A modest proposal
Homebuyers and sellers are both looking to strike a deal, but by definition they're on opposite sides of the bargaining table. Buyers want the lowest price possible for the house they're eying. Sellers want the highest price possible. If you're in one of those groups and see the other as unreasonable people standing in the way of your dreams, well -- we're all human.
But you know, it doesn't cost you anything to see things from their point of view just a little bit.
You're a seller aggravated at buyers who keep tramping in to see your place but never make an offer? Well, imagine how they feel, going to look at house after house that doesn't suit or is priced too high.
You're a buyer annoyed at sellers who won't budge on price and haven't done a thing to the property since they bought it? Well, imagine how they feel, effectively trapped because they bought too much house and don't have enough money to replace the roof, let alone pay the difference between what you think is a fair price and what they still owe on their mortgage.
Sure, this doesn't apply to all buyers and sellers, but you get the idea.
Having a bit of sympathy for the person on the other side of the housing-market coin doesn't require you buyers to pay more than you think is fair, or you sellers to take less than you believe your house is worth. It just keeps you from forgetting that they're human too. It makes you think twice before you say or write something cruel.
Now, some of you would-be buyers are shaking your heads at me because you're angry at sellers. You're angry at homeowners, period, especially the ones who bought during the boom and thus helped run up the prices. You waited because you didn't want to buy something you couldn't afford. You waited, and you waited, and you waited. But here it is 2009 and you still can't afford anything and -- dagnabbit -- prices can't come down fast enough. Nothing would make you happier than hearing that homeowners are losing their shirts, and possibly their homes too. Serves 'em right, you say.
But here's the thing: Those folks who bought during the run-up in prices? Unless they were downsizing from something more expensive, they probably haven't seen any benefit from the frenzy -- particularly the poor souls who bought at the very peak.
Imagine, if you will, a couple very much like you would-be buyers. They also waited, and waited, and waited. Except they finally gave in and got an adjustable-rate loan and a smaller house than they had in mind because -- dagnabbit -- the longer they delayed, the higher prices went, and everyone they knew was telling them that waiting was exactly the wrong thing to do, and they couldn't believe they were still renting when they'd intended to buy three years earlier. And now here it is 2009, and they lie awake at night, wishing one of the three other buyers they had to outbid for their lousy place with the leaky basement would have gotten it instead.
(I invented this couple, by the way, but I'd be very surprised if they don't exist somewhere.)
There's plenty of housing-market angst to go around, that's what I'm saying. Plenty of renters and homeowners alike wish the housing bubble never happened.
And that's my modest proposal: Remember that you have more in common than it might appear at first glance.
Categories: Housing market experiences
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Comments
Darn. I thought you were going to suggest cooking and eating used-house salesmen.
Posted by: Baltimoron | May 30, 2009 9:41 AM
~sobs~
Posted by: Jamie Smith Hopkins | May 30, 2009 10:04 AM
I've given up on dealing with homeowners trying to sell since they are in such a tough situation as Jamie mentioned above. They are negative on their equity and are going to loss it all if they sell for what their house is really worth. The emotions and entitlements that I've seen from seller is crazy. At least at this point I'm only willing to deal with banks whom have taken possession of foreclosures. Banks don't have emotions, they are willing to deal with non-contingent sales and people who have cash to put down...they even make deals like $0.50 on the $1.00. On the way down to trough prices, the bank is the only rational way to deal.
You may ask why can the banks take a sale of 50%, well my dear tax payers you bailed them out so they can simply take a write-down and get more TARP. Thank your politicians for the bubble on the way up, and the crash on the way down.
Posted by: Kevin | May 30, 2009 11:06 AM
Unfortunately, many buyers feel that they shouldn't have to pay (literally) for sellers' poor financial choices. And I have to agree. In some neighborhoods in Baltimore City, prices escalated beyond all sense of reason and common sense, despite the fact that there are no amenities, and sellers think they're going to be able to recoup the inflated prices they paid.
If I had the choice between paying almost $300,000 for a home in a marginal neighborhood with no amenities, and a neighborhood with lots of amenities (and maybe less crime, too) - guess which neighborhood I'd pick (and most buyers would pick, if they were in that price range)?
The same scenario applies to rental rates, too. Why would I pay $1200 a month to live in a neighborhood that has nothing going for it when I could pay the same and live in a walkable, safe neighborhood with shops and restaurants?
It simply doesn't make sense, especially when you consider the fact that the sellers/landlords are paying mortgages and construction loans on properties they may end up losing. This is the time to come way down in price, and get *something* rather than nothing for their overpriced properties.
Posted by: Catherine Robinson | May 30, 2009 11:52 AM
I bought in Hampden a modest rowhome that we could afford. I'm sure our house has gone down in value but we're planning on being here a good while so it probably won't affect us. But I know people who have to move for work or family that are pricing their homes at least 50k below what it would've been at the peak if not more. They know they might have to go lower. But being strapped for cash to move into the next home, their trying to find a middle ground. If anyone here met these people (and there are several here) no one would call them irresponsible, greedy, entitled, living beyond their means or what have you.
There are of course many people who DO fit that description. But let's not make generalizations about all sellers or even people like my husband and I who bought 3 years ago for the first time and are living well within our means.
What I find objectional is not the differences of opinion that Catherine or Kevin present. They have a legitimate point of view. I'm interested to hear it, and am sympathetic to it.
The gleeful malice at people losing their homes, judging all those people as deserving their fate is what is cruel to me. And wrong. And ignorant of the reality I see.
Posted by: Lesley | May 30, 2009 1:10 PM
Well this is true, as a potential buyer, I can choose to buy or not to buy. As the seller can choose to sell or not to sell. But then they're still stuck with their house. Maybe instead of focusing on buyers and sellers we should focus on the corrupt lending practices that facilitated this impasse.
Posted by: Anon | May 30, 2009 1:15 PM
Anon- you got it exactly right.
Posted by: Lesley | May 30, 2009 7:02 PM
I covered this a few months ago in a response to one of your blogs. County governments want upscale and high end housing, so a lot of people felt they had no choice but to pay those prices because there were no new supplies being built for the lower end. Then the mania wave hits and people think it is (1) a way to make money, (2) I better buy or I will never own a home, or (3) feel important through owning an expensive home; like a status symbol. Now the opposite is going on.
The fact is housing, like the rest of the economy, needs to have the price of commodities more in line with the citizens ability to pay for basic living expenses.
Posted by: Mr Raven | May 31, 2009 11:50 AM
Thank you for another thoughtful entry. You make some very good points.
I just bought a house and went the foreclosure route. I felt like too many homeowners were asking far more than I was willing to pay for their properties. I felt bad, sure, but I wasn't willing to pay the extra x amount of dollars that they would have needed to make it equitable for them.
And when I did--once--meet an agent listing a person's house that I thought was grossly over-priced, she mentioned that "of-course" I would have inspections done and make the offer contingent on financing... and I remember thinking "what a convoluted way of doing things.... just make the offer after your own research and you had better be able to finance the thing or pay for it outright--why offer if you cannot 100% get the loan?"
So I made a non-contingent offer on a foreclosure. MIght as well reap the benefits of the ostensible bailout money! :)
And I would add, that many, many banks over-list on their properties.
Posted by: jake | June 1, 2009 6:37 PM