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Monday, March 21, 2011

Directions You Don't Take


"What’s in store for me in the direction I don’t take?" - Jack Kerouac

People with good intentions tell me that I should not dwell on decisions I made in the past. You can't change what you did, so leave it alone - they say. I wish it was that easy. I ended up not having a couple of relationships that I wish I have given the chance to succeed. And I had other relationships that, had they not occurred, had I not done that one thing, my entire life story would have been written differently. The regrets of choices made and directions not taken is not limited to love or romance, or jobs, but also involves decisions on investments made or not made and years of regrets over how I let little things screw up big dreams and plans for the future.

That's a lot of rambling prose. But maybe you get my point. And while today's blog starts off with me talking about my regrets it is actually about readers who do the same dumb things and end up not getting what they want.

"What do you want?" That is one of the first questions I always ask potential new buyers. What kind of place do you want? Do you want a house or a condo? How many bedrooms/baths? Do you require a pool or off street parking? Where do you want to live? What is your price range. I get a litany of responses but most end up being very similar: two bedrooms, two baths, Old Town, pool, parking, willing to do a little work and priced under $500,000. And, by the way, we'd like to rent it to help pay for the property. That makes finding the potential buyer a place so much easier. Except there are so very few places like that.

The fact is that the core area of Old Town is very small and most of the houses priced under $500,000 have "issues" either in size, location, or condition that make them unappealing to most buyers. If a place is priced right, it may need remodeling and that means more money will need to be spent. When buyers see how much work may be necessary they contemplate hiring a contractor. They may decide to engage an architect. All of a sudden the cost of a buying an affordable dream house becomes exasperating.

I hosted an open house a while back at a very nice Old Town location. Lots of lookers came in to see what sat behind the white picket fence. Many were pleasantly surprised by the pool area and how large the house was. A long time ago a local told me that I had no idea how nice some houses are on the inside based on what I see from the front. (It works that way with people, too.)

The majority of lookers at my open house commented about how much it would cost to redo the place. The house has been lived in for over a hundred years. It was updated maybe 30 years ago. Sure it could use a fresh coat of paint, but the electricity and plumbing all work. I sometimes think we over-complicate houses. If we accepted them like we accept people that have faults, we would have less to worry about.

I use the example of the open house to illustrate what happens with many real life showings. Buyers view a property and then start to pick the place apart. Instead of falling in love with a potentially wonderful Key West cottage or big Conch house, they create all kinds of reasons why the place would not work for them. There is a cure for places like this - look at different houses that are in better locations, in better condition, and that most likely cost more money. But even that is starting to get difficult because the supply of really nice houses in good locations is dwindling. Even some of the very highly priced houses that have been on the market for a very long time are now under contract.

I understand buyers that say they must buy within their budget. I do understand that lenders no longer lend more money than buyers can afford to repay. It makes no sense to try to sell a property that a buyer cannot finance.

There are other buyers that have have the cash or borrowing capacity to buy a property at a higher price point but who refuse to pay the amount necessary to seal the deal. Sometimes sellers and buyers get into price or term negotiations that make getting "to win" nearly impossible. They take hard line positions and refuse to budge. I have found that huge price reductions often lead to buyers and sellers arguing over just a few thousand dollars. Sellers complain they have conceded enough and buyers demand more. Lines are drawn in the sand.

In 1982 I made a cash offer on a beautiful house on Crestmore Drive in Denver. I offered a lot less than the seller wanted. He refused to respond to my offer. I went around my Realtor and called the seller up myself. I said I would pay full price. He told me he would never sell to me. He had a beautiful home that I really, really wanted. I had pissed him off so bad that I could never buy it. I had made an enemy for life by being a jerk. He sold the house to somebody else who was not a jerk. I learned not to insult a seller by making a ridiculous offer.

I used to be an attorney. Over the years before I actually bought a place in Key West, I made offers on a few places that included conditions, representations and warranties that no sane seller would sign. I didn't get any of those places either. I learned that sometimes you need to evaluate a property and accept it for what it is or else decide not to buy it.

After losing many potential buys I suggested to my Realtor that maybe I should look for something smaller in scale and cheaper in price. I said I might buy one of those $100,000 cigar maker cottages. She said "Gary, they're gone." The places that were bargain priced in the 1980s got priced much higher as I dilly-dallied. I remember one such place on Southard Street that I looked at and turned my nose up at. It sold a few years back ago just under a million dollars. It is still owned by the same person. He knew the value of Key West charm and an excellent location. I learned that if you wait too long you will get priced out of the market.

