Just a Tad Confusing

I often have to laugh anymore when I contemplate the overall attitude difference between buyers in this current market vs buyers just a few years ago. Unless I’ve become completely wacky and out of touch, I really don’t think there’s been any significant change in human genetics that’s made folks a whole lot different in 2010 than they were in 2004…but sometimes I think that could be the case. What I mean by this is the entirely different approach and perspective that home buyers have now. They didn’t have these points of view awhile ago. In 2004 I saw multiple offers on houses with gapingholes in roofs, foundations that literally had fallen over, unsafe exposed wiring, mold that was so thick it felt like shag carpet as well as houses with $30,000 in dry rot. I saw homes on Edgewater and Hillsdale get multiple offers for crying out loud! For years there didn’t seem to be any problem significant enough to prevent a home from selling!

These multiple offers I’m talking about were not written under the asking price. They all went way over asking during those years. It was a frenzy…nobody cared about anything! they just wanted a house! Preferably with 4 walls and a roof. If it didn’t leak that was a plus. I sold a house in Palo Alto without a foundation! It was wood frame built right on the ground circa 1900. $40,000 in dry rot. The buyer didn’t care. He hoisted it up and put a foundation under it. No big deal. I sold a house in Belmont that raw sewage backflowed into the house during heavy rain storms and filled up the tub and sinks. The sellers never fixed it…they had lived with it this way for 35 years. They just disclosed it when they sold. I got 4 offers on that place, “As Is” and over asking.

It’s 2010 though. In this year alone I’ve seen buyers not buy houses because of cracked entry tiles, a cracked stove top, worn or scuffed hardwood floors and power lines that are 3 blocks away. I had a buyer back out of a contract because it was discovered that there are cracks…in the street! Yet another buyer backed out because it was discovered that the neighbor had a dog. There wasn’t an issue with barking…they just had a dog. Next door. Honestly, I have an escrow currently where the buyer requested the seller replace a burned out light bulb! I heard a story about some buyers who refused to go through with a transaction because, during their walk through, they discovered that the sellers child had scribbled on a wall with a marker. They didn’t ask for it to be remedied…they backed out!

Maybe it sounds like I’m whining or complaining. I don’t think I am…I’m simply fascinated by human nature. How can people not care at all about a house without a foundation or one with running sewage, yet just a few years later other folks freak out about cracks in the street? What a business! It really is amazing.

Comments

  1. Very simple. The 2004 buyer had dollar signs in their eyes. Why care about the “worth” of the house when house prices could only go up? Heck, the house was making more money per year than the wage earner of the household!

    Fast forward to 2010, buyers are looking at the prospect of falling or (for the more optimistic) flat prices for quite sometime.. the attitude is why buy a house with a cracked floor or a dog next door, when you can buy one next year (without these issues), maybe at an even lower price? Add to that the prospect of job insecurity/high unemployment/potentially higher taxes and there you have it.

  2. Jim Minkey says:

    I wish it was that simple AR, but I don’t think so. First of all, I sold alot of houses in 2004 and I didn’t work with anybody that had that “dollar signs in their eyes” mentality. I bought myself in 2004 and the biggest thing in my mind was the fear that since I just bought the bottom is undoubtedly near! That was a common response back then. You buy and the market will collapse…just cuase that’s always been my luck. Seriously, I didn’t represent anybody who felt like they were getting in at the bottom and they were going to reap vast rewards. People overlooked problems because they just wanted to buy a home…they didn’t care about the issues. Our house in 2004 had a foundation crack, an original furnace, damaged ductwork, and a roof at the end of it’s lifespan. We didn’t care at all…we loved the location and wanted the house. We paid $90,000 over asking in a mutiple offer environment. I NEVER thought we had just gotten aboard the money gravy train. For what it’s worth, there’s no doubt in my mind that it’s worth at least 100k more than we paid for it in 2004.

    As for 2010, I’ll just say it plainly…if you back out of a deal over a cracked floor tile or marker on the walls you’re a complete idiot. $100.00 worth of work is too much for you? You payed more than that for the appraisal or inspections! Wait for the perfect house? Hello! It doesn’t exist. OK, you find a house who’s neighbors don’t have pets…and then six months later they decide that having a dog might be a nice thing. No buyer can control things like that…EVER! If there’s one thing I’ve learned about this market it’s that it’s astonishingly stabile. The odds heavily favor stabilty as a long term trend here too. Backing out of deals over a few hundred dollars worth of problems makes no sense at all.

  3. Frances Rokicki says:

    I agree, Jim. With the lowest interest rates in over 30 years, you would think that it would be a homebuying frenzy out there! Most people are so caught up in the bad news about the politicians, that they don’t realize that this is the best time to buy property, ever! I can’t remember a period, in my 25 years as a Realtor, that the housing prices and the interest rates were both so low, at the same time.

    When the market turns, and it will again, I think that the most common phrase will be, Geez, I wish we had purchased a home in 2010 and 2011! For those folks who did purchase, they will be thrilled that they made the move when they did:)

  4. Carol Letcher says:

    Hi Jim, yes I agree…I started out in 1979 in the mtg business, rates got as high as 17 1/2% and then when I got my license in 1991, rates were hovering around 9%. Rates haven’t been this low in 50 years, absolutely incredible rates with rock bottom home prices. This is A GREAT TIME to purchase a home, let’s just keep educating our sphere to let them know. I think buyers right now think because most areas are experiencing a strong buyer’s market that they can make ridiculous demands. It’s tought out there, just keep grinding away!

  5. I completely agree with you Jim. It just doesn’t make sense that for a few hundreds or even couple of thousand repair will scare the hell out of these buyers when in fact, they are spending hundreds thousands of dollars to buy a home…just plain idiotic. No house will ever be in that “perfect” state since we, as individuals, have our own perception of things. Instead of seeing these flaws as a big deal breaker, it should be seen as…well, now I can change that tile into something much better! In this scary life, people tend to look at glasses always half empty instead of half full….I guess that is human nature.

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