Do we scapegoat sellers?

I came out of college in 2007 thinking that I'd "missed the train" of the affordable 90's and would therefore never be able to afford a home.

I don't deny a sense of satisfaction from witnessing a decrease in homeowner smugness over the past few years. I feel little pity for sellers who bought in hopes of striking it rich at the expense of those who couldn't enter the market in time.

Chloe feels that I am anti-seller and that sellers are demonized in the media.

All you did was express satisfaction that the perpetrators of bad behavior suffer the consequence themselves, instead of foisting it off onto an innocent party. Shorter Chloe: "Don't be that way. Don't be a hater." Perhaps someone has spent too much time in praise circles winning trophies "Just For Being You."

I get these impressions from reading stories about property owners and sellers that owners who are underwater are shown as totally irresponsible.

That would be because they are. This crisis erupted long before rising unemployment started pushing responsible borrowers into foreclosure. It started because buyers could never afford their houses to begin with. In fact, for certain mortgage vintages, a large portion of borrowers never even made the first payment.

Absolutely there is a bias against sellers. I understand it from you Rona, like you, I was an exclusive buyer agent. It's where my career started and most of the agents had no idea what it was like to be a seller or represent a seller, myself included. Speculation and assumptions were made all the time about sellers and their agents. Having worked both sides of it now, I see a lot of the times we were probably wrong. This is where exclusive buyer agency has its flaws, agents are not exposed to the flip side of the coin and it can be a detriment to the process because there is little understanding. On the flip side, having a buyer agent weigh in on a listing can help sellers price better and I am often consulted by our listing agents for my opinion from the buyer's point of view.

I don't feel bad for these people loosing there homes. They know they could not afford those places. That's why they were renter. People who plan, save money , and put down down payments are not having issues. And for he people who were using their homes as personal ATM machines and not reading the fine print or having someone look at what your signing like an attorney well same on you too. Now everyone else has to pay for this.

You seem perfectly fair to sellers to me. And I've sold many properties.

I think any schadenfreude is not aimed at homeowners (or sellers) themselves, but the culture of unreality that we were bombarded with against all sense and reason, and the fact that this situation drove up prices for everyone beyond what was normal and, as we now see, tenable. You find yourself doing the right things, saving for a home steadfastly and then see a bunch of folks running out and throwing crazy money at crapholes, and after a while you begin to resent the fools who fed the bubble, and pushed up prices. Now, seeing prices fall albeit modestly, you see sellers (both those who have owned their homes for a while as well as those now trying to unload their underwater dwellings) who don't accept that the prices of the last couple years were illusory. I don't blame them for trying to get the most they can for their property, but there is a stink of stubbornness about the whole thing, as if 15% off of peak prices that showed a 150% gain over 10 years should be enough to satisfy those of us who watched the whole thing spin out of control in the first place. Yah, I know we're not going to get back to 1997 prices, but I am sorry, I can do a little math and read a little history, and I don't have the memory of a gold fish. A slight discount off of a crazy overprice still doesn't sound like a deal. So don't try to sell me sunshine.

One thing that grates me is when people seem to fault homeowners who bought at the peak of the bubble and try to get most for their house when selling. Buyers seem to think that owners should be happy to sell at a 20% loss. However, what would these buyers say if the market then drops another 20% after their purchase??? I think they would suddenly be trying to get the most they could out of their house when they need to sell...

Amen, Sean.

As an older first time buyer in waiting who saves and is fiscally responsible yet is still priced out, I have little animosity toward responsible sellers. They're just following the advice of those who are allegedly in the know - grab as much as you can.

My disgust is directed toward the unscrupulous lenders and the devious and incompetent real estate agents that went along for the ride. I began thinking of RE agents as car salesman the day I started seeing pictures of former gym teachers and solid "D" students I went to school with as local "experts" in REMAX ads.

For those who initially bit off more than they could ever possibly hope to chew? Too bad. Same for those who took out second and third mortgages to continue a lifestyle that they couldn't afford. What did they think was going to happen?

I'm not going to rejoice over anyone's fiscal demise and, after having been there many years ago, know the angst that comes with unemployment. But conditions have changed and will continue to. All parties involved in the selling of homes need to come to that realization.

Posters to this blog, in particular the recent one by Sean from West Roxbury, make a good point. While we might not get back to 1997 prices, a growing consensus it that we are in a range of pre-2005 prices -- the specific year is up for debate (is it 2004 prices? 2003 prices?), but it is clear that, even in 'strong' neighborhoods of downtown Boston, prices are on the decline. A corollary to this is the following: if a property was last sold in 2002 for $160,000, and it has not been materially improved (ie, no new kitchen or anything that added value), there is no possible way that the seller is justified in listing it for $250,000 in today's dollars. Sellers breed resentment among buyers by insisting on 2006-2007 prices. I am a prospective buyer of a 1-BR condo in Back Bay/South End/Fenway. A simple scan of these properties (with specific attention to when they were last sold, how much they sold for, and any evidence for substantive renovation/improvement) indicates sellers are still expecting too much of a premium when selling their property. Of course, sellers don't want to take a bath and lose money on their investment. But buyers are unsympathetic because they know they can afford to wait, and sellers that really want to sell will have to capitulate eventually.

