As I mentioned way back in this post (yes, go read it! It was a long time ago, and most of you weren't here, yet), my wife and I have been trying to buy a house. This has been a long, arduous process. Really long. We started looking back in January, if that tells you anything. The fact that it's taken so long has had nothing to do with us and everything to do with the screwed up state of the real estate market and the fact that a bank is on the selling end more often than not.
We actually made an offer on the very first house we looked at. Yes, back in January. It wasn't a great house, but it had a huge back yard (HUGE) with several fruit trees, a work shop shed, and a storage shed. We were willing to overlook the deficiencies with the house because of the space for the kids (i.e. our daughter) to run around in. The real issue, though, was that it was a short sale (that's when the "owner" is trying to sell the house for less than what s/he owes on the mortgage (just in case any of you didn't know that)).
The home owner was in foreclosure proceedings and was trying to get out from under that by selling the property. The problem was that she really didn't want to be selling. At any rate, we put in an offer on the house. The short sale process sort of puts a halt on foreclosure proceedings, so the woman suddenly found herself living in a house mortgage-free. She did everything she could to slow down what is already an incredibly slow process. What the heck? I mean, I understand her position, but to just put up blocks at everything that needed to happen? It was ridiculous. Not to mention the fact that the two mortgage holders on the house couldn't stop bickering with each other. Over $3,000. Really. The banks were bickering over (what was probably) pocket change (to them).
We put in an offer on another house. So, then, we had offers open on two houses. I don't remember if the second house was a short sale or a foreclosure; it probably doesn't really matter. We made an offer that was too high. In a market with falling house prices, we made an offer of above what the bank was asking. Seriously. We did. There were a couple or few other offers as well. You want to know what the bank did? They came back with a response of "give us your highest and best" offer. What the heck? I wouldn't do it. I told our agent, basically, "screw that." I already didn't like the offer we were making, but my wife didn't want to spend six months looking for a house. >insert maniacal laughter here< We withdrew our offer.
Evidently, everyone else felt the same way about it that we did. A month later, that same house sold for $30,000 LESS than the offer we made. What the heck? Stupid bank. It was a good thing, though, as neither of us really wanted that house.
Eventually, because of the roadblocks the woman from the first house kept throwing up to the selling process, her agent quit. Seriously. In the middle of the deal. Because of the lack of progress on the whole thing, we would have had to start over once she got a new agent. I'm not exactly sure when that happened, but that house just came back on the market a couple of months ago at something like $20,000 less than our offer. The woman is still living in the house, because, I guess, the bank can't make her leave while she's trying to sell the house. What the heck? But it's a pretty sweet deal for her.
Somewhere in there, we made an offer on another house. Another short sale. It wasn't a house either of us liked, but it was a good price. It had no yard and no playground anywhere nearby, but the house was an adequate size, and, like I said, the price was good. But Oh! My! Gosh! (Eggs! (sorry, private joke. Okay, not private, but you have to read my book to get that one. I only say it, because anytime anyone says "oh my gosh" anywhere around my kids, they respond with "eggs!") the bank couldn't quit screwing around with it. Seriously. Every time we thought we were making progress, the selling bank would start the paperwork process over again. They re-appraised the house at least three times. It may have been more, but, honestly, I quit paying attention to all of it. And, again, we had made an offer that was too high. It was too high because we offered asking price although it needed something like $20,000 in repairs. And the bank couldn't decide to sell! What the heck?!
This went on for three or four months. Until we found the house that we're moving into. It's a little on the small side, and we offered too much (asking price), but my wife actually loved this one. See, it has a playground literally right next door. It's perfect for my daughter. The day they accepted our offer, the bank from the other house came back and said they were ready to go with the offer we'd made on that house. The very same day! What the heck?! We barely contained our laughter and told them "too bad." That house is now back on the market at something like $20,000 less than we offered for it. Stupid bank.
Yes, we're in the process of moving. I know! Fun! Not really. I hate moving. But I'm glad to be moving. I just want the actual moving part to be over with. Anyway, this one didn't come without its moments, too.
