I have recently had the pleasure and nightmare of buying a home and the experience has left me jaded. My wife and I took a year and a half searching for the right home and along the way were lied to and at least attempted to be ripped off by every angle of the real estate community. And people think lawyers are bad?
Anyway, people tell me the real estate profession was not always this way. Custom home builders were raising their price estimates by some forty thousand dollars every time they estimated how much I could pay, and bigger builders insisted on putting big houses on postage stamp lots and refused to allow any type of customization. I saw many sellers of existing homes in desperate positions to sell homes, but refusing to lower their asking price to a reasonable value. I don't completely understand that one, because the homes continued to stay on the market despite their "desperation" to sell, but someone told me that too many people have been buying homes with zero down and later cannot sell the homes without losing money unless they significantly raise the value of the home.
And let me tell you about the real estate agents.
First and foremost, the industry has a new scam in order to increase revenue. Its called the customer service fee. Agencies have been charging a small fee, usually around three hundred dollars, to "cover administrative expenses." It's a scam. Don't sign any representation agreement that contains it. Agencies are already compensated by the agents themselves, they are just ripping you off to increase profit levels. More importantly, read the contract. There are so many ridiculous clauses in them and the agents are getting away with it because people aren't reading the contract.
If the clause has a hand written portion in it, it's negotiable. Stop letting the real estate industry scam the consuming public. If you are not familiar with how the industry works, consult with someone before signing anything. The truth is that most of the industry is out of control and the reason is that consumers and common sense don't mix.
When interest rates dropped tremendously a couple of years ago, people rushed in masses to buy homes. That's understandable, as right now is the perfect time to buy your dream home and be able to afford it. The problem is that people are in a frenzy to buy, and they buy the first thing that pops up and often get hosed on price and selection. The result? The real estate industry has been jacking up their prices and fees and refuse to budge when negotiating. Why should they? There will be some sucker coming along right behind you if you say no.
People by and large think they are so savvy, but they lack common sense and control. They remind me to my twenty-one years old self when I desperately wanted a Toyota Celica. Back then, they were so cool, but also very expensive. A hard top version ran about twenty-four thousand dollars. Very expensive for a small sports car. I couldn't afford it, but I was excited when I saw one in good condition sitting on a used car lot.
I went in to the dealer to inquire about the price. The car was three years old and had twenty-five thousand miles on it. The asking price was $23,800! I told the man, "You mean to tell me that after three years and twenty-five thousand miles this car has depreciated only two hundred dollars? You've got to be kidding me." I could never forget his response. "People are idiots, son. If you don't buy it, someone else will," he said.
I responded, "But you can buy that car new for only two hundred more dollars. No one's that stupid." He told me he wasn't worried, and he was right. Someone bought it three days later. Over the last year and a half, I have had the same basic response to real estate offers and the responses to me have remained the same: "Someone else will buy it." The real estate industry is acting like jerks and scam artists because they can get away with it. When the rates go back up, so will their customer service.
The thing is, we do have the power not to be pushed around, even in a market where there's always an idiot coming behind us. The key is patience. Until you find a deal that's right in terms of price and quality, don't buy it. I promise you, the right opportunity will come. You just have to wait. If a real estate agent insists on certain terms you don't like, don't use their services. Someone else out there somewhere will want your business bad enough to be reasonable, you just have to look for them. If you insist on being treated right, you eventually will. It worked out for me. Yes, many people in the industry are upset with me for not just taking what they were shoveling, but eventually I found the perfect lot to build the perfect home on, at a price I could afford.
In summary, it's true. People are idiots, and consumers and common sense don't mix. However, that doesn't mean you have to be like everyone else. Insist on the right deal and have the courage to say "no" if the deal isn't quite right.