Rona, I agree with charles. You're fine as to sellers. Of course, sellers and non-selling owners regularly get lambasted by the renter and anti-stimulus posters -- with regular rebuttal from secure owners. The exchange sort of reminds me of the "Ice Cream" song by Eddie Murphy.

There seems to be a general mentality (over the past few years, since the real estate correction began in 2006). I'd like to refer to it not as "Buyer's Remorse" but rather "Buyer's REVENGE.”

I have listed a condo that I own in Boston. It has been on the market for about six weeks. Many, many showings – heavy traffic volume. I am not in a dire position where I have to sell it – if it sells, great – if not, I will ride out the correction until the market turns and try again in 2010. I’m priced very competitively, and I just dropped by $10K.

I just got my first offer this week: 13% under my asking price ($40K below my listing price). My reaction: ARE YOU F'N KIDDING ME? I didn't even respond.

Buyers: wake up! I understand you’re upset about sellers having the advantage for all of these years. I understand you’re trying to get a “good deal.” But please don’t insult us, and don’t waste our time. We are not all desperate sellers that are going to be foreclosed on. I’m a responsible homeowner, gainfully employed, dutifully paying my mortgage every month.

Now is your chance to choose from lots of inventory, in a market that has held up well (compared to the rest of the country) in an excellent interest rate environment, with tax incentives for first time buyers. All economic indicators are pointing to the bottom being here NOW – not next year. If you sit on the sidelines for much longer, you will definitely miss out and regret your decision. It is time to pull the trigger.
Se

Boston Seller . . . you're going to get hammered for that post. Having been in your situation, however, I'll simply say that you made a big mistake. I did the same thing back in late 2007 . . six months later, after the value of my property had dropped by $30K, I jumped on the next offer which was well below the initial "insulting" offer - my property value had decreased so much in that amount of time. You're going to regret not responding to that potential buyer - the value of your house could very well drop $40K before you even get another offer.

I have to say I agree with Boston Seller. I bought and am responsible, I had 20% down and I can make my mortgage and other monthly expenses just fine thank you very much. However my life has progressed and not stagnated like the market so yes I want to sell, and have listed at 20% less than what I bought it at while replacing the windows and replacing the cabinets and counter tops in the kitchen and flooring through out the first floor (so that means I am not recouping that upgrade money I spent). So yeah I will take a loss I get that, but I won't be hosed so I will wait for an offer and that is fine, I did not put myself in a position to be pinched.

I don't understand why people are mad at sellers like Boston Seller. If you want to vent, take it to the Realtors who list properties at 2005 prices. Or better yet, simply don't buy an overpriced property. If Boston Seller's property is priced correctly, it will in all likelyhood sell within 3 months. He doesn't seem to care it he sells it, so why should anyone else?

Boston Seller - in this economic environment, you may regret not taking an offer that was nearly 90% of your asking price. It's cool if you don't need to sell and aren't in a tough situation, but if that's the case, why bother listing? Do you want to move to a bigger place, or are you just testing the water? I've recently started to look, and I can very quickly determine the difference between someone testing the waters, and someone who needs to sell - those who need to sell have much better prices. I went to a number of open houses this weekend. I saw 2 houses at $1mm, and one just over $800k. Guess what? The one closer to $800 was the nicest. And it has been on the market for about 6 months after a number of reductions. I don't know your circumstances, but if you're like the person with the $1mm listing that I can get at $800k, your place just won't sell.

Hindsight 20/20 - let the hammering begin! I stand by my post.

Boston seller, I think that was very unwise - you should have taken it. Do a little research - nothing points to the real estate market being near bottom. A change in inflection points is not bottom.

Most analysts, including the govt, expect the real estate market to keep dropping through 2010.

Frankly, the truly crazy one was the person who only offered a 13% discount. That used to be the standard opening years ago.. The close to full price offer was a thing of the bubble

I've got nothing against sellers trying to get the most they can - thats capitalism. What I object to is the sense of unreality in the analysis. I won't be buying for several years no matter what, but analytical rigor is an obsession for me

hindsight:

Why should Boston Seller get hammered for not wanting to get screwed by unrealistic buyers? Oh, right, probably because many of the commenters here fall into that category. If you want $100,000 houses, move to Tennessee.

Also, just because you had a bad experience, doesn't mean Boston Seller will. Every sale is different, and despite dire warnings about Boston real estate, the fact remains that it has held up much better than the suburbs, and most likely will continue to do so.

Is it buyers revenge, or are they now able to see a little daylight for a change? It's kind of ridiculous to be insulted when buyers are just trying to take advantage of todays current conditions just the same way sellers did in the run up all the way to the peak.

As a potential buyer I'm uninterested in offending anyone when I finally do make an offer. My offer will be based on my own personal financial circumstance. And you better believe - in this climate - I'm going to reach a little. I think it's more a case of sellers who aren't desparate to do so (like Boston and Dracut) being caught up in a collapse.