I eventually bought a bank foreclosure which was the old Eaton Lodge guesthouse located at 511 Eaton Street. It had been boarded shut for two years. I bought it at a public auction. Plywood was removed from enough windows and doors so that potential buyers could actually get inside for the first time in two years. Lots of locals were present. I arrived in Key West the day before the auction, but only saw the inside during an hour preview before the auction. Bidding started and my stomach was in turmoil. I was bidding against many buyers at first but the number reduced to maybe three or four locals. The early bids were all low and insincere. Bidding got more aggressive. One of the auctioneer's men came up to me and asked if I really wanted the place. I said "Yes!" He said to go in and bid aggressive and my bid would scare the competition because they would see I was not going to walk away without the property. I worked. That was the end of the bidding. I got the prize. The next day my Realtor (same lady that told me all the $100,000 cigar maker cottages were gone) called me to say she got a phone call from a bidder at the auction. He offered either $50,000 or $100,000 to assign my contract to him. No thanks, I said. I knew I finally got a great property at a great price. I could screw with the offer because the seller made the rule: take it as is or don't screw with it. Pretty simple rule.

Some sellers do dumb things too. I recall a seller who turned down a near full price cash offer on his quintessential Key West cottage which was offered furnished with a few exceptions. A cash buyer wanted a particular piece of furniture that was not offered in the listing. The seller refused to include the piece of furniture and the house did not sell. Three years later the place is still for sale but now it is listed for $150,000 less than the cash buyer offered. That piece of furniture must be something very special.

A different seller turned down an all cash offer on a very nice Old Town home because the seller wanted to keep a particular light fixture. It took nearly a year for the seller to sell her house at a much lower price. I don't know if the light was included in the sale or not. It really makes no difference. What friggin light fixture could be worth a $100,000 reduction in sales price?

Too many potential buyers and sellers do the same dumb things I did. They set themselves up for failure by making buying or selling a place too complicated. If you want a house or a particular location, you buy it. You negotiate the best deal you can. Don't make getting the best deal make it impossible to get a good deal. I see people do this all the time.

You can't look back and change what you did in the past. But you can take positive steps to make current life choices work for you. Buying a place in Key West is supposed to be a fun event. Don't make it into something that is so complicated that you take the fun and joy out of it.

If you are looking to take your life in a different direction by buying a place in Key West, please consider working with me, Gary Thomas, 305-76-2642 or contact me by email at kw1101v@aol.com. I am a buyer's agent and a full time Realtor at Preferred Properties Coastal Realty, Inc. The only regret I have about moving to Key West is that it took me so long to do it.

3 comments:

Anonymous said...

Good post Gary. Very valid points. I think a lot of potential buyers also try to rationalize not buying a house because they are really not committed to purchase. They are what we call tire kickers and while they may serious be looking they are just won't commit. They have issues somewhere and I would bet it is money. Trying to live a life that is not real, all for show, living above their means. Some people just like to play the game hoping they will fall into a sweet deal that will never occur. They are chasing a dragon, chasing a dream and trying to create some pseudo lifestyle they imagine but will not manifest into reality. They are caught up in the idea but haven't yet figured out how they can make it reality without some serious talk. Many people are good at playing this game with themselves and portraying their imagined lifestyle to others. Some are very crafty, very good actors and will never be serious about buying here. That is the real problem in real estate - you need to be able to separate the really true buyers from those that are creatively faking their way into your world and wasting your time. I have seen too many in the last 10 years who have given academy award winning performances that proved they were all smoke and mirrors.

Anonymous said...

I HAVE been one of those buyers and sellers that have screwed up both sides of a deal by letting my ego's need to win get in the way of either getting a place I really wanted OR preventing me from getting a contract on what I was selling.

Prices in KW are not going to ever be better - they are historically low. I was recently looking at real estate in a large European city - wow - much more expensive than old town and NOT on a special island. People spend way too much time trying to ratinalize the deal. A thing is worth what is paid for it - so it's worth more to some than others. You want a good deal? Buy a trailer in Dade County. You want a good place - buy a place in KW!

You said it best when you said, "if you see a place yoe want buy it." it's that simple.

Anonymous said...

I remember the old saying "He who hesitates is lost". People can 'would of' 'should of' 'could of' anything but in the end they have to realize that life is too short so if you want it then buy it and enjoy it now. You never know what will happen tomorrow so live life today. In the long run you will be happier and is that not the best way to live?

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Gary Thomas in a Nutshell

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Key West, Florida, United States
I first read about Key West in a magazine called "After Dark" sometime in the mid 1970's. But it wasn't until March 1984 that I made my first visit to the island that would become my home. I had two weeks for a vacation and reserved a room at Colours Guesthouse (now Marrero's Guest House) for one week. I thought that if I didn't like Key West, I could always go back to Miami or Ft. Lauderdale for the rest of my trip. But after a couple of days in Key West, that was no longer a consideration. But when I wanted to extend my stay for the extra week I found there was no room at the inn. The guesthouse owner did find me a room at LaTeDa, the infamous guesthouse/restaurant. That's a story I'll write another day. But those two weeks in Key West gave me the realization that I had found Paradise. Key West has been my home since 1993 and my only regret is that it took me so long to get here. I am a full time Realtor at Preferred Properties CRI. Let me help you find your new home or business in Paradise. Living in Paradise is not a slogan, it's a way of life.