As drab as the market feels, I just closed on my investment home in Portland.
Sold.
Check just came in the mail.
Granted, the sale price established though a CMA was obliterated by a Zestimate — the tool the buyer chose to trust rather than the conventional real estate pricing formula performed by my agent. It missed the important things like upgrades and improvements, specific location, view, and the overall stability within my particular neighborhood.
But these days, many out there don’t know who or what to believe. Some view the Zestimate as a mis-marked price tag. As the Blue Book for real estate. And when the cashier rings up a different price they argue on principle. Frankly, I don’t blame them a bit. I would do the very same thing.
So it goes in the wacky world of real estate. And with things so unstable, I was happy to have a buyer willing to even make an offer.
I have to hand it to my agent – he worked hard to close this sale. Dealing with a difficult buyer during a difficult time was no easy feat considering how desperate I was to make the last three years of ownership account for something more than a $20,000 loss.
I’m not bitter at all. Given the market, I’m grateful for the small things, like how the buyer qualified for a loan. And how the bank had a few bucks left in the vault in make the loan. And I’m grateful for my agent, who is a good man and did a great job.
So what now? I received a check yesterday — the deposit on the home. I’m basically back to where I started three years ago. Almost.
So anyway, I hear that now is great time to buy. That’s what I heard three years ago and that didn’t work out like we planned. But I’m willing to go at it again. After all, I’ve got some cash for a down payment, rates are low and if I can find something that flows positive with 10 or 20% down, in a market where prices have fallen and rentals are hot, and…
Well, not so fast, Davison.
Yes. I need more than a few superficial reasons to jump back into the pool.
Perhaps someone can explain to me exactly why now is a great time to buy. And where. And provide me with facts — and an analysis of those facts — to back that statement. Like many consumers out there, I’m a bit shaky and not ready to simply believe an ad campaign. But you could say I am motivated.
I suppose, when it comes right down to it, I am a lead.
- Davison
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Great post, Marc. I wish I could "sell" you on Miami, but not right now.
Let me go work on the critical facts and the sound proof.
Thanks.
Marc you are not a lead http://www.wellcomemat.com/video/6DF8FF1C76#wrapper
You are a customer than needs someone to truly work for you to do the homework on the market.
You had me at the title!
Marc, is it a good time to buy? That is not so easily answered as buying a home vs renting depends on many factors. How long are you going to be in your current location?
You are fortunate you walked away with your down payment because our home prices in Ann Arbor area are down to 1998-2000 prices depending on where you purchase.
I have a great calculator I can send you the link to where you can check the rental prices in your area to the current home prices, it will calculate it out based on interest rate, and the cost to sell. Don't want to spam your comments.
Buying is such a personal and financial decision and I would never just tell someone to buy right now. Of course it is also hard to advice someone to throw your down payment in the bank too.
My economics past tells me in real estate to buy near the bottom while the market is still going down. Money is usually cheaper and seller's mindsets are more cooperative. But as my former college coach says, not so fast my friend. Many of us who bought when the elevator reached the lobby didn't realize there was a sub basement to this market. I think in this instance, severity trumps fundamentals and means I get back in when there is a clear turn. Mark, your position is like many buyers right now. You (they) think you're a lead but I've got 14 of them who have thought the same thing for over a year. They're reclaiming the loose change in my car seats they lost last February. Someday they will be but right now they just want to be. Especially when their 'dream home' just got reduced another $30K.
Gang,
All great comments. Thank you. Each set an example for the types of information I need personally but more importantly, what the real estate customer needs from not just their individual agent but from the industry at large.
I watched the latest ReMax commercial last night, the one where a balloon full of hot air soars high above a neighborhood as a voice tells us how ReMax sells more homes than anyone.
And I ask, given the times, given the needs of the public, can the imagery and message of that ad be any more off the mark?
Hello Marc,
I've been reading for a long time, but felt compelled to comment since you are officially a "lead".
I run an investment real estate brokerage with a focus on emerging market nationwide. Our focus lately has been in the GO Zone. If interested you can read all about it on http://www.gozonegateway.com
If you are looking for an investment property, then why not take advantage of the GO Zone? I'm sure you have federal taxes that could be offset with the bonus depreciation.
Our new project is set to launch next week. Go to the link below and check out the video.
http://www.gozonegateway.com/go-zone-property/ocean-springs.html
Jeremy Quinn
http://www.GOZoneGateway.com
Marc –
Great post and way to get some educated information out there. The truth is that turbulent times are usually times of opportunity. As one of my coaches recently point out to me, the stock market is on a daily roller coaster ride, the real estate market is deflating and Warren Buffet is out there buying away! As a symbol of financial success, Warren Buffet gets this. However, I am certain that his purchases are very well thought out, educated decisions that are ran past all of his financial and business advisors. So the REAL truth becomes that is a time for opportunity for the right types of buyers and sellers in the right markets with the help of educated professionals.
Most of the great statistics are password protected. Perhaps the educated professionals can join together in trying to make more of this information public. I do have some great statistics and charts that show the "evolution" of real estate in the Chicago market. If you would like me to send it on, just let me know. In addition, please feel free to contact me with any specific questions/statistics/etc about the Chicago market…or as I call it, the little engine that could.
Marc,
Perhaps a better approach might be, "What is your goal"? How you answer that question determines the next step you take. Looking at your situation now, I would say either the question wasn't answered correctly in your last purchase or the analysis done during that purchase did not go far enough in the "What If" categories.
As far as I can tell, everything goes in cycles. The key is being able to read those cycles and time your strategy to take advantage of them. It shouldn't have been a surprise to anyone that the market was headed for a correction. And that should have been figured into a strategy.
Today, there is in fact a lot of upside potential. But once again it boils down to being able to read signs and plot your strategy accordingly. But I would say forget the short term flip, unless your into buying fixer uppers and even then you need to be honest about the "value" you added. I have yet to see, even in the stock market, when a good long term strategy has failed. That doesn't mean you lay your money down on a number and ride it to oblivion. But is does say you have to work a little smarter than you used to.
I think we are in one of the most exciting times in real-estate. We will see evolutionary markets and practices that normally would take decades to mature, change literally overnight. The real winners are going to be those savvy individuals and companies with the ability to turn on a dime and adapt.
Barrett Powell – Somewhere in rural North Carolina.
Thanks Barrett,
Goals are simple and old fashioned. Invest in some real estate with long term appreciation potential, lock in a good rate, reap some positive cash flow and some sane appreciation values over the next 20 years.
Been looking at some neighborhoods in Michigan as Missy has been feeding me some great info.
Thanks
$20K loss. Ouch. Glad you aren't bitter. I don't know your reason for selling, so I can't make a judgement call on that. I do know that it is a good time to buy, but you MUST have a good Realtor who KNOWS where to find the deals. I have always liked this advice: Buy the worst house on the best street you can afford.
Beyond that, follow the market. When it is a buyer's market, buy. When it is a seller's market, sell. Try to set up your financial situation to be able to accomodate those goals.
Had to sell to help compensate for all the losses I have endured with my California properties. As it turned out, in 2005 when my California agent swore to me that "now was the time to buy" and offer well over asking price because money was cheap turned out to be not the best advice. I hold myself responsible for listening to that advice. Which is why I believe that today, you need more than just a slogan to get buyers to respond. You need to back it up with information that the consumer does not have access too that backs up your claims. You only cultivate better leads, you create opportunity for yourself and happier customers.