Why people think they can get top dollar for a house they have neglected for twenty years is beyond me, but they do. Home sellers and their perfectly coiffed agents peddle their worn out wares, all the while knowing what lies beneath are wood destroying insects and a furnace that will most likely decide to give up the ghost just in time for the coldest day in recorded history. The words “beautifully decorated” in a home’s online profile is code for “pay no attention to that smell, look at the snazzy decor instead.”
Real estate transactions make people a lot of money, and mortgage lenders, appraisers, and realtors have their head in the game. They are always looking for that sucker home buyer who blindly trusts that they know a home’s value. Just so you know, a home’s value is what someone is willing to pay for it NOT what the seller paid for it plus realtor fees, plus the cost of every lame home improvement project the seller ever attempted, plus the emotional equity they keep stored in the basement behind a rusted water heater.
In what is called a buyer’s market, there is a lot of inventory of affordably priced homes, and of course, the opposite is true in what many in the real estate biz like to remind buyers is a seller’s market. “Well, it’s a seller’s market, you know, and they’ve got you over a barrel.” If a real estate agent says those words to you, you should call bullshit and walk away, fast! The point so many people in “the biz” tend to miss is that you can’t make a silk purse out of a sow’s ear. If a home has $20,000 worth of deferred maintenance, it should NEVER go on the market at top dollar. Period.
Sellers, listen up! If your house needs new windows, doors, siding, appliances, light fixtures, major plumbing repairs, attention to an overloaded electrical system, and a new roof, do not slap a coat of paint on an accent wall and re-tile the wet bar counter top! Do not tell buyers that you recently changed the air filters for the A/C and cleaned the gutters! Do not expect buyers to pay for all of the crap you can’t be bothered to fix!
I have, no exaggeration, visited hundreds of homes for sale in cities across the country. I purchased my first home when I was nineteen. I have relocated more than a dozen times, and with each relo I have moved twice. First to a rental before purchasing a home. Sometimes this was necessary because we still had a house for sale in another city. Sometimes it was because we were co-located for six months until the school year ended, but every time I was responsible for the home search, and every time, without exception, it has been enlightening and excruciating. Some real estate agents will let you do their work for them. If you are lucky enough to find one who is experienced, or at least hungry, the process can be fun. Sort of. Here are a few things home buyers need to know.
Buying more house than you can comfortably afford is a mistake. Taxes, insurance, AND maintenance are part of the deal. So, if you think affording monthly mortgage payments is all there is to home ownership, think again. Maintaining your home is the best way to preserve its value.
Real estate agents need you. Without you, they go out of business. Find one who will work FOR you. Interview them. Don’t just take Bubba’s recommendation. Tell them what you are looking for and how much you can afford. It helps to know what you are looking for. Make a list of what is most important to you and shop from that list. Anything extra you get is just icing on the cake. If you tell an agent what you are looking for and all they show you are McMansions out of your price range, find a new agent.
If they try to convince you that you might learn to love sheet rock repair, find a new agent.
House hunting in real life is not the same as on TV. Realtors, lenders, and appraisers know each other. In some cases they have worked together for decades. They network with everyone from the home inspector who finds a leaky faucet and the handyman who fixes it to the gal at the title company who checks county records to see if the property has any liens or delinquent taxes. This is important to know. Why? Because these people play an important role in the housing industry, an industry that has created enormous wealth for some, poverty for others, and a resurgence of DIY for those in between.
No matter what market watchers say, homeownership is still the American dream. Unfortunately, bank owned and foreclosure property has become an American nightmare. Flipping and flim-flamming have replaced the block party in many communities where faceless entities pay to keep the grass cut. Homelessness is a growing trend while homes across America sit vacant; rotting on the cul-de-sac of the mortgage lender’s inventory of REO (real estate owned). We have to ask ourselves, where does it end? Buying and selling mortgage debt can’t be all there is left of the American dream. Can it?
Our homes should be our sanctuary, our safe place, our place to take refuge and take pride.
Let the buyer beware of money pits. Let the seller beware of educated buyers. Stay tuned for Selling Your Home The Feng Shui Way. Until then, here’s a video just for fun. Sort of.
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