No Compromising…Sort Of

Inspector

It occured to me while I was showing property over the weekend that maybe the best thing about this current market is the fact that buyers don’t have to compromise nearly as much as they used to. Fortunately, the old and wise rules about real estate investment have returned…and that’s a good thing! In the past 10 years or so, if you wrote down a list of the top 10 or 15 attributes you wanted in the purchase of a home you might have been lucky to have gotten 2 or 3 of them. People, quite literally, were buying homes they didn’t even like because they were so afraid that an escalating market would price them out. Now there’s something we haven’t seen in a while…choice!

Of course the pendulum has swung pretty far in the other direction right now and many buyers have talked themselves out of making an offer on places they liked because of relatively small, or eminently fixable problems discovered about the home they’re interested in. I heard a story recently about some buyers that backed out of a transaction because they discovered that the seller’s small child had scibbled on a wall with a crayon as they were doing their final walkthrough. It is funny to me, and certainly ironic, that many things that didn’t seem all that important a few years ago take on so much more meaning today. Buyers certainly inspect a home more thoroughly than they used to and there’s more soul searching discussion about moving forward too.

All this circumspection makes me think of a listing I had in Belmont in 2000. The seller, who had grown up in the home, was liquidating it following the death of her parents. Across the street was the back end of a shopping center and there was a ton of garbage, including an old mattress sitting near the loading docks. The house was in original condition and had a rotting front porch, rear deck and an attached storage shed that was literally falling apart. The worst part though was that the painstakingly honest seller had written in the disclosure that “sewage backs up into the house”. “Ummm…could you explain that?” I asked. Turns out the main sewer line for the City of Belmont ran right behind the back fence and when it rained heavily it got clogged up with debris and wouldn’t drain properly…and when that happened all that liquid backed up into the house, sometimes filling up the sinks and bathtub! This was a first for me as a listing agent. “What do you do?” I asked. “We call the city and they unclog it…usually takes 3 or 4 hours, no big deal” She said. 3 or 4 hours of sewage in your bathtub and sinks! It actually had a pretty easy fix but her family had gotten used to it…for 38 years! The moral of the story? We got 3 offers and it went over asking, As Is.

Do you know how grateful I am not to be getting that listing in July 2008! Folks, there’s no such thing as a perfect house so you’ll end up having to compromise on something…but I’m betting you won’t have to accept sewage in your new home in this market.

Comments

  1. Loved your story! The reluctance of buyers to purchase the “good deal” right now is a problem

  2. Jim, Love this! The buyers do expect everything to be new! Imagine this in New England?!

  3. Nice post. The only problem with buyers not having to settle is that they want to see everything on the market before they pull the trigger.

  4. I agree for buyers, its getting easier. but the salaries and wages have not gone up since 2000. only thing that went so high is home prices and gas prices and of course food costs. So all the easy money is gone now, people who has cash are buying. for people with traditional mortgages, prices has to come down by another 50%. if the sellers does not understand this, its going to take 5 to 10 years for wages to pickup and people will be able to afford. am talking about people here who are probably in top 3% and still can’t afford.

    So prices need to come down. i love patrick.net who said years ago.

  5. Jim Minkey says:

    Interesting about the patrick.net’s of the world. I don’t mean to sound old fartish but I’ve seen dozens of them going back to my college years when the Carter administration raised mortgage interest rates to 18%…we’ve weathered all that and values have still grown, and those patricks have been proven wrong. My Grandfather, actually, was a patrick. He never bought. Rented all his life because there was always something scary going on (Depression, WW1,WW2, Communism…etc) Ultimately he provided very well for his landlords family…and heirs. The families I know that had grandparents who invested in real estate have left the biggest legacies. Funny you mentioned gas and food prices Guru…do you think they’ll fall 50% too? If home values fall that much the 4 bedroom, wide waterfronts in Whaler’s will be selling for $750,000 again. If that happens I’ll have to hire 2 or 3 more assistants and a buyers agent or 2 because I won’t be able to contain the flood of buyer’s I’ll be working with. Guru, there’s a total of 565 properties for sale (both single family and condos/townhouses) in Belmont, Foster City, Redwood Shores, San Mateo, Burlingame and Redwood City. From studio condos at around $200,000 to single family up to $3mil. There’s close to 500,000 people living right now in those communities…seems pretty absorbable to me. This isn’t Stockton, or Sacramento or even San Jose. 565 properties isn’t that much. The qualified buyers are out there…they’re just nervously waiting.

    All I really know is what I personally experience…and that is that in the last 45 days I’ve had more qualified buyer clients come to me that I’ve put into my system and am now working with than I have since 2004 (you could be one too Guru…I’m never too busy for blog regulars!)

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