Boston Seller has a condo that's been on the market for six weeks with loads of foot traffic, a price reduction of $10k and still only ONE unacceptable offer. Surely, you must've been expecting an offer that was at least 10% below asking price. Look at what's going on around us - unemployment still rising, gas prices increasing again and the impending tax hikes that are on the way.

For Dracut Seller, if you bought at peak and are trying to sell now, you absolutely put yourself in a position to be pinched.

Maybe it isn't so much the buyers that need to wake up.

its a triple threat here. Many of the sellers that cashed in owned there home for 20-30 years paying anywhere from 17-90K for their house. Why is God's good name should they get 500-1 million for an old house. Unless they added a VERY expensive addition that cost hundreds of thousands. its all greed. Owning a house is so you have a place to live and raise a family. Housing is NOT an investment. When we started marking housing as an investement we ened up in this debocle. For some reason buyers thought because they made over 100k a couple they could afford a half a million dollar house. No no you cant. do the math. esp is you have kids. And these mortgage people pushing crazy mortgages to make uneducated people think they could afford these houses. come one. But still many people were educated. its basic math here. If people just said no im not paying those ridiculous prices then sellers wouldnt ask so much now would they. its the same thing that happened with oil. it went nuts we stopped driving so much. oil sat. oil prices fell. hmmmmmm

Boston Seller:
13% below is a starting point. Be happy you got an offer in this market. Hindsight=20/20 is spot on. In 2010, you'll be pricing it at 40K less and then see what you sell it for. If you don't want/have to sell, pull off the market. It's a lot of effort for no skin in the game. If your interested party really want your house they'll meet you in the middle and maybe north of that.

Boston Seller, you are a perfect example of the kind of seller this blog has spoken about frequently. Now, perhaps you priced your condo appropriately--you didn't give us any information on that--but your assumptions are rather radically out of sync with reality.

I am not in a dire position where I have to sell it – if it sells, great – if not, I will ride out the correction until the market turns and try again in 2010.

Where did you get the notion that the market will "turn" in 2010? You certainly didn't get it from any reputable economist. No one expects appreciation to return in 2010. In fact, there has been a lot of analysis suggesting 2005 prices will not return for 20 years, unless the US suffers massive inflation. And prices do not "turn around" when sales volume does. First, new home sales reach a bottom; then, existing home sales bottom out. Some time after that--usually, several years later--prices reach their bottom. We are nowhere near that point yet. So if you are not in a "dire position" for a decade or two, then you are in great shape. But if you need to sell next year, you will probably sell for less.

I’m priced very competitively, and I just dropped by $10K.

The market made clear that your original asking price was too high to begin with, so you don't get a medal for lowering it to more realistic levels.

13% under my asking price ($40K below my listing price). My reaction: ARE YOU ** KIDDING ME? I didn't even respond.

You could have tried to meet the buyer halfway, and perhaps you would have sold for only a few percentage points under your asking.

But please don’t insult us, and don’t waste our time.

You don't seem worried that your asking price is obviously insulting to your buyers. After all, buyers have no intention of giving their down payment away. The misplaced sense of entitlement is wondrous to behold.

We are not all desperate sellers that are going to be foreclosed on.

What difference does this make? You can wait all you want. No one cares if you sell your house except for you. But other sellers are increasingly willing to make deals, and prices are set at the margins.

I’m a responsible homeowner, gainfully employed, dutifully paying my mortgage every month.

Again, none of makes your house worth more. Who cares?

Now is your chance to choose from lots of inventory,

Actually, we've had a lot of discussions on this blog about how slim the pickings are. Most of what's on the market is junk, and almost all of it is overpriced.

All economic indicators are pointing to the bottom being here NOW – not next year.

No. There are no indicators remotely suggesting prices are near the bottom.

If you sit on the sidelines for much longer, you will definitely miss out and regret your decision.

Now you really are insulting buyers. They're not that stupid.

I'm sorry to say, but you posters that are waving the "take the offer now" and “you made a mistake” flags are on crack! Please let me repeat: I DO NOT HAVE TO SELL. I purchased the property with a 25% down payment - I have no problem meeting my monthly mortgage commitment. I will ride this out (for a year or two if necessary) and be patient until I get the price I need. I am not a flipper, or an irresponsible homeowner.

