Friday, May 1, 2009

Changing Horizons

Times have changed. Homes are no longer thought of as a sure fire "flip to get rich quick" investment, they are back to being a place to actually live and perhaps a store of wealth for retirement.

A lot can happen in the 20+ years someone plans to live in a home. Nearby fields are developed, secondary roads are turned into main thoroughfares, infrastructure can deteriorate etc. These are things, humans have control over.

But there are also many things we can't control. One of my early posts examined how parts of Sacramento would fare against some of the the woes mother nature can cause. In those cases, people can try to avoid high risk areas in the first place, or build to resist these problems (i.e. the wood we are considering for our deck has a very high fire rating).

I somehow forgot to mention drought in that post, which is one of the most common of our woes here in California, and is becoming more and more serious this cycle. Living in Northern California, I don't worry about this as much as I would if I were in down south, but I have been increasingly concerned about its impact on our already weakened economy.

I digress...back to long term changes that affect where your chose to live. What I am wondering this drought, and all the odd weather patterns we are seeing across the U.S., just a part of our regular climate cycle, or are they the result of a larger shift due in part to climate change? Not sure anyone has the answer...but the thought of Sacramento getting hotter and drier is not a reality I want to face over the next 20+ years.


PeonInChief said...

It may be both climate change and weather cycle. The records from Mexico indicate that there have been long periods of drought, and that the cycle that began in the 1880s was both unusually wet and unusually regular--that the weather pattern was stable from year to year.

But clearly the increasing levels of carbon is having an impact. One of the interesting ones is plant gigantism--plants growing much larger than the little tag suggests they will.

Sold in '05 said...

I'm excited about rising sea levels... All those suckers that wasted big bucks buying houses that will soon be underwater, while we get brand new beach front property right here in the Central Valley. Take that rich guys!

Once sea levels get that high though, the millions of sq miles of exta water surface area will cure the drought cycle via increased evaporation and hence higher atmospheric moisture levels and rain. The only down side is the potential for more high humidity days. As someone who grew up in the midwest, I can certainly do without any more of those.

- CD

Bryan said...

It rains or it don't, right? Today it rains.

J said...

Hi, I'm new to your blog, found it on the Redfin page here:

I'm sure you know you've been featured as best of Sacramento, so my congrats to you on that.

I am currently looking for a larger home in the nicer part of Elk Grove. I know you bought in El Dorado (?) County after reading some of your posts, but if anyone can enlighten me about buying in EG, I'd appreciate it.

We've tried out a few real estate agents (don't really like any of them), so a recommendation on one will be much appreciated, esp. if it's one who will give a rebate as well. My current real estate agent I found through and he's giving me 51% of his commission if I buy through him. But I will forgo those several thousand dollars for a real estate agent who will save me several thousand dollars on a home and who's really good.

RE agent recommendations welcome and thanks in advance to all!

Buying Time said...

Welcome J -

I try not to give public endorsements on the blog. But if you e-mail me, I can give you the name of the agent we used who is based out of Elk Grove. My e-mail is average_buyer at yahoo dot com (spelled to avoid the spam scrapers =)

He is a straight talker, with the buyer's best interest at heart, and gives 50% comission back. But if you are looking for a lot of hand holding and personal attention, he's probably not your guy.

ahardy said...

I know that things are in bad shape right now, but why would you expect someone to do their best job if they are only getting half of their pay? No one asks you to give up half your paycheck- and believe me, there are plenty of people waiting to take your desk. Sure some slick salesperson may give you a deal, but you get what you pay for in the long run.

Buying Time said...

What do you get by paying a realtor 3%? A 400k home does not require any more work than a 200k home, yet they receive 6k more in pay?

I believe a reator should be compensated for their time, and the value they bring to the table.

My thoughts on the subject...

Jacob said...

They need to do away with the commission based compensation for realtors.

Also they need to do away with allowing realtors to double end a sale. Whatever the commission / fee is, the seller and buyer agent each get half. If there is only one agent, that agent still gets half and the remaining half goes back to the seller.

I like the idea of both parties paying their own realtor. If I want to see a house, I pay a realtor $30-$50 to show it to me.

But the NAR won't change so they will die eventually. Just like people don't need travel agents anymore, eventually they won't need realtors.

Cause really, what does a realtor do? They fill out some forms, try to get me to use their loan broker and their home inspector so that they can get a kickback.

On a $300k home I have to pay $18,000. Sure the seller pays it, but with the buyers money. I would much rather pay a lawyer $1000 to draw up the contract and put the other $17,000 towards lowering the price of the house.

J said...

I agree with Buying Time and Jacob, honest, hardworking real estate agents are hard to find and the system in which they work (even if they were honest ones) really works against buyers and sellers getting the most of our their money and is not capitalistic free trade in the sense that I think most Americans would want to operate in. That is, I am a buyer, I pay what you, the seller and I agree on and then I get the house and just have a lawyer draw up all the contracts and technical aspects. For house inspections, appraisals, and other requirements, etc. there is no reason why I as the buyer or you as the seller wouldn't just hire these professional on a fee for service basis without going through a real estate agent who gets a kickback for referring clients to them. That's the right way to go about real estate transactions/trades. The current system only benefit the real estate industry, lining their pockets, at the cost of the average home buyer and the average home seller in America and ultimately, the whole of common people/middle class working families.

Someone referred me to these insightful pages, worth reading.

RV6Flyer said...

"I like the idea of both parties paying their own realtor. If I want to see a house, I pay a realtor $30-$50 to show it to me."

While this make sense to normal people like you and me, the rest of the fools can't get past paying for a service. If they do not physically pay for it, then they go on like they really are getting something for free.

Realtors should get a retainer and work from that. They should be trusted advisors, like an attorney or CPA. Perhaps paying by the hour will show who is worth their salt and who is not.

Or, this is they way I do it. Represent yourself, lower the purchase price by 2.5% (this really pissed the seller's agent off as she thought she could get take the buyers agent's portion as well), then take a real estate attorney out to dinner to review the offer.

I have tried to use buyers agents, but in all cases but one, found they are totaly useless. One agent did do a great job at not letting us get emotional and over bid on a house. She said this is what it is worth, if the seller does not come down, walk away. Not oftern seen in their breed.