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Return of the foolhardy buyer?

Posted by Scott Van Voorhis July 29, 2013 10:55 AM

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"Worried Buyers Would Take Desperate Measures in Today's Sellers' Market."

That's the headline of one of the latest blog posts by Trulia chief economist Jed Kolko.

Sorry Jed, but it is never time for desperate measures, most of all when you are making a major financial decision like buying a house.

As my older brother liked to lecture me when I was a spendthrift teen, a fool and his money are soon parted.

Unfortunately, the number of desperate/foolish buyers is on the upswing, emboldening sellers and driving up prices for everyone, including the more level headed buyers out there.

Two out of three people said they would resort to desperate measures to land a home, a new survey by Trulia finds.

The top three tactics? Bidding as much as 5 percent over the asking price, writing a personal letter and offering to pay the seller's closing costs.

Buyers earning more than $100,000 a year are more likely to favor outbidding the competition, sometimes ready to go 10 percent higher, Kolko notes.

Those making less than six-figures are more likely to borrow from family and friends to come up with the 20 percent down payment or even make an all cash buyer, he reports.

Of course, you have to have friends and family who have money to spare - not everyone has that.

Frankly, borrowing from family and especially friends sounds like a recipe for major problems down the line, but to each his own.

Are you seeing foolish buyers out there? Or am I being too hard on buyers struggling to get a foothold in an increasingly slippery housing market?

What's your take?

This blog is not written or edited by Boston.com or the Boston Globe.
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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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