Buyers baffled by lack of bargains

Q: My wife and I have been house hunting with more or less urgency since this housing crisis began, around 2008. We really expected there to be lots of bargains and motivated sellers. We spent many hours house hunting in several different cities and neighborhoods. We made several offers on homes, and were always outbid. We were really surprised at how many of the homes sold for more than asking, and how few deals there were to be had.

My wife recently went back to work after staying home with our young children for awhile, and we decided to wait until her income can be considered toward our qualifications, so we can afford more. We've come to the conclusion that we just aren't going to find what we need in the price range we've been looking at. I feel like all this "buyer's market" stuff was misleading. Was there anything we should have done differently?

A: No.

On every factor that matters, you did what you were supposed to do. You were an informed buyer and paid attention to what was going on in the real estate market. You positioned yourself to act and then actually did activate your homebuying efforts when you learned about the (relatively) lower price opportunities and incentives like the tax credit that were generated by the housing crisis (for some)/opportunity (for others, yourself included).

Absolutely the only way to know whether what sounds like a market opportunity is, in fact, an opportunity for you is to do exactly what you did -- go out, look at houses and make offers. And the only way you ever could have truly found out to an appropriate level of satisfaction that the opportunity would turn out to be illusory, for you, was to get outbid and be unsuccessful.

Many times, agents try to show buyers less expensive homes so they can be competitive in multiple-offer situations, or show them list-price-to-sale-price data that documents that most homes in a given area are selling for more than the asking price. We brokers and agents often wish our clients would take our word (and the data) for it, to avoid the house-hunt heartbreak you are now experiencing.

But when it's you, and your (prospective) home and you believe you may be in a unique position and a unique spot in time to get a really great deal on a home, it's only to be expected that you would make every effort to stretch a "hot dog" budget to satisfy your cravings for a lobster-quality home. ...CONTINUED

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