Back in the early 1990’s my husband and I tried to buy our first home in Southern California. That market was experiencing some challenges at the time, and we thought we would be able to swoop in, and snap up a great house with no money down using our VA loan. We made at least 4 low-ball offers without success. One home was offered at $215,000, we offered $185,000 and the seller countered back at … $215,000. His rationale? That was the price he “had” to get in order to make any money on the deal. Ultimately we weren’t successful in purchasing a home in SoCal. Good thing! Within a couple months my husband’s company offered him a transfer to Boulder, CO and we have happily been here ever since, and have indeed been homeowners.
But a few things from that time in our lives have stuck with me. One was an article I saw in the LA Times back then that lambasted sellers who have what they called a “gotta get” mentality. “I have to get $300k for my home, or I can’t buy my replacement home.” Or “I’ve got to get $450k for my home because, if I don’t, after my mortgage and transaction fees I won’t break even.” Or “I have got to get $275k for my home because that is what I paid for it 6 years ago.” Guess what sellers – WHO CARES??? As a buyer I could CARE LESS about your situation, what you owe, what you paid, and what YOU think your home is worth. As the home’s current owner, yours is the most biased opinion possible! What matters to me are MY housing needs, MY budget, and what your home is worth to ME.
Something else that stuck with me was a conversation we had with a friend of my parents, Dr. Alan Kreditor. At the time he was the Dean of the School Urban Planning and Development at the University of Southern California. Very Smart Guy. His wife Marcia was also the real estate agent assisting us in our home search. At a gathering one night we expressed frustrations about our home search – we were very concerned about resale and not paying too much, exasperated by unreasonable sellers, our inability to find the perfect deal. Time for the tough love. He said some things we will never forget.
Here they are, here are your take-aways from this post … You can’t always look at a home purchase as a money-making venture. This is housing – this is where you will eat, sleep and dwell, with your family, pets, belongings, etc… When you quit looking for what you THINK is the perfect investment and start looking for a place to LIVE, you will find the right home. When you sell this property in the future maybe you will make money on the deal, maybe you won’t. You have to ask yourself … Did we enjoy living here? Was it affordable for us? Did it compliment our lifestyle? Did we feel safe here? Did we create lasting memories in this home? A profit on the deal is the icing on the cake. This is housing. Period.
Stay tuned for Part II and what my company and I are trying to do to ensure that our buyers housing needs are met, and that our sellers come to terms with current market dynamics.
I whole-heartedly welcome ANY and all comments on my musings! (Because of course that is what they are … MY musings. However Alan Kreditor is a really smart guy so take (my recollection of) his words for what they are worth, which is substantial, IMO.)
Director of Business Development and Relocation