Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If someone HAS TO SELL and they are not getting any bites because they are basing their listing on 2005 prices, THEY ARE GOING TO HAVE TO TAKE A LOSS or keep on living there.
Here are a few situations I've encountered.
First, one person was asking a certain amount for their house. Based on comps of roughly what would be exactly the same home, their listing was over priced. I offered 10K less than what they wanted. They refused citing the fact that they had a HELOC on their house and did not want to owe money after selling. I walked away.
Second, one person overpaid way too much and also took out a HELOC. They are pre-foreclosure on their home. I offered their FMV based on three comps that were more updated and bigger ON THE SAME STREET. They refused and realtor stated others "gave their house away." Whatever.
And you are still without a house, right? see my point. I just think people get so caught up in getting a good deal, or even what they perceive to be a fair deal, that they miss out on getting the house that they will be happy in. Not to mention the buying process goes from 3 months to 3 years.
Let me put it to you this way...calculate how much you make per hour. If you are house shopping in NJ at all I'm guessing it's up there. For arguments sake lets say its $75/hr. How many hours did you spend researching online, talking with Realtors, AND actually going to look at houses? I'm guessing it's a fair estimate to say that you are putting 40 hours per month in for every month you are actively shopping. That means that you are spending approximately $3000 in lost time per month on looking for a house. Multiply that over many months or worse several years and that good deal that you finally found wasn't such a good deal after all. You can always make more money, but you can never get that time back. Just a thought...
i'm not asking you for sympathy, as i'm not in this situation (I can beat my chest much harder than you, believe me). i'm merely describing a scenario that could be more complicated than the easy and self-congratulatory "you're a poor money manager and bought beyond your means, jacka**". it's very presumptuous of you (which is odd, you seem to be an extremely level headed rational person) to think people who saw their equity vanish did so through no other reason than they couldn't foresee the largest housing collapse and recession since the 1930's. how silly that they didn't realize they may need to relocate for a job before the magical 5 years, especially in this economy.
so you really don't think homes in NJ have dropped 20%? huh. I don't find it at all unusual for a $600K home to now be selling for $480k in a good number of places.
also, you forget closing costs and realtor fees - so even if you lost 15% equity, you're still dangerously close to being underwater once those fees are taken into account.
lastly, IIRC, if you bought a house at the same price as 2006 or 2005, and they had put in $80k - $100K in improvements, isn't that a 20% decline? You bought in the $400's, correct?
they bought it for $440,00 in 2004, sold it for $445,000 in 2010. though they put 80-100 into it, you can never assume (or should never assume) 100% return on a home improvement project. they updated the electrical service, added a master bathroom, and a couple other smaller things. i have no clue if they put 20% down or not when they bought it. but they also bought their new house at a nice discount. so they saved a heck of alot on their "upgrade" to a new house.
i don't know of a ton of places with 600k homes in 2006ish now selling for 480. i'm sure it happens, but i think it's more of an extreme example.
honestly, with the relocation thing, am i really being presumptuous? you're proposing an absolute worst case scenario. sure, it happens, but I don't believe it's that common. and if it is that common, than I think people bought more house than they should have. home ownership isn't for everyone. if you have a prospect of relocating, and work for a company that won't help you relocate, then maybe you should reconsider buying such an expensive house no? the houses hit hardest have been the really high priced houses. 700, 800...etc. those houses were often overpriced to begin with, but people didn't care since they could put 0% down and get approved for anything. everyone keeps saying no one saw it coming. worse housing crash since 30s. but it's not like it was't being talked about. even jon stewart the other night showed a clip where he was poking fun at the housing bubble in 2005.
people didn't want to see it coming. it's not that they didn't see it. houses that doubled in value from 2002 to 2004, then still climbed 30% from 2004 to 2006....really? people didn't see it coming? if someone was buying a house in 05 or 06, they had some clue to the idea that housing prices were the highest they've ever been related to income, and that anything less than 20% down is a risk. they took that risk. if you bought in 2006 and put 20% down and had an emergency fund, then a relocation shouldn't cripple you. you lost money, but not crippling.
