The Midnight Rider and the Economic Dilemma of Day-old Donuts
Sunday, January 29, 2023
Well, I've got to run to keep from hidin'
And I'm bound to keep on ridin'
And I've got one more silver dollar
But I'm not gonna let 'em catch me, no
Not gonna let 'em catch the midnight rider
After being countered on two offers on houses, I get the sense that some people live lives of cognitive dissonance—or at least those with properties that have languished on the market.
In every deal, I recognize the seller as a rational economic actor; they want that fat cash. Maximize, baby, yeah! That said, they have to work within the context of other actors who, while in another age would just grab a legion with spears and snag the place for FREE...eh, minus a limb or two. Plant that flag and sing "everybody was dancin' in the moonlight!" Or hobble. We have since disassociated ourselves from that equally valid approach to real estate. I suspect we did this near the same time when our war dogs became cuddle cuties. And thus we put our sword and shield down. Today, through the trade of a syruped McGriddle for that pickled Chick-fil-A, we attempt to reach that choice, sizzlin' steak equilibrium. That said, have I found sellers to operate out of their economic self-interests?
When an offer comes in, a seller has all the power. All that sweet, sweet cash is theirs! With just a flick of the pen, or in these days, a finger twitch, and "all of your wildest dreams will come true." As a buyer, I haven't been a part of one of those hot properties. Like spotting a classic muscle car rumbling down the street: there it is, there it goes. Now, as a seller, I served up something that sold before it hit the table! So far, the only properties I have dealt with are literally gathering dust: one at 100 days on the market, the other beyond 40. Clearly, the market isn't interested in these properties at their price points.
In that context, I'd think the seller would lift that mighty pen to the heavens and exclaim, "By the power of Crye-Leike...I have the power!"
But, they don't do that.
In both situations, not only were the properties pushing against their shelf life, but the sellers had left: one in an RV, the other moved out of town. A sell was not just a theoretical thing for 'em as they carried on their day-to-day there; no, they HAVE to cut ties. Slowly succumbing to entropy, those houses are just a homesick sniff away from squatters.
In our first scenario, we naively offered full listing and asked for 3% closing. They countered.
In the second offering, we low-balled purposely with $50K less, because it was stale flapjacks in a hotter location. There were more reasons than I can actually recall for this:
- Apparent extensive mold damage on the master ceiling;
- Old leaks on the ceiling throughout the house;
- Poor lighting;
- In dire need of paint or scrubbing throughout the premises (add to kid designs coming through the paint);
- A custom, plyboard cabinetry in the main bathroom that couldn't quite make ends meet;
- Termite damage in an optimistically named structure that was a shed;
- A second shed composed of metal that penciled in an appointment with my reciprocating saw;
- Some carpet had to be replaced (if not all);
- Two burners were out on the stove;
- Mysterious pooling of water in the garage;
- A "handyman special" master bathroom.
Finally, the man's workbench was rotted in the garage—I know all what I need to know about both a place and a man's life from his workbench in whatever way that applied: from his pulpit to his computer station.
Nevertheless, we submitted an offer with a certain optimism that we could build equity as opposed to playing catch up. In my past 18 addresses that span back to 2004, I haven't lived in a place that BAD...and that includes my Anchorage spot when I literally had my neighbor's WATERFALL crash down on my dining table right before our Friday night dinner! But I could make this place work. Taking that $50K off seemed sensible and that was me being pre-negotiable as I really thought $70K was realistic. Who was I competing with?
But the counter was $10K off with some new "As Is" weeds that sprung up overnight. Yeah, like I'm gonna shell out full price for a half-eaten Twinkie left out in a park. No thanks; I don't negotiate. "Break the wrist, walk away." It's a target-rich environment out there with the threat of a recession looming on the horizon.