For months (MONTHS!) I’ve been wanting to write several ranting posts about the real estate market, and the various characters you’ll find when you enter it.

I decided to wait until I was out of it, lest something I say come back to bite me in the ass.

Now, the anger has subsided, the topic material no longer as fresh in my mind. So I’ll do my best to bring it all back.

The Real Estate Market in General

Perhaps the most talked about business phenomenon (among non-business people) aside from the price of gas, the real estate market is a hard thing to peg. Everyone has something else to guess, some other prediction. Buyers are all sure that market is falling, house prices are coming down, etc. Sellers are sure that the market is strong. Brokers are sure they want to make as much money as they possibly can. That’s about it for universals.

Real Estate Brokers

Before I go on, let me apologize to anyone who is, or is related to, a real estate broker. I am sure that the following doesn’t apply to you or your kin. Real Estate brokers are slime. They are shady, lying, dirty snakes who have no allegiance, except to their commission check. I wouldn’t trust a broker if he told me the earth was round. Every word that comes out of their mouth is fraught with lies, hidden meaning, double-speak and agenda. They are always trying to sell you something, most often NOT something you want or need. If you know this going in, you can take what they say with a grain of salt, use them as you need them (to convey offers, get you into locked houses) and try to limit your dealings. If you don’t, you can get caught up in the trap of the “sweet, nice” broker, who is looking out for you, who wants to get you into your dream house. Nevermind that the house you’re in has sagging floors, a leaky roof, backed-up sewage in the basement and active, raging termite infestation. THIS IS the house for you. It’s a STEAL. You’ll love it. And it’s less than a mile to the synagogue. (No it isn’t. It’s 1.1 miles, I measured it on my odometer when we drove up. And that’s not the synagogue I told you we want to be at six times already. We’re 1.5 miles from that one.)

My feeling was that if the broker was honest, she would recognize the faults as well as the positives of each house. But I never met that person. No, the brokers that took me to houses played dumb. I’d point out loose tiles in the kitchen. She, having been in the house a million times before me, would say “oh, I never noticed that. But look at these moldings!” Don’t try to divert my attention. After looking at 16 dumps all morning, I know what to look for in a house. I appreciated the one broker who took me into the basement, showed me the heating system, pointed out where the electrical box was. All of these things are going to get inspected anyway before we go to contract, so why try to hide them? So you can argue with the inspector later on? (More on that later). I am not buying a house for fancy moldings, especially if the moldings are in a room with a leaky ceiling. If it comes with the house, wonderful, but if I have to re-lay the tiles in the kitchen, or tear out the walls in the living room to fix plumbing, I’m taking that cost off what I’m willing to offer. Moldings or not. (More on that in the “seller” section).

Of all the people I met in the whole process, real estate brokers were the absolute worst.

Sellers

Sellers comes in some several varieties. There’s the old couple (or widow/widower) whose kids have moved out, and doesn’t need the size house anymore. There’s the young family who gets a job transfer out of town. And there’s the annoying middle-aged couple who is trying to catch onto a hot real estate market and cash out.

There are other groups, and each group has sub-groups. And each group and sub-group has influences on how they will market and sell their house. For instance, the old couple may have a son or daughter making decisions for them, who doesn’t care that his father can’t walk up the stairs anymore, is basically living in the basement/den and really needs to move to a ground floor apartment. All he cares about is maximizing value on his yerusha (which he can practically taste). When you walk into a house, like it, and ask the homeowner a question, and you get the answer “my son knows that, I’ll ask him,” run. Run fast. They won’t budge on price not a bit.

The “cash-out” couple is also hard to deal with. They think this real-estate thing is a bank account. They want an ATM transaction. Easy, no questions, done in five minutes. They are hard to negotiate with (because they usually have a number in their had that they want to cash out, as though they were pressing it on an ATM) and if they don’t get it, they won’t move. The problem is that usually that number is WAAAAAAAAY out of whack. And when you make an offer that you think is reasonable (based on the 34 other houses you’ve seen that week in the same price range), they see it as lowball. Within that sub-group, is the emotionally attached wife. She’s been living in her house for 30 years. She loves it. To her, it’s priceless. “Hey, if I can live with that creaky floor for 20 years, it’s fine for anyone. I shouldn’t have to reduce my asking price because of it.” And, “what do you mean I have asbestos in my basement? My basement is fine.” These are the people that will take it as a personal insult when you sit down with an inspection report and say, “your house needs $X of work before we move in. I didn’t know this when I made my offer. I’m willing to move forward if you are willing to discuss a reduction in price.” These are the people that will look you straight in the eye, and in response to “I was hoping we could be reasonable,” respond, “I don’t want to be reasonable.” (Yes, this happened to me. I wanted to punch the asshole in the mouth.)