also you say magical 5 years, which i agree with, but people had started to subscribe to the idea that 3 years was enough (based on the assumption of continous appreciation of home values). i could have bought in 2006, with little down. i didn't because i thought...what would happen if i had to move in 2-3-4 years because of my job. i'm a smart guy i think, but i don't think i'm brilliant. i couldn't have been the only one thinking this way.
honestly, with the relocation thing, am i really being presumptuous? you're proposing an absolute worst case scenario. sure, it happens, but I don't believe it's that common. and if it is that common, than I think people bought more house than they should have. home ownership isn't for everyone. if you have a prospect of relocating, and work for a company that won't help you relocate, then maybe you should reconsider buying such an expensive house no? the houses hit hardest have been the really high priced houses. 700, 800...etc. those houses were often overpriced to begin with, but people didn't care since they could put 0% down and get approved for anything. everyone keeps saying no one saw it coming. worse housing crash since 30s. but it's not like it was't being talked about. even jon stewart the other night showed a clip where he was poking fun at the housing bubble in 2005.
Wow, you're being harsh today!
You know what, stuff happens in life. If you lose your job and get a new one and have to move, you move. Good luck getting a relo with a buyout clause these days.
Sometimes you lose your job and can't get another one or at the same pay rate. Someone gets sick or becomes disabled and all of a sudden you're at one income and you can't afford what you thought you could afford anymore. Or your child is born with special needs and all of sudden one parent has to stay home to care for that child. Say bye-bye to that second income.
On and on. Lots of good people made what they thought was a reasonable choice based on their current income, and then bad luck came their way. Bad luck can come to anyone.
And you are still without a house, right? see my point. I just think people get so caught up in getting a good deal, or even what they perceive to be a fair deal, that they miss out on getting the house that they will be happy in. Not to mention the buying process goes from 3 months to 3 years.
Let me put it to you this way...calculate how much you make per hour. If you are house shopping in NJ at all I'm guessing it's up there. For arguments sake lets say its $75/hr. How many hours did you spend researching online, talking with Realtors, AND actually going to look at houses? I'm guessing it's a fair estimate to say that you are putting 40 hours per month in for every month you are actively shopping. That means that you are spending approximately $3000 in lost time per month on looking for a house. Multiply that over many months or worse several years and that good deal that you finally found wasn't such a good deal after all. You can always make more money, but you can never get that time back. Just a thought...
damn. i spent nowhere near 40 hours per month. realtor sent us listing, we looked at them, if we saw one we liked, we scheduled a saturday afternoon or weeknight evening of looking at 4-5 houses. maybe took up 10 hours per month. i guess if you're seriously shopping, you spend more time. we looked over the course of about 24 months though. some months i'd spend 0 time.
You know what, sheet happens in life. If you lose your job and get a new one and have to move, you move. Good luck getting a relo with a buyout clause these days.
Sometimes you lose your job and can't get another one or at the same pay rate. Sometimes someone gets sick or becomes disabled and all of a sudden you're at one income and you can't afford what you thought you could afford anymore. Or your child is born with special needs and all of sudden one parent has to stay home to care for that child. Say bye-bye to that second income.
On and on. Lots of good people made what they thought was a reasonable choice based on their current income, and then bad luck came their way. Bad luck can come to anyone.
sorry, don't mean to be so harsh. lol. tahiti knows i'm not a harsh person.
i just think these scenarios are very rare, yet they like to talk about these in the media a lot. i know bad luck can come. when i did my house hunting, i didn't base what we couold afford on both of our incomes. i based it on what i thought we'd be able to afford if i lost my job. my wife's job is fairly stable. she'll be able to do it in some manner more or less no matter what. we'd be in much worse shape if she lost her job. i just think people need to go back to shopping for homes in this manner. i don't think i did anything revolutionary, just sane. if your household income is $200,000 and you're basing what you can afford on $200,000 income, you better have a darn good emergency fund (which very few people have). i dunno, i just think people have been living off way too many assumptions. i don't consider myself all that conservative with my money....am i truly that much more fiscally responsible? i dunno. maybe i am. but i think it's a sad state that we're in if people don't plan, to some extent,for emergencies and for periods of being laid off.
