My wife and I have been haphazardly looking at houses to purchase as our primary residence for a couple years now, and we have finally have begun to get serious about the process. Now I’ve never owned any real estate, and therefore never sold any real estate, so I’m going to be explaining from the buyer’s perspective why this process sucks.
Real Estate Agents Can Be Annoying
Open houses are fun. You get to see what the real estate agent was trying to hide with the pictures online. You get to see if the owners were hoarders because pictures of the inside of the garage or unfinished basement are never shown. You get to see how well the owners have kept-up the house. Some agents talk your ear off – no thanks! But, most can’t answer any of your questions because they have done zero prep for the showing.
Then as you’re walking out the door – “are you currently working with an agent?” Listen ma’am or sir, you answered none of my questions appropriately and now you think I want to work with you? No thanks. The real estate agents’ incentives make them want to take you on as a client because they are already earning 2.5% to 3% seller’s fee on the current listing, and they want to earn another 2.5% to 3% on the buyer’s side, preferably from you buying a different house.
Illiquid Asset and Inefficient Market
90% of the time I feel like the listing prices of homes are pulled out of a hat. No local comps can even come close some times. This is partly do to the fact that every house is a snowflake – no two are alike. It’s unfortunately not like an index fund, where every share is exactly the same, and therefore easy to value. Putting a “fair market value” on a home is very hard for this reason and others. There are extensive trading costs, emotions involved, lots of time between initial offer and ownership, etc. Someone who has lived in the same house for 30 years plus, and raised a family there, probably assigns greater value to the home because of it, that no one else is willing to pay for.
Comprise is Required
Unless you have your house built from scratch on the perfect lot, you’re going to have to compromise. No house will ever meet your list of wants and needs perfectly. Additionally, if you have a spouse, there is a zero percent chance you’ll agree on everything when it comes to picking the right home.
I haven’t even bought a house yet, and the process is already frustrating. I can only imagine how hard it must be to sell a home.
In the end, hopefully it’ll all be worth it. We’ll have a home we’re proud of, that is ours, and somewhere to build memories for a long time.