Aw, come on, if you haven't already, get in your car and drive down to the nearest open houses today. New condo tower? Sweet. New tract home development? You're there!
Ask the realtor or whatever the hack is called who sits in the shed how things are going, if they think buying now is a good investment, and if they'd put their own money into a unit.
Ask them if they think we're in a bubble. Ask them what their cancellation and deposit policies are. Ask them what happens if the unit is worth less than it is today when you have to close.
And then of course, report back. Damn, I'd be having fun with this back in the States...
Have fun - happy memorial day (or "bank holiday" here in jolly ol' England).
May 29, 2006
Anyone visiting open houses just for fun this memorial day?
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22 comments:
Sean Corrigan is Chief Investment Strategist at Diapason Commodities Management
Buying Gold?
In such a world, it is likely to be the case that people will, from time to time, seek to acquire GOLD a holding of a relatively scarce, high value-by-weight, easily fungible, liquid, storable, real asset as an alternative to their holdings of a much less scarce, eroding value paper asset, such as comprises today's money.
This kind of dread and defensiveness explains at least part of the metal's rising price, it is hardly a cause for universal rejoicing. For, though it is understandable that gold's long-suffering believers now feel gloriously vindicated, we must temper our present glee with the thought that the rally being enjoyed may be no more than a waypoint on our road to a self-imposed and wholly unnecessary ruin.
I had a realtor drive my wife and me around all day yesterday to look at open houses. I was surprised at the number of homes with the AC turned off, swealteringly hot and filled with bad smells. Anyway, looking at anything under 300k. Quite a lot to choose from in my area. Saw some desperate homeowners with signs saying they are willing to chip in to closing costs and "willing to negotiate". Smells like desperation.
Meanwhile, these prices are still hovering around $100k more than two years ago, so no real bargains unless you buy into the idea of a "return to a rational market" with minimum 5% gains per year.
Saw evidence of some price "fixing" going on with six homes for sale all within two blocks of each other, all listed within $5k of each other around $275k. They must be upset at the one lowball figure of $245k, 30k less than anyone else!
Anyway, my wife and I are desperate to get into a place, but unwilling to kill ourselves financially as we don't own a home now but buying one of these would soak up about $1600 per month of our take home vs renting.
And that's the reality. Buy now and live in a great place with no disposable income and no ability to cope with any sort of financial stress hoping beyond hope that prices continue to rise and we can ride through the downturn -or- continue to rent and put away over a grand per month in the bank with little or no effort.
A final note. More than one of our sons' friends has commented that "your parents must be rich" because as an only child, he pretty much gets whatever he wants. Xbox's, 360s, IPods etc. Why should we deny him some of the finer things? Easily affordable for us as we pile up cash every month. This indicates to me that there are many people out there who are barely making it, just to hold the honor of being a homeowner (read mortgage borrower).
>> Xbox's, 360s, IPods etc. Why should we deny him some of the finer things?
THOSE are "finer" things? Take some of your cash and see if you can buy some "class."
Lol!, well, the finer things if you are a 15 year old I mean.
BTW, Loudoun county VA which this article is about was the fastest growing region in the US last year. The higher the price, the bigger the fall.
Another comment,
My realtor suggested we not offer any lowball figures as he says the seller would just hand the paperwork right back with a big fat "no" and then be much harder to deal with going forward.
Xbox's, 360s, IPods etc. Why should we deny him some of the finer things?
- how about these finer things: books, symphony tickets, a baseball bat, travel across america and more books
your kids will grow up stupid, fat and ignorant. Fox news viewers.
and don't buy the house for the love of god!
We all want to give our children things that make them happy but most of what you're giving him/her is just "future trash." Not to mention the idea of materialism.
My realtor suggested we not offer any lowball figures as he says the seller would just hand the paperwork right back with a big fat "no" and then be much harder to deal with going forward.
