Homes Are So Much More Than Price!

I hear it countless times every day.

Can you get me a great deal?

They'll start to tell me a story: My husband has a friend who bought a $1.2 million home for $390,000.

It is my experience that my clients and prospective clients love to tell me about their "friends" who got an "incredible deal". They start telling me stories that on the surface sound too good to be true. Usually, when I check out the story, via tax records and MLS data, I find the friend, stretched the story a little.

I am in and out of homes all day long. Additionally, I am running Competitive Market Analysis (CMA) and the numbers for specific neighborhoods frequently. I don't miss much. But when homebuyers tell me the stories of what happened with their friends, I usually find a flaw -- or two with the story. I think this happens because in this market, homebuyers want their friends to think that they did beat the system -- so to speak. It seems to me as though there is a certain amount of competition between neighbors and friends. "We got the greatest deal". "No, we got the greatest deal". So they boast and spin tales that are only half true. The unsuspecting friends who are my clients, believe the story of their acquaintance's. After all, the market is supposedly AWFUL, so why shouldn't they believe these incredible stories?

Are there deals to be had? Well, yes, but everyone's so called "deal" is relative to their own situation. These days, I have heard ALL the stories. I now have a pretty good idea of a "wives tale" compared to the truth.

For example, remember the story about the house that was originally priced at $1.2 million and the buyers supposedly purchased it for $390,000? Well, turn out, that story is "almost" correct. Turns out, the property was a foreclosure -- it was also physically distressed. The price was dropped to $390,000 to attract lots of attention by prospective buyers. Yes, that created a flurry of activity. The bank accepted highest and best offer and looked at more than 25 offers. The buyers actually purchased the property for $790,000. Then, because the property was riddled with mold, had missing appliances, a hole in the roof from a tree and deflected flooring, the buyers had to sink more than $80,000 into the property to bring it up to livable standards.

Was that a good deal? Depends who you are, I guess. The buyers got a great discount off the original $1.2 million price tag, but they had to invest more into the home to bring it up to a livable standard. For my money, the fact that the property had mold, would have been a deal killer. The mold may return in time and make the family sick. Additionally, if / when these folks decide to sell the home, they will always have to disclose what they repaired in the property which could ultimately affect their resale price. Time will tell whether or not this was a great deal. But, right now, their friends believe that these people actually purchased at $1.2 million home for less than $500,000.

All of that to say that Homebuyers are always asking me to find them a “great deal”. Today’s market makes that easier in some respects (prices are depressed and mortgage rates at a lifetime low) and tougher in some respects (there is SO much inventory to look at). Inevitably, though, the buyer’s definition of a “great deal” involves much, much more than just the price of the home. Here are some examples of truly GREAT DEALS (that pardon the pun I would call "PRICELESS"):

Example 1

A young first-time buyer tried his best, but was declined by the mortgage lender for the financing he needed. He had a 5% down payment, but the lender wouldn’t lend him more than 90% of the home’s value. Fighting tears, he told the Realtor he was so embarrassed not to be able to complete the purchase. The Agent asked the seller if he would be able to hold a note for the missing 5% for a year or two until the buyer could arrange other financing. He was happy to, since he could receive interest income on the note and hold a security interest in the property. The fact that the seller also respected the young man for his honesty and integrity probably played a part, too. This was a GREAT DEAL because of the financing terms.

Example 2

A young married couple lived in a small cottage, but wanted to move to a larger home. The buyers specifically wanted a one-story home to accommodate the wife’s wheelchair. Hardwood floors would also be great because the wheelchair battery would last much longer than if the wheelchair ran on carpet. The Realtor showed them a home which met all their needs except that it was about $80K over their price range and the living room was raised up by one step. They kept searching, but nothing compared to THAT house. It even had a beautiful pool which could be used for physical therapy.

The buyers made an offer they could afford which the seller’s politely declined. Time passed and the offer was resubmitted just a few dollars higher. Again, the reply was “Thank you, but no”. A month or so later, a third offer was prepared, again just a little higher than the previous offer. Still no deal. Two months later, the seller called the Realtor, asking if the buyer was still interested in their home. YES! The sellers explained that they had decided to retire and were selling everything. In fact, if the buyers would repeat their most recent offer, not only would it be accepted, but would they like the place completely furnished at no additional cost? This was a GREAT DEAL because of the timing. Oh, and it turned out that the step-up living room floor was a false floor with beautiful hardwoods beneath it.

Example 3

An active family with teenagers needed a larger home. Both parents held doctorates and extremely “brainy” jobs. They had a specific list of needs and wants for their new home – all very analytically done. With their Realtor, they looked at homes meeting all their needs but nothing caught their eye until one day they visited a traditional home with great square footage and all the features they had requested in their search criteria -- and more. That house was a total bore, but the house across the street was a stunner. Unfortunately, it wasn’t for sale.

Not a week later, their Realtor was on that same street with a different client in the car when She saw a “For Sale By Owner” sign in front of THE house as they drove by. Slamming on the brakes (she almost threw the client in the car through the windshield). The Agent jotted down the phone number on the FSBO sign. As soon as the Realtor finished with that day’s client, She hurried back to the FSBO, knocked on the door, explained the situation, looked around, called the buyers and had them rush over with their checkbook. They bought the house on the spot. In fact, the clinical psychologist and the nuclear physicist did CARTWHEELS in the back yard. This was a GREAT DEAL because of instant emotional attachment.

Great deals are different to each buyer. Did they get a great deal for their dream neighborhood or the sought-after school district? Did they get a great deal for the provenance of that home (Frank Sinatra slept here once)? Did they get a great deal with terms and conditions which met special needs? Did they get a great deal on a superbly maintained or beautifully customized home? Did the buyer get a great deal on the breath-taking view from the back deck? When we find what we want and we can find a way to make it happen, it’s a GREAT DEAL.

AND, THAT IS WHAT I CALL "PRICELESS".

Sara Hibbard is a licensed Realtor in the state of Georgia. Sara Hibbard looks forward to assisting you and your family find your "great deal" when the time is right for you. In the meantime, please call Sara at 770-399-8108 or e-mail her at sara@sarahibbard.com with your real estate questions. I'm Glad Georgia Real Estate Is On Your Mind!