Playing Musical Chairs in the Marketplace

Musical-chairsAnyone disagree when I say this is one tough market to sell in?  Any dissenters lurking in the ranks?  What about the easy flipside of the collective coin – buying?

Sorry.  No matter how many of you might wish it wasn’t so or how many rabid boosters there are waving rally flags and raving about all the golden opportunities this big smiley-face button of a  “buyers market” offers us … the fact remains:  this is also one tough market to buy in – for all kinds of convoluted reasons that fly in the face of simplicity.

You may have noticed, real estate is getting more complicated.  Like most other things in life.

So, if it is a hard market to sell in and a hard market to buy in, then how exponentially hard is it to do both things at the same time?  How does it work?  How does someone wrap their brain around the notion of going onto the market and out into the market, simultaneously, armed with the flawed uncertainty of a “contingent” offer?

Since the well-being of real estate is partly dependent on figuring out how more buyers can sell and more sellers can buy,   we’re going to spend a few columns exploring the nuances of what I’ll call the CO-dependent marketplace – as in Contingency Offer.

Eventually,  I’ll either get tired of talking about our COdependent tendencies or you’ll get tired of listening. In the meantime, we’re fittingly stuck with each other until we can both figure out how to break the pattern and move on.

If this were 2005-2006 we wouldn’t be having this discussion. It wouldn’t even be a blip on the radar screen obscured as it was by the opium cloud of irrational exuberance.

What did people do way back then if they wanted to sell their current place and buy a new one?  Simple, they just threw out the status quo and proceeded ass-forward through the window of opportunity.  They didn’t have to sell first in order to buy. That was the old economy.

All the tools were in place to ignore the little voices of reason residing inside our heads. The ones that whisper cautious mantras in the middle of the night.  The same ones that have staged a full-blown coup and are now shouting down any decision that contains even a hint of risk.

It went something like this:  First, tap the equity line on your existing home for the downpayment you don’t have.  Then get some version of an easy-qual, pre-approval letter at a low, low teaser rate. Go out looking in a marketplace where everyone else just like you is going crazy trading places. New choices are popping up everyday.  Pick one. Then try to wedge your way into the front of the multiple-offer queue –somewhere north of asking price.  No need to worry about the appraisal.  Praise the Lord. They all appraise.

From there you buy as-is. Close in 30 days.  Take your time moving.  Own two houses and pay two mortgages for a few months.  And then….best of all…. sell your old house for even more money – because the market has continued to shoot up the whole time!

Until it didn’t.  And if you happened to be one of the last ones standing in the musical chair monopoly game – you  were suddenly stuck with two mortgages you couldn’t afford and one lifestyle completely engulfed.  And you understood in painful, inescapable fashion why it had always been conventional wisdom to sell first and then buy second.

Next week:   CO-dependent Real Estate confronts the paradoxical quality in human beings that refuses to let go of the past in hopes of knowing exactly where the future is.

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