Biggest RE lessons learned/mistakes made

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do not trust realtors. Even if you've done extreme due diligence, interviewed a few, and picked one that comes with great referrals from people you know. Just don't trust them. They are playing with your money, and their incentive is much more to push you fast and to either bid high (if you're a buyer) or accept a low offer (if you're a seller). Get their input, but verify it is what is actually best for you.

Read the chapter in Freakonomics about realtors if you want proof.

You mean the chapter comparing real estate agents to the Ku Klux Klan and stating that real estate agents, like the Klan, would become extinct? That book was published in 2005 and real estate agents -- and as we have seen recently -- the Klan still exist.

If you base anything you do on a faux economic philosophy, you are easily duped by -- anyone.

Alright, realtor. As you know, technology is on the brink of destroying the traditional realtor model. And the research on how they price and sit on their properties is excellent.

Realtors, as a group, are half a step above used car salesman.

Actually, an economist, but you seem wrong about many things.

Frequently wrong, but rarely in doubt!

Redfin is dying. It can't even get market share in Seattle, it's HQ location. The whole scale seems to be geared to an IPO to enrich the founders. Then who would want to list with a publicly traded real estate agency? Talk about conflicts of interest.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do not trust realtors. Even if you've done extreme due diligence, interviewed a few, and picked one that comes with great referrals from people you know. Just don't trust them. They are playing with your money, and their incentive is much more to push you fast and to either bid high (if you're a buyer) or accept a low offer (if you're a seller). Get their input, but verify it is what is actually best for you.

Read the chapter in Freakonomics about realtors if you want proof.

You mean the chapter comparing real estate agents to the Ku Klux Klan and stating that real estate agents, like the Klan, would become extinct? That book was published in 2005 and real estate agents -- and as we have seen recently -- the Klan still exist.

If you base anything you do on a faux economic philosophy, you are easily duped by -- anyone.

Alright, realtor. As you know, technology is on the brink of destroying the traditional realtor model. And the research on how they price and sit on their properties is excellent.

Realtors, as a group, are half a step above used car salesman.

Actually, an economist, but you seem wrong about many things.

Frequently wrong, but rarely in doubt!

Redfin is dying. It can't even get market share in Seattle, it's HQ location. The whole scale seems to be geared to an IPO to enrich the founders. Then who would want to list with a publicly traded real estate agency? Talk about conflicts of interest.

Redfin was not developed to represent buyers and sellers of real estate, it was developed to sell ad space on its very finely developed website. The IPO had to be delayed until the founders hit their advertising dollar goal. People are investing in an advertising vehicle that just uses real estate sales to get eyes on the site. If investors want to use Redfin, I don't think it would be a conflict, but I will leave that to the more learned at the SEC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do not trust realtors. Even if you've done extreme due diligence, interviewed a few, and picked one that comes with great referrals from people you know. Just don't trust them. They are playing with your money, and their incentive is much more to push you fast and to either bid high (if you're a buyer) or accept a low offer (if you're a seller). Get their input, but verify it is what is actually best for you.

Read the chapter in Freakonomics about realtors if you want proof.

Way to generalize. And you're a broken record about the Freakonomics book. See Norm Scheiber's evisceration of it. The chapter you refer to concerns Chicago real estate market -- all real estate markets are local. In relation to this particular Chicago analysis, Leavitt doesn't consider the mentality of the two groups of sellers. Simply put, most clients of agents are motivated to sell quickly themselves due to a change in life circumstances while agents can afford to sit and wait because they simply want to upgrade. So please try to think a little more critically, stop being so gullible and parroting this book like it's anything more than the junk science it is.

I personally told Steve Dubner the same thing at a gathering in DC. He was royally pissed at me and could not counter my comment. Leavitt has an ax to grind with real estate agents because he (being the genius economist) overpriced his house and it sat on the market. As most irrational sellers do, he blamed the real estate agent and then developed the bizarre theory that real estate agents get more money for their house because they hold them on the market longer. Wrong. Real estate agents get more money when selling their properties because they are well presented and they understand the market and pricing.

I will credit Leavitt for hiring Dubner to write up his strange theories and successfully monetize them. Quite an accomplishment for any economist.