This market has been on the downward trend for over three years now…the worst of the decline is behind us. It is going to level off this year, and the rebound will begin in 2010. Can I expect 15% - 20% returns over the next ten years? Absolutely not - nor would I want to, as that isn't healthy for the housing market in the long term. But to accept an offer now that would cut my initial investment by 50% is ludicrous! That is a guaranteed loss.

rona, thank you for addressing my comments in this blog post. my main issue was all the hostility that flies around on here about sellers, and i found your comment about being "pleased" that sellers were "harmed" quite distasteful. lots of angry people hiding behind the anonymity of that blogging name and venting. "real estate rage" but i do appreciate your addressing it.

i find it interesting to see how many people are "demonizing" Boston Seller. i read somewhere that about 90% of homeowners are fiscally-responsible people who are not in danger of losing their homes. i was a seller in the market last year (it fell through on the appraisal because of three estate sales around the corner from me), but we bought with 20% down, have maintained and updated our home, and it is way nicer than the stuff sitting out there. i do believe that the media has egged on this idea that all sellers are desperate to sell and that now is the time for buyers to move in for the kill. all i wanted was fair market value for my home, and i priced accordingly. but we still got ridiculous low-ball offers from angry cut-throat buyers. and really, prices are awfully good right now (compared to what we paid) and interest rates are phenomenonal.

here is one example of a cut-throat buyer. a friend recently sold his very solid well-maintained home. one of the first crazy offers he received for his 2000 square foot home on 4 acres of property in a very desireable town on a lovely country road was a low-ball price (double-digit percent below his reasonable asking price), and they wanted a dozen thousand dollars at closing for an addition and for him to put in a new septic system to handle the fifth bedroom. what? i can't believe he even gave them the courtesy of a reply. i hope they paid what they wanted to pay and i am sure they ended up with nothing even close to this property (or maybe they are still renting if that is their approach).

we had one buyer who loved our house but walked away because they did not like the colors of my decorating scheme -- it's paint, people! part of the fun of owning a home is being able to paint the walls your very own colors. meanwhile i have a lovely home with a new roof, new appliances, new heating system, a huge finished basement in a family neighborhood on a cul-de-sac abutting conservation land in a town with great schools and WAS ASKING A REASONABLE PRICE.

based on some of the responses here, i would say there are a lot of entitled buyers out there who are angry that properties are not cheap enough for them. i am going to guess it is the generation about 10 years or so younger than me. but it really doesn't work that way. and in some markets, the prices are stable and even going up -- "real estate is local". you can't believe all the newspapers.

sellers or buyers -- we are all human beings trying to live a good life -- i hope. and really all that negative karma will come back to get you.

charles,

I believe if you wait *several* years the curve will be on the way up again. Do you mean a *few*?

Boston Seller,
I don't understand why you are insulted by the offer. The potential buyers just gave you free information on where the market is.

The housing market is two sided and prices are set when a willing seller and a willing buyer meet at the same price. You did your research and came up with the price. The buyer did the same.

Now you have to decide/ determine if the buyer came up with the price based on the same information as you or did they incorporate other factors.

Given the amount of traffic you claim, coupled with a price reduction so early in the process it sounds like you will sell at your price and not a market price. Unfortunately, you cannot dictate a price to the buyer as they cannot dictate a price to you.

BTW, did you go to the NAR website for that last paragraph? Most of that garbage has been debunked on this blog.

"I DO NOT HAVE TO SELL"

I DO NOT HAVE TO BUY!

BS,
You said $40m is 13% off your asking price - which indicates you are listing around $340M. If $40M below asking price means you would lose ~50% of your initial investment and you put 25% down, then you bought the condo for ~$320M.

So the real question is:

Why do you think you are entitled to return on your investment when prices have clearly declined throughout the region?

Chloe,
The fair market value is the price at which a willing seller and a willing buyer transact. Two rational people can look at the same information and come up with different viewpoints. It does not make the buyer cut-throat just as it does not make you greedy.

Your home is just a house to the buyer. Your sale fell through because there are substitutes for the buyers presumably at better prices. This is the paradigm for buyers now: rates are low and government policy is to keep them low for the foreseeable future; the housing cycle is still correcting (see Marcus above); there is likely to be more inventory coming online. If this paradigm is remotely accurate, then prices will either fall more or stay low. You cannot fault a buyer for not wanting to lose money on a home shortly after moving in.

i wonder if there is anger about this towards one another if we are talking about retirement money losses?

i really don't think this comes down to money, all this anger. i think it comes down to a perception of haves and have-nots, the people who own homes and the people who don't and who would like to.

there will always be people who live beyond their means, even renters (and that is why some cannot save for a house down payment). but why so much anger?

we invested a lot of our money in our home, and the loss is painful if we were to sell it, it would be like starting all over. the same has happened to the money we havd in our employer-based retirement plans and our kids' 529s. is there anger there? did we expect too much? were we being greedy?

humanity and generosity in these difficult times and coming to an understanding of the other perspective will lead to fairness in anything you work towards, whether buying a home or raising children.

WSJevons, my sale fell through because the lender did not even send an appraiser (they used an underwriter -- the appraiser never set foot in the house) and compared my home to houses that were in major states of disrepair based solely on square footage. our buyers had seen all those houses, and wanted ours, and they were willing to pay a price that we were happy to accept -- we had reached an agreement and signed a p&s. we had also seen all the houses used as comps -- i knew what poor condition they were in. the lender did not want to make the loan -- i do not know what our buyers' credit picture looked like or anything. both realtors were outraged by the way the appraisal was handled. the buyers were fha and could not override it.

they were just as upset as we were, as was the seller we were going to buy from (we wanted to downsize to a tiny house near Worcester where i work to start saving more for our kids' education) -- it was a lose-lose all around. and no it was not just a house to them -- they had already envisioned themselves living here, had enrolled the kids in school and selected paint colors for the rooms. to them it was already a home.