This house we bought was a foreclosure. For a foreclosure, it's in remarkably good shape. We looked at a lot of houses. I think all but one of them was either a foreclosure or a short sale. In general, the foreclosures were a mess. You wouldn't believe some of the things people do with their houses. Especially their garages. Most of it illegal. Not necessarily in the "illegal" illegal sense, mostly just building rooms and stuff that they didn't get permits for. Although, we did see at least one house where the garage had been turned into a pot lab (all I can say about that is that they must not have been very good at it considering they got foreclosed on).
That's not to say that there weren't issues with this house we're moving into. The main living space had a horrible color scheme, but that didn't stand in the way of buying. In fact, we thought everything was going to be quick and easy, because the selling bank wanted it done now, basically. They'd already been in escrow twice with the house and had had issues with the buyers, so they wanted to make sure we were going to go with it and set some pretty quick deadlines on things. We were like, "yeah! We can do that!" The quicker the better, right? heh We got all of our stuff done on time and ended up having to wait at every corner for the bank to catch up, because they just wouldn't get the paperwork done on time. What the heck?
Then came the big issue. The appraiser pointed out some areas on the house that the lender wanted fixed before they would release the money. To put this into perspective, both the general home inspector and the pest inspector had pointed these areas out, but they had both said they were really just cosmetic issues and nothing to worry about. But the appraiser saw ugly spots on the house and wanted them fixed, and, as we found out, the appraiser is all powerful under the new system of home buying. If we wanted the house, we had to have these areas fixed first.
But we didn't own the house, and, when banks sell foreclosed homes, they sell them as-is. They wouldn't allow the repairs to happen. We were in a "what the heck?" situation. And we were running out of time. Serious negotiations started. Estimates from some contractors were requested. The selling bank seemed like they were considering it, but the lending bank decided they would make an exception and allow the repairs to happen after escrow closed as long as we made the repairs within 21 days of the close of escrow. We got a date for that set up about a week after the scheduled closing of escrow.
That day came and went. Yeah... the selling bank, the bank that was pushing for a quick close, couldn't get their act together. The guy who was supposed to sign all the papers for the selling bank had gone on vacation and the guy that was supposed to be taking care of his duties was... well, I have no words for what he was. Incompetent comes to mind, but I don't know him, so I don't really know. What I know is that the papers didn't get signed, and we had to cancel the contractor because escrow still hadn't closed. And we'd turned in notice at our apartment complex, so we were losing moving time. What the heck?
Finally, the selling bank got its act together (I think the guy got back from vacation) and got everything signed and sent to the title company. The day this happened, the lender decided... wait... we went through three weeks of negotiations and getting estimates and all this stuff to have these repairs done, right? These repairs that were completely necessary before the lender would agree to release the money for our loan. It was a huge deal, and we had scampered and fretted and all sorts of things to make sure that this was going to happen. The day that all of the papers were finally going through and the lender was releasing the money, they decided, "oh, never mind. We don't actually care if you have those repairs done. They're not significant enough." WHAT THE HECK?!?! Seriously! WHAT THE HECK?!?!
I mean, fine, that's great, but WHAT THE HECK?!?! It's like in high school when I did an assignment (early) but because most of the class was having trouble with it and hadn't done it, the teacher decided to un-assign it. I was the only one, the only one that had already done it. What the heck? This whole thing with the house was like that. Pain. in. the. butt.
But we have a house, now. And we're getting moved in. Painting. We have a new refrigerator coming tomorrow. So, I guess, it's all good.
And there's a park right next door.
Showing posts with label real estate. Show all posts
Showing posts with label real estate. Show all posts
Thursday, September 22, 2011
Thursday, May 19, 2011
Publishing and the Real Estate Market
Everyone knows that the real estate market is a mess. The collapse of the real estate market has been, in many ways, the central issue in the economic crisis in the USA. Banks are now involved as the seller in 50% of all housing transactions. Especially in the lower end of the housing market. That number may still be growing. The problem with the bank being involved as the seller is that the bank doesn't care about anyone other than itself, and, since it's not a person, it cares for nothing more than getting the most money it can at the expense of anyone else involved.