Yes, for an individual seller you just described, that could certainly happen, but since there are thousands upon thousands of sellers out there, someone out there will not be offended and will at least be willing to counteroffer.
In the end, the realtor wants to get it over with, get you into a home, and get on with his/her life. Your future is much more important than your realtor's whims.
FYI, one of the Loudoun County zip codes has the highest number of properties for sale of any zip code in the entire DC area.
“asdf said...
My realtor suggested we not offer any lowball figures as he says the seller would just hand the paperwork right back with a big fat "no" and then be much harder to deal with going forward”
Find another realtor. Immediately. The buyer sets the value of a home, not the realtor, not the seller. Basically, the realtor is saying that the “deal won’t go forward” unless I get my commission padded.
It cost you nothing to place an offer. Find out how long the house has been on the market. Make the lowball offer. If your offer is not accepted, what have you lost? If the home is still on the market a month from now, take 10% off your lowball and offer again.
I’ve seen one particular home in my area go from $370K to $320K in a few months. So, a few months ago at $370K, if I’d made an offer of $320K, would that have been a lowball? In a realtor eyes “$50K off the asking price, you’re not being realistic blah, blah, blah, blah.” Well, here we are a few months later, $320K. I’m going to wait a week then make an offer.
I went to six Open Houses in my area this weekend. My family moved to a retirement destination area of Arizona, where extremely wealthy second-home "investors" have driven up the home prices to obscene levels over the last 5 years.
Some friends of ours have been told that their home, bought for $150,000 5 years ago is now easily worth $250-$275,000. They would like to cash out their equity and pay off some other debts, but they would have to pay over $350,000 to get a larger home. I told them to stay put, save the commission & moving expenses, and wait this craziness out. In another nicer neighborhood, sellers are asking $400,000 for a home they bought 3-4 years ago for $200-$250,000. Home prices have gotten so inflated that the average two worker family can only afford a nice manufactured home on a postage stamp-size lot, unless they want to commute over an hour a day.
The five realtors I spoke to were absolutely giddy about how expensive homes have become and quoted selective statistics about how the home they were standing in was way underpriced (at $400,000 to $550,000) compared to the neighbors'. There are currently 750 realtors in our area with only 1050 homes listed as available or pending in the MLS. That's a sign of the beginning of the end, IMHO.
I asked one realtor if he thought that the bursting bubbles in Phoenix or California would eventually lower the home prices here and he gave me the standard spiel about running out of space and having pages of names of potential buyers (I didn't ask what price they were looking to buy at). In all, I was urged to buy as soon as possible because the home I was in could go up in price by next week and the supply would go way down later in the summer. They also didn't see any problem with a one-income household, making under $100,000 a year, being able to buy a half-million dollar home. They only convinced me to keep renting!
"I was urged to buy as soon as possible because the home I was in could go up in price by next week and the supply would go way down later in the summer"
wow - that's corrupt. but hey, thats realtors. just sluts for the commission, and forget the truth.
I have not visited any open houses for fun. But I did come across a new hilarious term to describe the national real estate market by an industry spin doctor.
Dry Dock Market = "a season between two booms."
http://houstonrealtor.har.com/DispArticle.cfm?ARTICLE_ID=14262
The article has some great lines, including:
"For 2006 average appreciation is predicted to be a mere 5.8%"
"The industry may also find that mortgage fraud became an epidemic during the last boom."
May?
I think the dock may be especially dry here in arid metro Phoenix.
My realtor suggested we not offer any lowball figures as he says the seller would just hand the paperwork right back with a big fat "no" and then be much harder to deal with going forward.
Your #1 BIG MISTAGE. Thinking that you have a realtor. All realtor's get paid a commission at closing out of the seller's proceeds.
SOLUTION for buyers interested in MLS properties:
Surf realtor.com make a list of properties that you want to see.
Call each realtor who listed the property to see it. When they find out that you don't have a realtor representing you, they will allways try to become your buyers agent. Be hard and firm. Say I'm only interested in looking at the 1 property you listed.