Boston Seller makes some good points and not every buyer or seller of most any product is ever in the same boat. It boils down to timing, needs and motivation of both parties.
However, I read in the Wall St. Journal, Bloomberg News, The Economist, etc. warning about a parallel subprime market that has emerged over the past year -- all made possible by the Federal Housing Administration. This won't end happily for taxpayers or the housing market.

FHA now insures nearly one of every three new mortgages, up from 2% in 2006. According to the Mortgage Bankers Association, more than one in eight FHA loans is now delinquent -- nearly triple the rate on conventional, non-subprime loans. Another 7.5% of recent FHA loans are in "serious delinquency," which means at least three months overdue.
Warren Buffet last week said “there is no sign of any real bounce at all in anything to do with housing or retailing for this year and probably next as well”. The U.S. economy contracted at a 6.1 percent annual rate in the first quarter, weaker than forecast, making this recession the worst since 1957-1958.

Everyone knows that a new wave of foreclosures in the higher end market – over 700K – has started to hit the market. There had been a moratorium on foreclosures which has now recently ended and many banks have been sitting on the sidelines for the past year or two. Those Bank owned homes (REO) are going to increase inventory and further drive down prices, so any chance of a recovery next year is just wishful thinking. I wish it wasn’t the case, but those are the facts.

Well, it seems I have created some fans here - and some (very harsh) critics - particularly Marcus. Too much time on your hands, sweetie...

The postings seem to reflect my original theory: buyers have become BITTER and want a rock bottom steal - I have to tell you, darlings - it aint gonna happen in Massachusetts...but good luck trying!

Chloe,
The condition of homes really doesn't matter on the macro scale. There will always be people willing to rehab less quality homes at below comparable prices to sell at a comparable prices. When they do, it diminishes the price you can earn - even after adjusting for the effect on comps.

If you house was priced to market, there should be a similar offer on the table in a reasonable time frame.

I hope you sold your house or found a new agent.

"My reaction: ARE YOU *** KIDDING ME?"
"Buyers: wake up!"
"you posters that are waving the "take the offer now" and “you made a mistake” flags are on crack! "

You seem to be very emotional about something that should be viewed as a business transaction. That never leads to sound decisions. I also wonder if placing all buyer in the same category is sound logic. People have different situations.

WSJevons -- thanks for your reply. we did not sell our house -- the timing with the school year was too close and my daughter was starting high school, and our move was to be to another town. we were all worn out by the whole experience.

this year, i am having an independent appraisal done first -- and then we will decide what to do (waiting for the results this week). we don't NEED to sell, but want to move.

there are six houses in my neighborhood currently on the market -- three went under agreement with P&S signed in the past week. things are moving here -- just want to know if we can afford to do it.

I saw nothing bitter about Marcus' post, he nailed it! All Boston Seller can fire back is a condescending attitude, and her theory that RE is at bottom. Just because we are the lowly "buyers" doesn't mean we are going to throw away our downpayment on a depreciating asset. You may have your RE, but we have the cash, and a market that's still on it's way down.

Sellers are still nuts. I think they have remorse from not selling during the bubble, they think they can price just below the peak paper and get some nibbles.

Many of these homes have 20 year old kitchens, hardwood floors that have never been refinished, rotting roofs. These people are crazy--your house is a teardown, not a bargain. Who wants to move into a dump? No wonder new construction homes are still selling.

We just sold, slightly off the bubble, but did well. We had made our house nicer than anything we've seen lately. So we're stuck renting until we find a new construction home we can afford or else find a house that needs upgrades but isn't a dump which we can then remodel.

I just saw a chart of the new unemployment claims. The rate of new claims has reversed course--meaning we just a little more than halfway though the decline, and the number of people out of work will not quite double from today. That's a LONG way to go! Prices will continue to fall at least two more quarters, until the re-hire begins.

I for one have taken my home off of the market. It will not go back on until I see dramatic changes. The buyers and realtors think all of us are desperate! There will come a day when all of the foreclosures and short sales have been snapped up--then the market will turn. We will have our revenge!!!! If you want my house---You will pay what's it's worth and not a penny less!!!

I think all of these emotional posts, buyers and sellers are a screaming advertisement for why agents get paid what they get. We have to deal with this on a daily basis and keep the transaction professional and businesslike all the while knowing that you might not get paid at all.

I think we have some examples here of sellers' attitudes. Many have become completely unhinged with personalized rage at what is, after all, an impersonal market force. Do you scream at your neighbors when it rains on your picnic?

It will not go back on until I see dramatic changes.

