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It Started Out As An Easy Conversation ...

October 18th, 2008 at 07:35 am

The Time: Yesterday

The Location: Suburb of Austin, Texas

The Setting: Wife is sipping her morning coffee while reading the Wall Street Journal; Husband is perusing the news on the internet; Wife looks up from paper, and the "easy" conversation begins ...

Wife: What do you think the odds are that the Fed will cut interest rates?

Husband: 120%

Wife: Yea ... So, should we move some of our short-term money to a short-term CD?

Husband: Good idea

Wife: OK

Sounds easy, right? Well, what followed was "Wife" searching for best CD rates, and then having several discussions off an on over the course of the day and evening with "Husband" about length and amount of CD. Conversation expanded to include general state of the economy, prospects for Husband's business over the next few years, Wife's employment prospects following relocation given current state of economy, how much would be spent on a house, why does Husband's idea on that particular subject (how much to spend on house) continue to swing back & forth like a pendulum, why-oh-why does Husband continue to delude himself into thinking a house can be had for 50% of list, and why-oh-why-oh-why doesn't Wife realize that at any given moment earned income could plummet to zero?

It all ended up with the exaggerations dialed down, Husband & Wife in agreement (GMAC 6-mo CD at 4.00% for a compromised-on amount), followed by a fair amount of laughter, and their record of never fighting over money intact (serious discussions with differences of opion, yes ... neither of them are doormats after all ... but fights, no), but my goodness it was tiring for both of us ... er, I mean "them."

8 Responses to “It Started Out As An Easy Conversation ...”

  1. gamecock43 Says:

    "why-oh-why does Husband continue to delude himself into thinking a house can be had for 50% of list,"....Hahahaha!!! That is my man too! Everytime I say, "look this place is beautiful for X amount" and BB goes, "great! I bet we could get it for X-$50,000." And he has not even looked at the listing!!!

  2. thriftorama Says:

    It's true you can get a house for below list, but not by insulting a sellerand offering half. They do need to cover their mortgage balance plus 6 percent real estate commissions!

  3. scfr Says:

    thriftorama: Your arguments sure sound a lot like "The Wife's"!

  4. baselle Says:

    50% of list might be a bit extreme, but I'd encourage him if he has the temperment for lowballing. Please indulge me and let me play "vulture" for a sec.

    Your bid does not need to cover a seller's mortgage balance and real estate commission. Your job, as a buyer, is to buy that asset at a price that works for you. Period. Just because the previous buyer overbought, doesn't mean you overbuy yourself. And you can't rescue the SD housing market single-handedly by overbuying.

    I understand the emotion that you don't want to insult the seller, but frankly, you as buyer drive the whole transaction. Your "insulting" offer is better for the seller than the cricket chirp of 0$. At least the RE guy can claim he got an offer to the next looker.

    You do need to establish a lower price during a negotiation - a place to bargain from and up. Offer your best price, seller counters, you now have no place to go.

  5. scfr Says:

    Thanks for playing devil's advocate, baselle, and I agree completely.

    The problem we have run in to is that when we bought and sold both of our previous homes, and when we made offers during our search here in Texas, I am the one who ended up doing the negotiating; DH just isn't comfortable doing it and he wants to cave in too easily. I'm the one who has been able to "draw a line in the sand" and stick with it, and so at some point during the discussions I seem to become "lead negotiator." When we have bought, we don't bid higher than both of us are willing to go. When we have sold, we don't go lower than both of us are willing to go. It will be harder for me to negotiate forcefully over a price I'm not convinced is even remotely in the ballpark.

    And the even bigger problem is that we have given ourselves a rather narrow window of time to do the actual on-the-ground house hunting, which is hopefully going to result in our making an offer and buying a house. I really don't want us to end up squandering that limited time looking at a bunch of houses that are out of our reach, just because DH thinks they can be had for 50% off list.

  6. baselle Says:

    Ah, in other words, clearly NOT the temperment for lowballing.

  7. scfr Says:

    Right - Unfortunately I guess it would be described as the "YOU go super-lowball" temperament. I have "lowballed," but not more than 35%. If we're dealing with a REO (bank-owned property), I might go lower, but it would depend on what we thought the house was worth, how long the bank had been stuck with it, etc.

  8. scfr Says:

    P.S. - We had a follow-up conversation, and as of right now DH has agreed that we will not look at anything that is listed more than 25% over our top price. Whew.

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