[Anonymous]

Things I learned through several house purchase:

(1) if there is signs of water damage, assume the house has water problems even if sellers/agent claims the problems are fixed. A house that floods once a year every few years still is a PITA because your basement is going to get wrecked occasionally.

(2) think long term about your needs. If you plan to have kids, think of where the kids rooms will be and make sure the arrangement works for you. For example, if bedrooms are on different levels, imagine going up and down steps several times per night to check on the kids

(3) don't be fooled by HGTV - things are hard and expensive to repair/replace/update. Everything cost way more than you think unless you are ready to cut serious corners, are you are likely going to be financially stretched after buying. Be wary of a fixer-upper unless you know that you are handy or have a lot of support.

(4) Be honest with yourself and don't buy based on the life you want to live. If you are allergic to the outdoors and like to spend your weekends reading, you are not going to fix up an overgrown garden.

(5) visit the house at several times during the day to see who is around the neighborhood at different times to make sure the neighborhood feel is what you want

(6) Don't buy a condo unless you are ready for and can afford significant fee increases. Assessments for repairs can happen at any time and you can do nothing about them. Also, make sure you know about rules for renting the units and can live with those rules.

[Anonymous]

Anonymous wrote:Do not trust realtors. Even if you've done extreme due diligence, interviewed a few, and picked one that comes with great referrals from people you know. Just don't trust them. They are playing with your money, and their incentive is much more to push you fast and to either bid high (if you're a buyer) or accept a low offer (if you're a seller). Get their input, but verify it is what is actually best for you.

Read the chapter in Freakonomics about realtors if you want proof.

My neighbor, a realtor, pretended to be a friend for 8 years while I lived in the house. I figured I would use him to sell when ready.

After I signed the paperwork, he began pushing for selling to the latest/lowest bidder. Day of closing, he somehow altered the contract to include some additional BS fees. I called him out on it, his face turned red, and everyone around the table was disappointed in him. terrible experience.


After the house sold, both him and his wife gave me the cold shoulder as if we are now strangers. what a long con he played.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do not trust realtors. Even if you've done extreme due diligence, interviewed a few, and picked one that comes with great referrals from people you know. Just don't trust them. They are playing with your money, and their incentive is much more to push you fast and to either bid high (if you're a buyer) or accept a low offer (if you're a seller). Get their input, but verify it is what is actually best for you.

Read the chapter in Freakonomics about realtors if you want proof.

My neighbor, a realtor, pretended to be a friend for 8 years while I lived in the house. I figured I would use him to sell when ready.

After I signed the paperwork, he began pushing for selling to the latest/lowest bidder. Day of closing, he somehow altered the contract to include some additional BS fees. I called him out on it, his face turned red, and everyone around the table was disappointed in him. terrible experience.


After the house sold, both him and his wife gave me the cold shoulder as if we are now strangers. what a long con he played.

This is another great lesson -- don't mix friends/family and business. That becomes very apparent once you start doing work on any real estate you buy. It seems like a great idea but becomes very awkward.

And PP, I totally have had the same experience with realtors -- every single one of them I've hired has turned out to be a major disappointment in some way. I've hired hundreds of other professionals and never had such a consistently bad experience after doing due diligence. The way the field is structured sets it up for problems.

[Anonymous]

If you are going to buy, go ahead and buy a house that could accommodate 1-2 children, even if you don't have any. Even if you think you won't have any. If you are 100% sure of no kids, still buy in a good school district if you can afford it if you think you'll ever need to sell your home someday.

Buy the crappiest house in the best neighborhood.

Granite and stainless steel appliances are shiny, but you'll be much happier in long run with a new roof and HVAC. Cosmetic issues are cheap to deal with.

If you don't like doing backbreaking yardwork in the heat now, you won't like it after you buy your house. A big yard and fussy flowers/plants are a big drag if you enjoy brunching on weekends.

All houses with basements will get water eventually. I know a million people are going to swoop in and say nuh uh!!#@!!@ But I know I am right. You can't dig a hole in the ground and not get some water eventually. So what to look for--make sure the slope in the yard works, the gutters are clear, there is a drainage system and a sump pump. Don't put hardwoods in the basement.

