     Senator (Senator) | Thursday, June 08, 2000 - 02:08 am 
This is somewhat off-topic. My wife and I are looking at homes for purchase. We are astounded at the prices and how they are totally out of control. Maybe those in California think a 3 bedroom, bath and a half at $245k is a bargain--only 1700 sf-- but I think it's crazy. She wants to buy, I don't. we know who wins. Every single home is overpriced--from 20,000 to whatever. We went through a home that is a dump--sure, it's large, but it could double for Tom Hanks "the moneypit". I called the agent about a lease purchase and this snooty real estate agent with a phoney English accent said she didn't think so--that the home only needed a slight cleaning (hey lady, what about the dead bird in between the storm sash and the window sill?)and TLC. TLC, my @@@! There was so much water drainage damage in the center hall entrance way, it looked like a lake had formed. They wanted 475k for that piece of trash. Many years ago i read about a book called the coming crash in real estate--it obviously was wrong. We are talking good conservative Midwest here and this is a riproaring mania. Well, I don't think I'll get the financing anyway, so I'll have to rent for another year but where will home prices be by then? Anyone else think things are out of control? (California residents need not respond since they have been out of control for years in your state) |
| Don (Don) | Thursday, June 08, 2000 - 04:21 am
Housing will cost the maximum of what 2 married people working full time can afford to pay after letting every other bill go.
Since affordability is based on wages for the area and the Fed is doing a good job of taming inflation by making more people unemployed, housing can only reach so high without hyper-inflation.
Remember housing prices only started going crazy when our economy jumped from a one wage earner to a two wage earner dynamic.
Maybe Taliban has a point. |
| Christine Baker (Admin) | Thursday, June 08, 2000 - 05:50 pm
Don has a good point. Buyers will pay what they can afford and sellers will ask for what they can get.
Where prices will be next year will depend on the economy in YOUR area as well as the supply of housing.
The San Francisco Bay Area and Silicon Valley are great examples for the importance of LOCAL jobs and pay. During the early 90's prices went down while most of the country's housing cost went up.
Whether a home is overpriced depends on the comparable sales. You need to find an agent who has the public record SALES for your review. That's how you establish market value.
You also need to know about seller concessions such as closing costs, points, carrybacks, new carpets, etc. That's what a local agent should know.
I think you should continue to look, for a good agent as well as a house. Familiarize yourself with various neighborhoods, follow the sales.
A camcorder or cheap digital cam are great to keep track of various houses and follow price reductions and what they eventually sell for.
Even in very HOT markets I've seen great deals beginning in late summer until Feb or so when sellers again expected excited spring buyers to pay full price.
You need an agent utilizing contract software so that professional READABLE contracts can be cranked out in a few minutes.
I have worked with many buyers most agents would not even bother with. Persistence paid off consistently. I learned to ignore listing agents' statements such as "the seller will NOT carry back" or "the seller won't take anything less than ..."
Senator, just keep looking at houses and agents and be PATIENT. I'd say my average buyer looked for at least 6 months and wrote 5 or 6 offers, some a lot more.
Rentals and vacant properties are always worth looking into, just like divorce, probate and other distress sales.
Your financing is the key though, you need to know what goes and what doesn't. |
| Senator (Senator) | Friday, June 09, 2000 - 01:56 am
Christine, thanks for the tips. It is frustrating to say the least. I'd like to share some knowledge for those with a ch7 and looking for a home. It is imperative that you start cleaning those CRA reports pronto. You can rest assured you will be shocked at the scores. Get ready for the catch 22. Mortgage companies will underwrite you but be prepared to cough up 15%. 10% requires a CRA of 600, 5% requires 650-680. However, you still have to get beyond a year from discharge--the magic Maginot line (for you non-history buffs,it is an impenatrable defense--supposedly). So how hard is it to get these scores? it is very hard.
