Thursday, October 06, 2011

Our house saga: The whole story, pt. 1

Now that TBO and I are officially non-homeowners once again, I thought it might be instructive--or possibly just entertaining--to detail our experiences in real estate. On balance, our story is a disenchanting one mirroring the depressing state of our nation's economy as a whole. I know many people who have a very different story to tell in regard to their homeowning, but all that does for me is illustrate more acutely the declining faith I have in the permanence of the American Dream. In other words, things ain't what they used to be, and it's too late for many of us to partake.
I* started looking for houses to buy when the market began collapsing in the summer of 2007; before that, even given TBO and I having professional level jobs (if not salaries entirely commensurate), houses were priced well out of our affordable range anywhere in SoCal remotely close to where we worked. As late as the end of 2007, for example, the median price for a house in one of the cities for which we work was well over $700K! That reality forced me to look dozens of miles away for something we could possibly have afforded, and even at that, our choices were limited to fixer-uppers, tiny bungalows, or in neighborhoods where our chances of escaping criminal activity grew dim. Since we were in no hurry, I could take my time doing some research and poking around the market to find potential hidden gems before contacting an agent for serious entry. I spent about 6 months reading real estate blogs (to see what those intensely involved in the hitherto-unknown to me world of homeownership and real estate were saying about the collapse) in an effort to understand how far the market might drop and when the prime time to buy might occur, and also to discern what some "experts" were saying about interest rates as well. At the beginning of 2008, I became concerned that interest rates might have bottomed out--a reasonable conclusion based on the reality that they hadn't been so low in many years, if not decades--and if we did not jump in the market then, interest rates might be raised to a point where even if the home prices dropped further, our mortgage payments wouldn't get any lower, but the house we bought would be worth less.
So I contacted a friend of my mom's who was an agent to see if she had some advice, and also to see if she would represent us in our now-imminent search. I trusted her implicitly (and still do), but unfortunately she was unable to help us with our search, since she had no expertise in the locales in which we were hoping to live. And as far as any advice she had to give, there was little input she gave me that I hadn't discovered on my own; interest rates had never been this low, and could be raised at any time, prices probably won't drop much further, etc. She gave me Realtor Line #1:"This was a great time to buy."
RETROSPECTIVE LESSON ONE: If you ask a real estate agent, it is always a "great time to buy." Since they have no other answer, the one they give you is meaningless.
I asked my mom's friend for a referral, and even though she didn't know anyone personally who worked in our areas, she put us in touch with someone who did. (Again, I do not blame my mom's friend for what happened; she told me straight up that she didn't know the person with whom we started working.)
From the first moment "our" realtor drove up to meet us in her brand new, sparkling Corvette, I sensed that TBO and I might not be the kind of clients she was either used to or wanted to help. We were definitely looking at houses far lower on the value spectrum than she preferred, and when she instantly pooh-poohed the house with which we had chosen to start our hunt--she didn't even "let us" go inside it!--my feeling was confirmed. At the time, I thought it was actually a sincere effort on her part to guide us to some decent neighborhoods and values. Neither TBO nor I knew anything about the areas we were investigating, so we needed some guidance along those lines, to be sure. When she showed us the next house (which wasn't one we had seen advertised, and was the first one we had set foot in) and told us that we should snatch it up immediately, I was a little put off by her reaction to our desire to see more than one house before forking over tens of thousands of dollars and committing ourselves to hundreds of thousands more. She acted as if we were just being obstinate in wanting to, you know, "shop" for a place to live! Over the next few weeks, it became clearer and clearer to me that she wasn't really paying attention to what we wanted from, or more specifically, what we wanted to know about, the whole process. I asked her for her professional opinion on many occasions what she thought the market was doing, or whether she thought mortgage rates were going up or down, and at no point did she ever really answer my questions. Instead, she simply repeated realtor line # 1 ad nauseum. In turn, I began questioning her dedication to helping us.
RETROSPECTIVE LESSON TWO: Realtors don't care about you; you are merely a paycheck to them, and the sooner you buy, the sooner they get paid. Asking them to do work on your behalf beyond lining up places to see (and many times, even asking for that) is fruitless.
More later . . .
* To my everlasting sadness, I was the one who pushed TBO and I into this disaster. She remained and still remains blameless through all of it. : (

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