didn’t speak English and everything had to be translated, but I knew I liked them and I was happy to be part of the process. It was the American dream. I’ve often wondered how they fared in this economy and now I know. They didn’t. I looked their property up on the tax records and their place was sold by the bank in December for less than half what they paid for it. They just couldn’t hang on.
The sad thing about today’s market is that much of the action is in the low end, short sale and foreclosure niche. The prices have gotten so low now that properties are selling for half of what they were purchased for and there is another feeding frenzy. It’s depressing to look at homes that people have abandoned or been forced from, but if you can stomach it there are some real deals. And multiple offers and properties going for over asking AND agents who can’t be bothered to respond to an offer. It’s common to see a remark in the description warning that the property probably won’t qualify for any type of loan. Cash has always been King, but now it’s Queen and Jack too and not just on the low end. One of our local movie stars is getting divorced and just sold his house for eight million. Cash. It must have been a little disappointing because he was asking ten.
No comments:
Post a Comment