i think a lot of people have a pretty good idea of how secure jobs are in their industry. certain ones are better than others without a doubt. i think people acted very irresponsibly. i don't place all the blame on people.
but for relocation...i dunno that i believe that in NJ that's been a huge reality. could be wrong though. would love to see more numbers about it. but a lot of the areas i've been in, prices dropped, but there was really no panic.
damn. i spent nowhere near 40 hours per month. realtor sent us listing, we looked at them, if we saw one we liked, we scheduled a saturday afternoon or weeknight evening of looking at 4-5 houses. maybe took up 10 hours per month. i guess if you're seriously shopping, you spend more time. we looked over the course of about 24 months though. some months i'd spend 0 time.
hehehe maybe it is, but then again, I have serious OCD. When I was house shopping it was a full time job by itself. I was putting in probably 60 hours per month easy. Keep in mind I was looking in over 7 towns spread out over 3 counties. I'm also a self professed a$$4ole and don't think that anyone can do a job better than I can, so I was always double checking everything my Realtor sent me, and this guy was one of the best in North Jersey. Plus I was checking all the REO listings before they even made it on to the MLS.
Even if you spent 10 hours per month(which I think you are low balling) over 2 years it cost you a good chunk of change and you were renting for another 2 years. Of course you picked a great time to do this since the stock market has been on a tear and your down payment, with was most likely invested somewhere, probably at least doubled in value.
Funny too how when you look to buy now, some agents will tell the prospective buyer not to "insult the seller by lowballing". Sorry but if you are a seller in this market for any reason at all, you better get a thick skin because you are going to get "insulted" by low ball offers. Period. People are going for the bottom and if there are multiple houses in the area within their price range, odds are that someone will cave and sell at a low price.
Lowballing is fine, however some buyers are trying to literally steal a home. That means making 20 offers at 30% below comparable closed sales and hoping something sticks. I will not work with that type of buyer, as I consider it a waste of my time. I also do not want to be around people who behave that way, as I generally find it unpleasurable. A person who tries to steal a house in that manner usually has a whole host of personality problems that I do not want to deal with. When I bought my house, I looked for 2 weeks, found something nice, offered fair market value, closed, and moved on to the next stage of life. Spending years shopping for a place to live is senseless.
Buying a house is a long process. It took me over 3 years to close one. I started in Brooklyn (used to like in NYC), and gave up after a year. Every damn "house", basically, anything that hasn't collapsed yet, they asking for 700 to 800k. Renovation will cost another 15 to 30k. I just gave up.
Then I started my search on NJ in late 2007 found something near the end of 2008. They accepted my offer, and then during inspected, the inspector uncovered there was huge crack on the ceiling (from leak) that they were trying to hide (they printed the house, and did not disclosure it). We got out of the deal.
Then few months later in early 2009, we found another one. A new house sitting on the market for like 3 years. We made a low ball offer but the seller would not reduce a penny. So we moved on.
Fast forward few months to summer/fall 2009, we found another one. We really like it, and decided to go check it out again before we make an offer the following weekend. Then the seller accepted an offer during the weekday. We even put up the ask price, but seller want a quick sell. So we missed it.
Near Christmas of 2009, we found another one. My wife really like it, but I don't. My reason is because the property has no central air in the bedrooms on the 2nd floor. I told her, we look for a few more houses tomorrow, if there is nothing I like, then we make an offer to this house. (this house dropped the price from 550k to 500k less than a month later)
Then my current house came into the picture. This house was out of our price range a little, that I was not not planning to go look at. However, I basically give up on that point anyway. So I said, WTH, let's go take a look anyway. We went, and we really like it. It has everything we looking for. Yes, price is higher, but it worth it. I got a great deal for this house too.
The funny thing is, it was a frustrate experiences during close. The sellers divorced, and one of the seller refused to sign the paper until a court order came it. It was a bumpy experience for me.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
