Buyers' Mirage

In conjunction with my previous post is this article I found describing the problems both buyers and sellers are having in the present real estate market.

http://realestate.msn.com/is-the-buyers-market-a-mirage

Point of View

Let me tell you what is going on in the real estate world right now based on my experience with a house on the market for the last year.   First of all, no matter what you are told, it’s all about three things:  the buyer purchasing an affordable house, the seller coming away with enough money to move on, and the agents getting their commissions.  If you think about it, that’s what it has always been about.  

That has all changed.  Before the bubble burst, mortgages were being granted willy nilly to people who couldn’t realistically afford them.  In the last few years,  homeowners  suddenly found themselves underwater or treading water; thus,  the creation of short sales (mortgages higher than home values) and more foreclosures at one time.  High unemployment is one of the reasons, lack of good paying jobs, rising prices of gas and food, and lack of confidence in the American Dream and the economy in general.  I am not an economic expert but in simple terms this is how I see it.

For all of these reasons, those making a living in real estate have found themselves in trying times.  Well, join the masses.  A realtor will list your home at a price you think is reasonable.  If your house hasn’t sold, a month later he asks you to lower your price by about $10,000.  When you agree to do that and your home sits for another month or so, he asks you to lower the price again.  So you lower your price another $10,000.  No offer yet?  Must still be priced too high.  In the meantime, buyers are sitting on the sidelines watching and waiting for prices to keep dropping, maybe even watching a few homes in particular to see how far they will drop before making an offer.

While this is happening, realtors are putting pressure on sellers by subjecting them to high pressure sales meetings (under the guise of evaluating their sales agent’s performance).  They are telling sellers that they are competing with many foreclosures and that the competition is stiff.  They e-mail you reports and statistics supporting their position, predicting the doom and gloom ahead, all with the intent of getting you to lower your sales price. 

Then you receive a Saleability Check List, really more of a realtor’s wish list which you are asked to check and sign off on.  Some of the items include:  list below market rate, above market commission, extra items included, home protection plan, avoid contingencies, owner financing.  Good luck with that!

Not once do they offer to lower their commission.  After all, they have to make a living but expect you to sacrifice your financial position for their benefit.  The realtor and the seller become at cross purposes.

Then if you get an offer, they try to get you to make a counteroffer as close to the buyer’s offer as possible.  They tell you the buyer has made their best offer and is considering another house in the neighborhood, your competition.  You tell them so be it.  So they ask to meet with you again.  When you refuse, they try to bamboozle you into a “scheduled” telephone conference but you don’t take the bait.  Then they e-mail you asking if you will make a counteroffer.  You tell them no and to stop calling and e-mailing in an effort to dissuade you and the seller/agent relationship finally breaks down.

Sellers continue to lower their prices, lowering the values of all the homes around them.  Buyers believe the sellers are overpricing their homes.  Appraisers come in basing their evaluations on the homes that have recently sold (at greatly reduced prices) and it’s a vicious cycle where no one is winning but the buyer and the agent.  With the Internet it has become easier for sellers to do a For Sale By Owner.  The way things are going, if you can eliminate the middle man (the realtor) you will pocket more in the transaction.  I’m not suggesting this is an easier route but it eliminates the commission (unless a realtor shows your home) which is a big savings.  

This is the view and has been the experience of a seller in this market.  I welcome other viewpoints and any comments.

 

More Than a Crisis of Confidence

http://www.huffingtonpost.com/2011/06/09/nearly-half-of-americans-fear-depression_n_874406.html?icid=maing-grid7%7Cmaing9%7Cdl1%7Csec3_lnk1%7C69748

With home prices continuing to decline, cost of goods increasing and unemployment figures rising is it any wonder that there is real concern and worry?  Tell me how things are getting better.  If you voted for change, you got it.  The Carter days are starting to look good.

My husband and I are underemployed, our house has been on the market for nearly a year and we have cut back on our lifestyle.  We are not in the minority. 

Anyone else with a story?

Retrospective

It has been almost three years since my husband first lost his job, almost two years since I lost my job, a year since my husband had a stroke and almost a year since we put our house up for sale.  Looking back I can honestly say it has truly been one of the worst, most awful periods of my life, thus far.  I am only now beginning to feel like I have finally emerged from the tunnel.  We are both working at jobs we love and still managing to pay our bills.  We are still looking ahead to a time when we will move into a more affordable home with a less labor intensive lifestyle but for now we are staying put.  We’re not out of the woods yet, but I think (and hope) we are approaching a clearing.