Oh, you will see dramatic changes, Agnes, you will. Just not the ones you are hoping for.

i think a number of you are anonymously clicking that submit button with a ton of suppressed "real estate rage". based on the posts that followed rona's initial posting in response to her and my exchange, i continue to believe that the media, and that particular comment from rona, are mean-spirited towards sellers, fo rno reason other than there are many buyers who are frustrated from years of renting and feeling priced out of living in desireable areas and they think now should be their chance. for years there have been reasonably priced properties in many areas, just not Newton, Arlington, Waltham, Brookline, etc. i don't live there either because we cannot and never have been able to afford it. do you hear me griping? no.

i know rona said to keep it not personal, but Marcus, you, my man, have an attitude and i suspect it has less to do with real estate than hiding behind that computer. i do hope you are never my neighbor :)

I hadn't realized that there was such seller rage out there.

I mean, so what. Someone lowballs you. What's the big deal. Say "no thank you." But if all you're getting are "lowballs" then perhaps it's time to rethink what you're asking for since they are no longer, by definition, low, but rather are quite average.

The reverse goes for buyers. If you're continually offering low cuz you think prices are going to continue to drop and you want to build in some buffer, but no one is accepting your offer, then you'd better kick it up further.

For me personally, I made an offer 10% below asking on a SFH in Dedham that got rejected. They wanted $470. We offered $440. They didn't say they were insulted, but it was obvious from their counter ($465) that they thought we were way below. Flash forward 8 weeks and they are re-approaching our agent, and sniffing around for the $440 - which we didn't reoffer since the market had further deteriorated and I didn't believe it was even worth $420 (and dropping). They eventually found someone to take it at $440, and I'd be surprised if it appraised for $400. So, I don't know what that means, but it does show that those of us who think that prices are / were overpriced are not purely delusional bystanders.

"Many have become completely unhinged with personalized rage at what is, after all, an impersonal market force. "

Many buyers seem to have same bitter, personalized rage too! Just take a look!

I think it's silly to point fingers at either buyers or sellers. Remember, "it's not personal, it's just business"? Here's the thing. There is no such thing as intrinsic value in property. A house, or a car, or a piece of jewelry, whatever, is worth PRECISELY what someone else is willing to pay you for it. No more, no less. If I think my house is worth $300,000 and nobody offers me more than $200,000, it's worth $200,000. A lot of sellers don't get this simple concept.
Boston Seller's comments are a prime example of why buyers are laughing in some sellers' faces. Yeah, you can predict the future and we should all rush to make a ridiculous offer on your place now. Nobody else cares if you sell now, either.

"We will have our revenge!!!! If you want my house---You will pay what's it's worth and not a penny less!!!"

Revenge? Since when did market forces become personal?

Geez, Agnes, get a grip on reality. Of course buyers will always pay for what the house is worth. The market told you that your house wasn't worth that magical number you had in your head. The market may have a different story in the future. Maybe not.

A word of advice: You might want to check that attitude at the door. Some buyer is going to get a whiff of that and run the other way. No one wants to do business with arrogant seller. Too many other homes on the market with more realistic sellers.

BS, why do you feel insulted by a low offer? It doesn't sound like the bidder was trying to say that you had a low-quality condo, just that he felt that the market was lower than you did. If you think the market is on the verge of recovery, by all means, wait before selling, especially if you view the condo as an investment. Why sell an investment at the bottom if you don't have to?

Chloe, you say the same things over and over, and it's pretty clear you don't listen to what other people are saying to you. Perhaps that's one reason why you can't sell your house. Rona explained quite clearly what she meant; other commenters have done the same. Yet you continue to put words in other people's mouths, and blame your difficulties on other people's shortcomings.

Maybe you should stop the silly psychologizing and start listening and learning. The market told you something. So have we.

"i continue to believe that the media, and that particular comment from rona, are mean-spirited towards sellers, fo rno reason other than there are many buyers who are frustrated from years of renting and feeling priced out of living in desireable areas and they think now should be their chance."

Ahh, yes, those renters again. Jealous that they can't have the good life and are now taking it out on the poor sellers. I'm a renter, who may buy, but I'm also in no rush. One month, two months, two years, whatever. No frustrations here. I'm saving money renting a comfortable home. While all of my friends were buying over the last five years, and talking endlessly about the value of their places increasing, I was thinking thanks, but no thanks. It didn't make sense then and I'm not going to buy into it now. Not all, but many, people made some foolish decisions. I'm sorry, but It's not my job to bail them out.

In trying to prevent this discussion from going toward personal attacks toward particular buyers or sellers, let's consider arguments that each of these sides might use to justify their listing prices (for sellers), and the offer prices (for buyers). Certainly many sellers are confident in their employment, ability to make payments, etc., and have equity and history in their homes. They will point toward recent price drops, say that the worst price drops are over, and that things will be rebounding soon.

However, let's consider the side of the buyer. There are a limited number of buyers with strong enough credit and sufficient assets to purchase a home. Speaking in general terms, this economy has made people less prone to impulse buys: purchases, particularly purchases on the magnitude of a home, must be analyzed for whether they make fiscal sense. It has been stated that the fiscal shape of the seller does not inherently increase the value of that seller's property, and I would agree: sellers have to realize it isn't personal, it's business. Even if a particular seller doesn't want to sell low, other sellers down the block, in more desperate personal financial situations, are happy to do so. This does drive down comparable sales, and consequently all sellers are impacted by this desperation sooner or later.