I'll continue looking but I think my reaction to the prices is sinking in with the genral public but not sellers. Homes are beginning to sit. People aren't overbidding all of a sudden. For those with an interest, I suggest reading an article posted at www.fiendbear.com that talks about runaway housing prices. Not much comfort, but at least you know you're not crazy about how much prices have shot up. |
| Senator (Senator) | Saturday, June 24, 2000 - 12:08 pm
We just got done with the emotional aspect of writing a contract on a home that has been on the market for nine months. It is a plain box of a house,88 years old, has charm and a furnace that is as old as the house. The basement leaks. One car garage, one bathroom up, three bedrooms, one bathroom down off the kitchen. They rejected and countered coming down 9- then they wanted 10,000 down as earnest money. Plus get all the inspections done within a week. Give me a break. You would think a seller's market is in force. Hello!!!! The Federal Reserve is raising interest rates on you greedy idiots. Soon you will be lucky to get 60% of what you are currently offering. Remember October 29 and 87. It's nice to vent. Even our agent, who I encourage to argue with me about pricing, said it was a fair offer. oh, well on to others. |
| Christine Baker (Admin) | Saturday, June 24, 2000 - 03:11 pm
You'd think after 9 months on the market they'd get a little more realistic.
Yeah, go on to others, it's THEIR loss. |
| Michelle Nielson (Michelle) | Wednesday, June 28, 2000 - 04:44 pm
WOW, guess I got lucky. Our house is 3000 sf (four true bedrooms, 3 bath, diningroom, living room, rec room, bar, kitchen) for $129,950. Seller paid closing. This weekend we saw the exact same house go up for sale. It smelled of smoke on the front porch, the carpet was wore out, not updating (still had burnt orange limolium in the entry) and they were asking $145,950. I have no doubt it will sell for that price. It seems in the past week prices have skyrocketed and they are selling. Two months ago when we signed the deal on our house it was a stale market. |
| Senator (Senator) | Thursday, June 29, 2000 - 04:54 am
Real estate right now is acting like the stock market--crazy. However, without knowing where you live, I think 3000 sf for that price is incredible. I guess it is all relative. People in CA or NY think the Midwest is cheap. It is in comparison. But I know that salaries aren't keeping pace, at least at the about to reorganize company where I am at. |
| Michelle Nielson (Michelle) | Sunday, July 02, 2000 - 11:25 am
Yes, the midwest is much cheaper than the coast. I have seen other areas much cheaper than outs, but nothing but farmland around it - aka: no jobs. I live in a major city suburb. I feel we got a really GOOD deal. It seemed the market died down a little for about a month now but it seems to be soaring again. A house around the corner from ours sold for $145,000 in 3 days and it has about 1/2 the square footage - but it has been totally updated.
When we started looking at houses we took our digital camera and made comparisons. There is no way you can remember everything from one house to the next. Hell, I was getting floor plans of the various houses mixed up. |
| Senator (Senator) | Saturday, August 05, 2000 - 06:23 am
We circled back around to those people whose house we liked. we bumped our offer. we were within 10k of what they wanted. I asked the real estate agents to knock off their commission so that the deal could get done and the seller could get what he wanted. No way. So rather than get the sale, the listing expired. the agent walked away penniless but saved her "integrity". What an oxymoron--a real estate agent who gets a big fat 8% commission refused to go to 5% and pocket the cash. I do not demean all brokers--some are very good and wise. Our broker said absolutely, she'd reduce her commission--without hesitation to get the sale done. My question is--how long after the listing expires must you wait in order to circle back and write an offer using only your agent? she said she'd only charge 4% to the seller. |
| Don Semler (Dsemler) | Saturday, August 05, 2000 - 07:41 pm
I believe if the listing has expired, you agent could go and try to get the listing. If she gets it, then you could buy it through her. However, if you tried to go directly to the seller on FSBO, the seller could get sued if their was a clause in the contract giving them 30 days(or whatever is in the contract) on prior prospect comming back to buy the house. Usually there is a clause. This protect them from people trying to go around the listing. |