Visit the property. If you want to make a low-ball offer. Get two business cards of the listing agent. Write your lowball number on the back of both cards, the date & time. Put 1 card in your purse/wallet & hand the other to the agent and tell them to write up a purchase contract for the amount listed on the back. If they refuse. Remind the agent that they have a legal obligation to present all offers to the sellers. If they still refuse, tell the Agent that they are breaching their contractual obligations with the seller; and that you can approch the seller with your attorney to cut the agent out of the deal entirely.
Say this in a firm tone of voice while looking the agent in the eyes. Say nothing else.
Either they write the offer or you call your real estate attorney.
I will tell you from personall experience 80% of the time that they will write the offer and present it.
In 1973, My attorney sucessfully cut a 15% broker commission out of a commericial deal; which the seller and my company split.
I ran into this agent a few years later at a nice restraunt and he saw me sitting accross the room and got up and walked out before his dinner was served. :)
Lesson: Why pushed... shove back!
W
Lesson: When pushed... shove back!
great advice from robert and anon. "w"
..."they have a legal obligation to present all offers to the sellers".
I always thought you should be able to go see a house and tell the realtor you are representing yourself and the other ½ of their commission should come off the price too - they should pocket the whole 5-6% b/c you aren't using an agent.
I was working w/ an agent who was only sending me homes “in my price range”. I started looking on my own and figured if I wait the market out a bit, the prices may come down and with a low ball offer, I could be up another 100k in price range.
jr
Thanks for all the advice everyone!
So far my wife and I have looked at around 30 homes in the past month. NONE have sold, three have dropped the asking price. Our shortlist is around four homes that are in our price range and we would be happy to live in.
Here's the bargain of the week...
http://www.realtor.com/FindHome/HomeListing.asp?snum=1&locallnk=yes&frm=byzip&mnbed=3&mnbath=0&mnprice=0&mxprice=300000&js=off&pgnum=1&fid=so&stype=&mnsqft=&mls=xmls&areaid=23188&poe=realtor&zp=23188&sbint=&vtsort=&sorttype=&typ=1&typ=2&typ=4&x=87&y=4&sid=06B2CDB47118C&snumxlid=1056503183&lnksrc=00002
"your kids will grow up stupid, fat and ignorant. Fox news viewers."
More likely scenario: they turn out to be lazy idiots who watch CBS "News" and read NY Times and believe that forged documents are authentic is the guy on TV says so et cetera.
Sorry lefties: Fox News has not been frequently caught forging federal documents and faking news. Liberal politicians get their turn there (unlike conservative politicians on far-left MSM media).
Anyway, I feel your pain. It must make you sick to know that 4% of US media it not controlled by micheal moore like far-left fanatics.
one more comment. It is probably good idea to keep politics out of housing blogs. These kind of childish comments don't deserve comments but I couldn't resist myself.
We all have our own different political leanings and there are plenty of political forums for that purpose. Just leave politics there.
"one more comment. It is probably good idea to keep politics out of housing blogs"
Not gonna happen. This blog covers the housing meltdown, but also the causes and effects. And politics, with the incompetence of our political leaders, plays a huge role. Politics will play an ever increasing role in this blog as we move towards the 2006 mid-terms and 2008 season.
Just as the bursting of the housing bubble will frame the races to come.
You want a pure housing blog, go to ben's blog. You want a fuller picture with some fricking attitude, visit HP.
My favorite thing so far I've heard from a realtor came out after commenting that I was worried about buying a house when house values seem to be going down. She stated that house values were not going down and were in fact going up rather nicely. At the time we were standing in a house for sale, empty for months and the price had been reduced twice since hitting the market. House prices are going down but house values are going up? Right.
I don't much care for the political commentary. People get mean, stupid and emotional. Further, they cast a lot of blame on the "other" party without seeing or ever admiting the faults of their own.
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