Anyone paying attention to it knows that the publishing industry is a mess. Its infrastructure is collapsing due to technological changes and the growing demand by authors to have more control over their work (When someone like Dan Brown switches from a major publisher to a POD (print on demand) model, it's about control). The publishing industry, so far, refuses to change. It continues to cling to the way it's always done things, and, since it's not a person, it cares for nothing more than getting the most money it can at the expense of anyone else involved.
My wife and I have been trying to buy a house for a number of months, and this is the thought that occurred to me this morning (This is only a thought, a parallel; there is no real point beyond this. I just found it interesting.): the real estate market and publishing are a lot alike, at the moment. In our price range, virtually all of the houses are bank owned or soon-to-be bank owned (short sales (that's when the owner needs to sell the house for less than what they owe on it (usually because they're going into foreclosure))), so we've been dealing with banks more than we've wanted to.
We had an offer accepted on a house a few weeks ago. It's a short sale, so there's a lot that has to happen between the bank (the actual owner (because banks do actually own most everyone's homes)) and the seller (the person (family) living in the house) before anything actually happens with that. The problem is this: one of the inspections shows extensive dry rot in the siding on the house. It may have affected the structure of the house, but they don't know, because they'd have to remove the siding to find out. Will they do that? No. And why not? The current price is a fair price if the structure is intact; however, it's much too high if there's structural damage to the house. Does the bank want to have to lower the price? No. Does the bank care about anything beyond how much they can get? No. It's better for them not to know about structural damage. At some point, someone will come along and either not know to check that stuff or not care about it.
We've run into this problem over and over again looking at houses. Bank owned properties come as they are. Period. In short, they don't care about the actual product they're selling as long as someone buys it. As an aside, the thing I'm finding morbidly amusing is the investors that are buying these houses from the banks, fixing them up, and, then, finding, because the housing market is still in a decline, that they can't sell them for more than they paid for them even after pouring in thousands of dollars to fix them. Sometimes, they have to sell them for less. The publishing industry mirrors this lack of care for their products. They do this by what I'll call marketing genres. Vampires are popular, right now, so, they say to their agents, find us some people writing about vampires. No, we don't care if they're any good, vampires sell. Until everyone gets tired of vampires because of all the crappy vampire books that are coming out. But they'll just move onto whatever replaces vampires.
Then there are the agents. We like our real estate agent as a person. We often have doubts about her as a real estate agent. She keeps wanting us to buy the house she wants us to buy. Insisting that we should look at houses that don't fit the parameters of what we're looking for. And she's always pushing us toward buying at the high end of what we've been approved for instead of the range we keep saying we want to purchase within. And why not? The more we spend on a house, the more she makes. We understand her motivation, and we try to work around it as best we can, especially knowing that that is what we will have to deal with no matter what agent we have.
Likewise, literary agents are, also, interested in their paychecks. It's understandable. However, when you're working for an organization that's collapsing, it can make you kind of desperate. Oh, and if you think agents work for the authors, you really need to look, again, at the structure of the industry. The money stream is from the publisher, to the agent, then, finally, to the author. If it wasn't that way, there would not be various scandals in recent years about agents syphoning money away from their authors to themselves. At any rate, agents are clinging more and more tightly to the publishers and the publishers demands rather than working for the author and/or looking for new things. Publishers don't want new things; they want what's already proving to sell.
I know these parallels aren't exact, but, when I have a bank that wants to unload a house on me that may have structural issues, I'm reminded of some of the books I've read. Here's the thing, though, what's good for me is not what's good for someone else. Most people don't have the standards I do for books, and that's fine for them. Just like, I'm assuming, most people don't have the standards my wife and I do for a house. After all, the house with the special pot lab in the garage sold soon after we looked at it. Different people have different needs. And, well, if the buyer was planning to set up a pot lab, he was getting just what he needed. Cheap!
There is a positive, though, at least on the publishing side: there are alternatives. And, maybe, the publishing industry will evolve itself to meet the changes that are occurring in society (although, I don't really believe that). Authors do have other avenues they can use rather than trying to get on board a leaking ship. Unfortunately, in home buying, there aren't a lot of alternatives.
