House hunting

Steven and I went to look at our first few listings today. It was our first time visiting a home that wasn't a new constructed home. We've looked at some models and the home we'd have built for ourselves would look similar, but nothing that we would actually buy. Today we got our first look at some short sales and bank owned homes with our real estate agent, Ulli.

The first thing Ulli did was clarify what the difference is between short sales, bank owned homes, and normal sales. Short sales are the worst from a buyer's perspective. They have the best deals, but apparently they are an immense amount of paperwork for the listing agent, so sometimes the listing agent doesn't bother with them. We went to one house where many people (perhaps 15 to 20) had already viewed it. We could tell because their real estate agents had left their calling cards on the counter. But no one had been by to pick them up or follow through with the interested buyers. Ulli guessed that the listing agent hadn't been by in weeks.

Short sales, in addition to being a lot of work for the listing agent, have some other problems as well. Ulli said only 1 out of 4 of them ever go through. A place may get an offer, but you could wait for weeks hearing back on your offer, even up to 6 months. And after months of waiting, it still might not even go through. It's heart wrenching, slow, and it keeps you from looking at places you might actually have a chance to purchase.

Another big hurdle is the previous owners. If it's a short sale, the previous residents still live in the house. They know they're being forced out and they don't always go along with the program. Some of them trash the house because they're so unhappy. Some refuse to let anyone see the house in hopes of keeping it from getting sold in short sale. It's pointless to try. They'll just be foreclosed on and then evicted in time, but I can understand not wanting to let strangers come into your home to buy what's yours because you can't afford it. It was hard for us to go into homes with families still in it. In one, they were in the midst of packing and everything was strewn everywhere. I hated invading their privacy and I hated the thought of those people being forced out of their homes. The bad stuff had already happened though. Now is just dealing with the fallout. I'm not saying it isn't still painful. It was probably pretty miserable in fact. But the damage was already done and I wasn't about to change or stop that, whether I visited or not. If no one looked, they'd be kicked out all the same, but with a lousy credit rating. I still feel bad because my presence was a sour reminder to them of the loss they already had suffered, a loss only made worse by their continued presence in the house. I know some of them probably saw us as usurpers benefiting off of their misfortune, and in some respects that's probably true. But truthfully no one really benefits. The banks certainly don't. The buyers have to go through a million hoops for an often messed up home that rarely gets sold. Yeah the homes are cheaper, but it's for a reason. Compared to the previously constructed homes with the pristine carpets and the carefully chosen interior decoration, the short sales didn't measure up.

So we're thinking of adjusting our sights a little higher. Tomorrow we'll have another look at some pricier homes. We're going to try to avoid short sales, primarily for their impracticality. Admittedly, I did not enjoy the short sale shopping experience, if only for the guilt of seeing someone else's misery and in some way attempting to take advantage of their lost opportunities. I don't believe purchasing a short sale is wrong, but it was still depressing to see first hand the people who have suffered the most from the recession. The recession hasn't really touched me in any serious way. Yes, my net worth is a lot less, but it doesn't significantly affect the way I live. For these people it drastically impacted the way they live in an extremely emotional way. It also cautions me against spreading ourselves too thin. We've been very conservative with our price range and very cautious to save what we can, and seeing how home buying can turn south really reinforces that principle to me. Steven's dad really wants us to stretch ourselves since a home can be a really good investment, but I would rather make less money off of our investment and not risk getting thrown out forcibly. We never know what the future will hold. Steven could get laid off or need to quit to take care of his health. There could be a fire or an earthquake that leaves us penniless. Any number of tragedies would leave us a whole lot poorer and I wouldn't want to face the loss of a house in addition to whatever else we might have to deal with. It really says to me how important security is. I don't need money to buy things (though I do buy a fair number of things when I've a mind), but I feel much more comfortable living my life with the piece of mind that comes from knowing a have a cushion in case of emergency.