[Anonymous]

Try to distinguish between repairs that are just expensive and repairs that are expensive and disruptive. For instance, roofs, AC units and windows are expensive to replace but they can all be done in a day. Come back from work in the evening and you've got a cool-looking new roof and that's it, you're done. Plumbing, electrical, HVAC, water in basement, structural issues, etc. on the other hand can be very very disruptive and stressful to deal with.

[Anonymous]

I am on my fifth house in the D.C. Area. My advise is never pay full price for a realtor. Pay 1% for selling agent and 2.5% for buyers agent . If you are buying make sure you get cash back from your realtor. When a realtor does open house they do it more for marketing themselves .

With sites like Zillow and Redfin realtors are irrelevant.

[Anonymous]

Anonymous wrote:Change your HVAC air filters ever 3 months
Get your dryer vents cleaned yearly (fire risk)
If your plumbing has a studor vent (look it up), replace it every 5 years (learned this the hard way)
Install a battery backup on any sump pumps
Get your gutters cleaned regularly
Dont' let small maintenance items build up -- they will become bigger problems later.

Correction

HVAC filter every month
Studor is lifetime (you got a bad one)
rest are ok

[Anonymous]

Do NOT let sellers stay in the house after closing. We were buying our first house & the sellers insisted they had to close by the end of the year due to tax purposes but claimed they would "definitely be out" after New Year's, the first week in Jan. We had an apt until end of Jan, so we said ok. BIG, EXPENSIVE mistake. By MARCH they were still not out, landlord rented our apt. March 1. We had to put our stuff in storage, live with parents and threaten to have them thrown out of our house. they paid us a nominal amount, so we were paying a lot for our mortgage and storage, plus we had to pay 2 moving costs. And a ton of aggravation.

[Anonymous]

And pick a decent lawyer. Make sure you interview him or her, don't pick a friend of a friend!

[Anonymous]

Anonymous wrote:Do NOT let sellers stay in the house after closing. We were buying our first house & the sellers insisted they had to close by the end of the year due to tax purposes but claimed they would "definitely be out" after New Year's, the first week in Jan. We had an apt until end of Jan, so we said ok. BIG, EXPENSIVE mistake. By MARCH they were still not out, landlord rented our apt. March 1. We had to put our stuff in storage, live with parents and threaten to have them thrown out of our house. they paid us a nominal amount, so we were paying a lot for our mortgage and storage, plus we had to pay 2 moving costs. And a ton of aggravation.

This story is interesting to me. When I took Real Estate in law school, the prof was adamant that you should never do a lease back after sale. Particularly in jurisdictions (like DC) that have strong tenant protections. But you'll find that people on this web site wills say that's ridiculous, everyone does it, etc etc. I think it works out most of the time, but when it doesn't, it can be a major pain.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do NOT let sellers stay in the house after closing. We were buying our first house & the sellers insisted they had to close by the end of the year due to tax purposes but claimed they would "definitely be out" after New Year's, the first week in Jan. We had an apt until end of Jan, so we said ok. BIG, EXPENSIVE mistake. By MARCH they were still not out, landlord rented our apt. March 1. We had to put our stuff in storage, live with parents and threaten to have them thrown out of our house. they paid us a nominal amount, so we were paying a lot for our mortgage and storage, plus we had to pay 2 moving costs. And a ton of aggravation.

This story is interesting to me. When I took Real Estate in law school, the prof was adamant that you should never do a lease back after sale. Particularly in jurisdictions (like DC) that have strong tenant protections. But you'll find that people on this web site wills say that's ridiculous, everyone does it, etc etc. I think it works out most of the time, but when it doesn't, it can be a major pain.

Just to clarify: It is not a lease but a post settlement occupancy agreement and the seller Has possession of the property at the sufferance of the new owner. The seller has no tenant landlord protections, particularly good in DC because of TOPA. The buyer above should have moved immediately to force the seller from the house. That said I agree that these types of agreement are to be avoided

[Anonymous]

Anonymous wrote:And pick a decent lawyer. Make sure you interview him or her, don't pick a friend of a friend!

And ask that about the three types of title insurance and make sure you get what you want not what they try to scare you into buying.