And let's remember that the economy is still in terrible shape. I'm not an economist, my last name is not Geithner or Bernanke. But big changes are happening, with more afoot: Chrysler is in bankruptcy. GM is likely to follow. Automotive supply chain mainstays may follow. This is not a limited-to-the-Midwest problem . . . particularly as total job losses in a number of sectors around the country continue to pile up. The nature of this uncertainty leads many buyers to believe that the bottom of the real estate market is still yet to come. No one wants to buy on the way down, so buyers are asking sellers to give them the bottom. The sooner we get to the bottom, the more certainty we can have that things will rebound. Buyers know that there were substantial real estate value drops in the early 90's (even in strong neighborhoods in Downtown Boston) . . . and since this economic downturn is more serious, it's a reasonable expectation to expect at least a repeat of that real estate downturn before our current recession is over. Sellers say "that may be true, just my home is unique because it's owned by me, and it's worth more because I'm not desperate." Buyers say "if you are selling now, you are lumped in with everyone else, and if you don't want to sell at the price I'm offering, I'll find someone else who will." Prices will go where they go, and let's just remember that it isn't personal.

Chloe: Give it up. There are one or two people with major attitudes on this site. Consider them the side entertainment and try not to respond to their drivel.

Downtown Dan: Very insightful, but I would add one more bit to the buyers. I am not sure they all think "my home is unique". I think many just think "if you don't want to buy it, fine, don't buy it." And I agree 100%, prices will go where they go. As an example, a family member owns a piece of build-able land in Medford. He put it up for sale, and got a bunch of offers lower than he wanted. He decided that since he didn't need to sell, he would just hold on to it. Doesn't mean that he thinks it is special, or unique...just that he chose not to sell it at the price that the market would bear. And I can assure you he is not bitter / angry / etc.

Boston Seller: What makes you think prices will not fall more? Please share...

May, thanks for your comment. I do give up! And I am definitely not the psychobabble feel-goody kind of person Marcus seems to think I am, not do I understand why he and others fling personal insults around on here. I would value an open discussion with new points of view. Not getting it here!

My house did not sell because my buyers were not qualified. Period.

It is unfortunate that we are all pitting ourselves against one another here, because I don't see how the economic picture gets better if we are at one another's throats. Personally, as someone who grew up moving around all my life
until we bought our first house 12 years ago, I would rather rent and have the flexibility of mobility and live without the burden and expense of maintaining a house. My husband was the one who wanted the house in the 'burbs.

Anyway. Thanks for the comments everyone -- looks like Rona and I certainly ended up stirring this pot!

#40

right on, nf, right on.

Grief...I am a renter, looking to buy for the first time.

I see a lot of anger from both "sides" here. There is anger from:

a) Buyers, who are RIGHTLY pissed off that the "hyper" over-inflated market of the last 5-6 yrs has left those of us who were "sensible" and didnt get into the market during the GAGA days using all those exotic mortgages, locked out of the market for a long time. Now finally, TWO years after the bubble burst, we RIGHTLY expect sellers to understand that the price for a house should be equal to what it would RENT for, based on the mortgage for that house. (No more "ownership" premium, due to the market going up 7% a year)

b) I see a lot of anger from sellers who either bought during the GAGA days, who expected to have their property ONLY appreciate in the coming years, and now woud have tp sell at a LOSS, or those who are just pissed that they didnt sell eariler because they thought that the market would keep going up.

My opinion. The market has dropped about 15-20% from the peak, AND is going to keep going down thru 2011.

My YAHOO stock was worth $150 a share a few years ago. Now its NOT. Thats life.

.

People should read what Marcus and WSJevons wrote above over and over until they understand it.

It isn't slightly bitter. There is a moderately frustrated tone, which I completely understand, as they are attempting to provide useful information and some people seem like they are willfully ignoring it.

But if you are looking to understand the housing market, its a good place to start.

Though economists are predicting a continued decline in prices I have been a little surprised to see a small rebound in prices in the little neighborhood where I live.

While last year's sales prices dropped significantly in our neighborhood (15% off the peak price), spring sales prices are rising. One home in my neighborhood just sold for nearly the askign price (less than 5% off the peak 2004 price) in less than a week. A second house, which was priced competitively, sold for more than 10% over the asking price. I will watch with interest to see if these sales are a fluke, or the start of a trend.

Chloe -

I know this post is late, and I might not get a response because the thread is dying, but I'm genuinely curious about your reaction to Rona's comment. She defended herself accurately, I thought, and pointed out that it was the tactic she was glad to see fail. You haven't really addressed this - do you think that the "hurry-up" strategy is a good one? Did you use it when your house was on the market? Do you think it's fair to ask buyers to make 300K + purchasing decisions in an afternoon?