Anyone paying attention to it knows that the publishing industry is a mess. Its infrastructure is collapsing due to technological changes and the growing demand by authors to have more control over their work (When someone like Dan Brown switches from a major publisher to a POD (print on demand) model, it's about control). The publishing industry, so far, refuses to change. It continues to cling to the way it's always done things, and, since it's not a person, it cares for nothing more than getting the most money it can at the expense of anyone else involved.
My wife and I have been trying to buy a house for a number of months, and this is the thought that occurred to me this morning (This is only a thought, a parallel; there is no real point beyond this. I just found it interesting.): the real estate market and publishing are a lot alike, at the moment. In our price range, virtually all of the houses are bank owned or soon-to-be bank owned (short sales (that's when the owner needs to sell the house for less than what they owe on it (usually because they're going into foreclosure))), so we've been dealing with banks more than we've wanted to.
We had an offer accepted on a house a few weeks ago. It's a short sale, so there's a lot that has to happen between the bank (the actual owner (because banks do actually own most everyone's homes)) and the seller (the person (family) living in the house) before anything actually happens with that. The problem is this: one of the inspections shows extensive dry rot in the siding on the house. It may have affected the structure of the house, but they don't know, because they'd have to remove the siding to find out. Will they do that? No. And why not? The current price is a fair price if the structure is intact; however, it's much too high if there's structural damage to the house. Does the bank want to have to lower the price? No. Does the bank care about anything beyond how much they can get? No. It's better for them not to know about structural damage. At some point, someone will come along and either not know to check that stuff or not care about it.
We've run into this problem over and over again looking at houses. Bank owned properties come as they are. Period. In short, they don't care about the actual product they're selling as long as someone buys it. As an aside, the thing I'm finding morbidly amusing is the investors that are buying these houses from the banks, fixing them up, and, then, finding, because the housing market is still in a decline, that they can't sell them for more than they paid for them even after pouring in thousands of dollars to fix them. Sometimes, they have to sell them for less. The publishing industry mirrors this lack of care for their products. They do this by what I'll call marketing genres. Vampires are popular, right now, so, they say to their agents, find us some people writing about vampires. No, we don't care if they're any good, vampires sell. Until everyone gets tired of vampires because of all the crappy vampire books that are coming out. But they'll just move onto whatever replaces vampires.
Then there are the agents. We like our real estate agent as a person. We often have doubts about her as a real estate agent. She keeps wanting us to buy the house she wants us to buy. Insisting that we should look at houses that don't fit the parameters of what we're looking for. And she's always pushing us toward buying at the high end of what we've been approved for instead of the range we keep saying we want to purchase within. And why not? The more we spend on a house, the more she makes. We understand her motivation, and we try to work around it as best we can, especially knowing that that is what we will have to deal with no matter what agent we have.
Likewise, literary agents are, also, interested in their paychecks. It's understandable. However, when you're working for an organization that's collapsing, it can make you kind of desperate. Oh, and if you think agents work for the authors, you really need to look, again, at the structure of the industry. The money stream is from the publisher, to the agent, then, finally, to the author. If it wasn't that way, there would not be various scandals in recent years about agents syphoning money away from their authors to themselves. At any rate, agents are clinging more and more tightly to the publishers and the publishers demands rather than working for the author and/or looking for new things. Publishers don't want new things; they want what's already proving to sell.
I know these parallels aren't exact, but, when I have a bank that wants to unload a house on me that may have structural issues, I'm reminded of some of the books I've read. Here's the thing, though, what's good for me is not what's good for someone else. Most people don't have the standards I do for books, and that's fine for them. Just like, I'm assuming, most people don't have the standards my wife and I do for a house. After all, the house with the special pot lab in the garage sold soon after we looked at it. Different people have different needs. And, well, if the buyer was planning to set up a pot lab, he was getting just what he needed. Cheap!
There is a positive, though, at least on the publishing side: there are alternatives. And, maybe, the publishing industry will evolve itself to meet the changes that are occurring in society (although, I don't really believe that). Authors do have other avenues they can use rather than trying to get on board a leaking ship. Unfortunately, in home buying, there aren't a lot of alternatives.
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