Tuesday, July 20, 2010

On Property Virgins Someone is Probably Getting Screwed

Real estate brokers, first-time home buyers and mortgage lenders capitalized on the housing boom of the mid 2000s. Since nothing lasts forever, the market collapsed and took much of the country’s economy with it. One thing has withstood the housing bubble bursting, and that is a reality TV show focusing on first time buyers shooting for the moon when it comes to their dream house. When Armageddon comes knocking the rumor is cockroaches will be the only survivors. Well if by then they’ve mastered watching TV, if they tune into HGTV’s Property Virgins they’ll have something to pass the time with.


HGTV does have some worthwhile programming, like Curb Appeal and Holmes on Homes. These shows help homeowners who need to improve their homes but don’t want to give a month’s mortgage payment to Home Depot to do it. For those that need a reason to crack open the liquor cabinet, National Open House lets those of us who bought property in Washington know that we could have owned a house in Kansas City with guest rooms that have their own guest rooms for a third of the price the one bedroom condo with a view of Massachusetts Avenue set us back. Apparently this show isn’t on anymore, which is a shame for when a homeowner in a metropolitan area is feeling a little too good about themselves.


Property Virgins is hosted by Sandra Rinomato, a Toronto-based real estate agent. Since she’s Canadian she might seem to be sweet and friendly, like our neighbors to the North tend to be. Canadians, as a whole, are great people. They love hockey, beer and in the 1970s and 80s sent us some of their most talented comedians. In the only episode of Property Virgins I saw, Sandra took these centuries of good will and used it to her advantage in up-selling a young lady from Washington into an apartment well above her original qualifying limit.


This girl, let’s call her Jen since that’s what she said her name was on the show, wanted to buy her first home in Washington DC. She wanted a place close to the city, near a Metro station, with parking and was within her $400,000-$430,000 budget. Of course the first place Sandra took Jen was to Georgetown – which doesn’t have a Metro station, has extremely high-end property and is an area where if you want to park something not in a garage, buy a boat. Needless to say, there was no match for Jen.


Next up was the Adams Morgan area. What part of close to the Metro does Sandra not understand? She tells Jen the Metro is a short walk away from the apartment being shown. In July the walk over the Calvert Street bridge connecting Adams Morgan to the Metro might as well be six miles long and made of nails. Strike Two.


The first two apartments Jen saw were basically closets with a bathroom. These places are fine if you’re renting, but call me crazy, if I 'm buying something I don’t want to be able to go to the bathroom and eat dinner at the same time. Or do I?


Like most gripping television, Sandra saved the best for last. In the U Street Corridor Jen found a place that anyone would have jumped at, let alone someone who just saw a shoebox and attic that were zoned as apartments. This place had all the bells and whistles. And for only about $100,000 more than Jen was qualified for. But the place came with its own parking space…for only $40,000. What a deal! At Sandra's suggestion to act quickly if she wanted the condo, Jen made a few calls and was able to work out the finances. Surprise, surprise a realtor preyed on a na├»ve purchaser’s emotions and got her to go $100,000 over her original budget.


Which leads me to my main point beef with this program - it promotes realtors, who are some of the most dishonest people you will ever meet. When my wife and I were looking to buy we saw a place that my wife really liked but I thought was too small. My wife talked about how we could make it work, where we could find storage, and so forth. The realtor went right along with her agreeing with everything being said. Then I was asked my thoughts, to which I said “It’s too small.” The realtor, without missing a beat said, “You’re right.” In her former life she must have been the Queen's mirror from Snow White.


Did you know in Virginia the realtor represents both the buyer and seller unless noted otherwise? Amazingly this is not a common fact disclosed by the agent. It’s easy to negotiate with yourself.

Buying Couple: “Do you think the sellers would take $50,000 less than asking?”
Realtor: “I don’t know, let me check with them.”

Realtor to Buying Couple: “I’m sorry, the price is what is listed.”

The moral of this little story is, and I can’t stress this enough, don't trust realtors. You give them an inch and they’ll take a foot - out of your savings.


At least when a mugger robs you, they have the decency to look you in the eye.

1 comment:

  1. Hi there,
    I just wanted to comment on your post. I am Jen, the person in that HGTV show. I do want to clear up a few things. First, Sandra isn't a licensed realtor in the US. What happened was that I had a budget around $450k, but would have liked to have stayed around 400. I started looking at a few places in that price range that Sandra showed me, and sure enough, that price range simply didn't meet my needs. So, Sandra and the tv crew left the US for a couple of months and set me up with a realtor here in DC (Joe Himali of Best Address, a great guy). With him, I saw about 20 other places. I finally came upon the Warehouses at Union Row, and fell in love with the unit. It was the last one like that available, and so I had to act fast. The thing is, I did have the money available. It just would have been nice to have spent less, you know? Like, sure, I can spend $20 on something, but if I have a coupon for $2 off, I'll use it.

    So the builder accepted my offer and we did all the paperwork before Sandra and the crew even came back to the US. I was told that I should try to remember how I reacted to the place when I first saw it when they filmed, and I tried to do that to the best of my ability. The whole thing about Sandra preying on my naivite, that's not quite accurate. They were just wrapping up the show in a way that made sense.

    On another note, I just sold that condo yesterday. I closed on my new house out in the 'burbs a couple of weeks ago, and I am now officially a Virginian. I enjoyed the experience, and while the show might not have really helped me in the process of learning how to buy my new place, it was fun anyhow.

    ReplyDelete

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