Finally, you have the “For Sale by Owner” owners. This is the guy that posts a listing on craigslist, or the Five Towns Shuls group, with a laundry list of reasons why he thinks his house is fantabulous. I saw a listing, the guy was selling a moderately-sized split level for the price of a large colonial. (If you don’t know what that means, trust me, it’s overpriced. Badly.) Because of all the wasted money he put into it. Like his $65 doorknobs (sorry, I am not buying a house because of the doorknobs. It’s your problem that you spent that crazy money for no reason. I’m not going to enable you). Usually, these people know some broker or other, and they will try it themselves first, see if they can sell without paying a commission, and after a few months, give the house over to a broker (because they can’t sell it themselves). They will inevitably overvalue, and therefore overprice, their house. And then they won’t understand why it won’t sell.

The interesting thing about overpricing a house, is that it drives the market away. So while if you’d put it on the market for X and it’d sell for that, if you put it for X + 100,000, people will see it, and move away. Then you need to drastically reduce the price. But now people won’t buy it at X anymore, because it sits on the market, people see it, dismiss it, and there’s a smaller pool of buyers. Plus, buyers are savvy. They see that once a house sits, the seller’s get antsy, and they wait. Ultimately, you need to drop the price to X – something (could be up to 50,000 or more) to re-generate interest.

There were so many time I wanted to say to sellers, “What the hell are you thinking?” For instance, just today, I saw an ad with the headline above: “House For Sale – Price Reduced Below Market!” Well, there’s no such thing. “Market” means the price people are willing to pay. You ruined your market, and now people aren’t willing to pay. There’s no below market. There is no market. Good luck. The thing is, I know this house. I saw the listing on craigslist the first day it went up. I ran to see the house with Mrs. G. At the time (this was MONTHS ago), we valued the house somewhere in the low $600’s. We would have talked to the guy, but he was asking $725,000, WAAAAY above what similar houses were getting, or even asking. I told him we were thinking low sixes, and he said he wasn’t interest. The house is still on the market, some 8 months later. First, he gave it to a broker. Now, there’s a broker listing and a FSBO listing. The broker listing says $629,000 as the asking price. The FSBO doesn’t even put the price anymore. See, if he has listed it at $650,000 9 months ago, he might have sold it for $620 or abouts. Now, he’ll be lucky if he gets a number that starts with 6. And every time I see the listing, I get a certain vindicated glee. You tried to maximize the market instead of being realistic and reasonable. Well, the market bit you in the ass. And now, prices are falling, and there’s no such thing as a bidding war anymore. You can’t pump up your house by 100 grand, and watch people fight over it. Buyers are looking carefully. When houses sit, buyers can take their time. I went to see the house that I bought three separate time before I made an offer. This is what people do now. They investigate. They go online, check prices and comparisons. They know things going in.

Getting back to Brokers, they seem to ignore this new reality. They seem to think that they are the sole source of information for houses anymore. This just isn’t true. When I was shopping, I looked at a ton of different websites to get as much info about a house before I even called the listing agent to make an appointment. Buyers don’t need brokers anymore, with just a little time and effort, they can do without them. But Brokers still treat you like they know everything and you know nothing. Well, I’m sorry, but when buyers are so well-informed, you can’t pull the wool over their eyes. They catch wise.

Finally, about Brokers, the most infuriating is when they get caught in a lie, and then try to dance around it, or deny it. Just fess up, you were trying to cheat me, and I caught you. We’re finished, good-bye. And don’t try to tell me that it was my inspector was wrong or lying. Of all the people in the process, the inspector is the one that I pay, who works for me. Why should I take the Broker’s word (or the homeowner’s) over my own representative? Don’t lie to me, and bash my inspector, to get me to disregard his report, and buy the house anyway, even though he’s told me it had major problems. Oh, I see, the problems aren’t major because you say so. And you know, because that’s your sign stuck in the front lawn.

Thankfully, in the end, after all the houses I looked at, all the shady brokers I dealt with, all the delusional and self-infatuated homeowners I tried to negotiate with, I met a nice lady who was moving to Arizona to live near her daughter. She had already closed on her apartment, and wanted to move quickly. She kept her house in excellent condition, and so had nothing to hide with the inspector came. (I’d been to a house where there was a several hundred pound metal plate covering the entrance to the crawl space. What were they trying to hide? Sewage.) She had priced her home commensurate with what other houses in the area of that type were asking. She responded quickly to my offer. Her broker, knowing that I was serious when I told her my stop dead price, pushed the owner to consider it. And she accepted the next day. We had a contract signed, with no issues, in less than a week. And she left me a package of names and phone numbers of everything I needed to know about the house. During the contract period, the broker made herself available to open the house for us to look several times. Finally, finally, a smooth and enjoyable transaction. If at any time someone needs a recommendation for a real estate broker, I have one name (and only one name) that I would give them (who, I used to be reluctant to, because there was no website for the brokerage, but now there is. And it’s a nice one that’s easy to navigate).

Almost every house I saw that was crazy overpriced is still on the market, or has been taken down (cash out couple decided not to sell. the day before we signed the contract. we’re better off). And, like I said, I get a certain vindicated feeling each time I see the listings, knowing that I can say to these people “If you’d have been reasonable when we met, I might have made an offer. But you wanted too much, and now you have nothing. And there’s one less buyer in the market.”