Because I have to say, this is one tactic that I would LOVE to see die a slow, painful death. It is absolutely absurd to expect buyers to make purchasing decisions in an hour. It was one of the most ridiculous aspects of the housing bubble, and I'm personally glad to see that kind of manipulation might not be working anymore.

sophia, to answer your question, no, i do not think the tactic is a good one. in fact, i think it is unethical, and should be considered in violation of the realtor's fiiduciary responsibilities to their clients, on both sides. and i agree with you, it was a problem during the housing boom -- in our town (which is small and desireable), if a house came on the market, it was snapped up in a week if it was in decent condition -- our current home had been on the market 48 hours and had seven actual offers (ours was one of them) -- the "hurry up" was in fact real and no tactic. but i acknowledge that buying/selling a house is a business transaction, and the salespeople involved (whether on the buyers side or the sellers side) will often use whatever tactic necessary to close the deal. there are ethical realtors out there, but right now there are also a lot of very hungry ones who need to make a living. i personally prefer transparency and honesty, and have been both a buyer and seller twice, and have tried to be nothing but forthcoming and upfront (and respectful) with my buyer or seller (despite the realtors sometimes).

in fact, last year when we were working on selling our house, it was in fact our listing agent who was pressuring us into quickly accepting the offer from our buyers who turned out not to be qualified. and when i asked for additional information to bring me comfort about their qiualifications (based on my attorney's advice) she refused to get it for me (we did end up switching realtors -- she also warned me about looking for homes in certain towns "because my kids should not go to school there" -- i was horrified). we got hurt by the tactic because there WERE at least two other qualified buyers who wanted to make offers but by then our house was under agreement, and then it all fell through and our prospective buyers had moved on.

my issue with rona's words was that she said that she was pleased the sellers were hurt by the tactic. i really don't wish to see anyone or any family hurt by any of this, and it really bothers me that the idea projected by the media is that we are pleased, smug, whatever, that "other people" (never ourselves) are to blame and "deserve" to come to harm. people in glass houses, in my view. sometimes people make foolish or rash decisions, but should we really be "happy" when they fail? awfully mean-spirited -- sounds look a call for better consumer education and protection practices. i think the individuals are getting dumped on with the burden of the blame, when the lenders deserve far more responsibility for not advising their customers of their rights to legal review. when we bought the house we are stuck with now, our lender told us we could borrow up to 200K more than we did -- our reaction was "what????" as the monthly payment exceeded our comfport zone, and we stayed well within the boundaries of affordability. however, if one of us were to lose our job, or if we get divorced (which is more likely) we would be in a tight economic spot. stupidity? no, i don't think so. the truth is most homes in this area require two incomes to purchase and maintain. we live well within our means now. would some of the potential buyers out there be delighted to profit from the heartbreak of my divorce and the effects on my kids of moving out of the family home? i guess so -- i can picture the realtor whispering -- "it's a divorce, they must be desperate to sell" and our realtor saying "you need to sell, take this offer, you don't know if you will get another one".. in fact, i guess there are even some who would use the "hurry up" tactic to get me to agree to something that would not be a win-win for anyone :)

this all being said, i don't agree with the homeowners bail-out (making homes affordable). and i find it slanted that homeowners like myself who (so far) are responsible, have never missed a payment, have not treated our home equity like a piggy bank to support a lifestyle we could not afford, and who have great credit, don't get some sort of credit for not contributing to the problem (i will get a lot of bs for that comment!) i think we are replacing one "program" with another and not addressing the problem -- the folks in question for the most part probably still can't afford their homes.

thanks for your comments, sophia.

Chloe, re: your last paragraph there in #59:

For what it's worth, I think you do deserve credit for all of the things you point out about you being a responsible home buyer - let's say it makes you a "traditional seller" rather than a "bubble seller". Not all sellers are in the same position, and it must be frustrating to deal with buyers who want to pay much less for your home.

But (and this is admittedly from the point of view of a first-time buyer) that doesn't mean a current buyer should pay more for your house- banks are not going to finance the purchase for more than it's intrinsically worth, and that's part of your problem:
the prices for EVERYONE were too high during the 2000s... so everyone selling shares in the pain of the bursting bubble.

Even if you were a responsible buyer (as opposed to the many irresponsible people who overreached/got tricked into it), one who bought after 2000/1 probably paid too much - it's not a buyer's job to continue to do so.

jchristian, i actually do agree with you -- i know that housing prices have depreciated, and i think it is great that there are now buyers who may be able to afford a home for the first time (if the battered and troubled banks will give them a loan, but that is a whole other story).

i just don't understand the animosity, that's all. all this mean-spirited hostility and pointing fingers makes me as a person uncomfortable. i am not a smug seller. i agree that the market is what the market is. i own a nice well-maintained house, and priced it according to market and had no fewer than four offers, plus two who did not because it was under agreement already.

i never expected anyone to pay more for the house than what the buyer wanted to pay and what we agreed to sell it for.

i hope that the birght side to all this is that there will be qualified buyers who will get to own their first home. from my point of view (and this has nothing to do with the market, and everything to do with my personal need for freedom of movement) i find owning a home to be a burden and something that consumes an insane amount of our time, and which keeps us pinned in one place.

but i appreciate your comments -- i got bombarded with some nastier ones :)

good luck to you -- i hope you find a nice home.