This page written circa 25 April, 2006.
Yesterday we accepted an offer for our house and went into escrow. I had not noticed how much my productivity had been depressed by the stress. It was not a whoop-in-the-garden event, but within hours we felt lighter and were doing things we had been putting off. Edwin and I promptly set out the Mallard in the previously-immaculate lounge.
When we started out in January, we expected one of our CA friends to be our agent. In due course the floors were finished and she turned up with a mass of bound colour pages and loads of forms all ready to go. That made me wary. I have always been wary of engineers who come to a first meeting with lots of stuff they have printed out of their favourite computer program.
One estimates the value of a property by comparing it with recent sales of like properties in the same area, "comps", and with trends. We had searched in the geographic area for houses of 4 or 5 bedrooms, and this suggested a price in the $650k to $700k region. At the same time, Zillow was suggesting a value over $750k, but it had yet to register the slump. (It would peak out at $829k!) This agent had selected comps by searching within price limits of $600k to $700k. Now any student of statistics can predict what value you will get out of this---about $650k. She wanted us to list at $630k to $649k, which puzzled us, and she wanted to charge 6% (by default half goes to each of the buying and selling agents in the US system), yet we are told that 80% of Sonoma County agents charge 5%. Simply to do the paperwork on a possible private sale she wanted to charge 3%, when there are people who will do this for a flat fee of $1000.
Our first problem is that we have one of the largest and nicest houses in the street. That is bad because comps are few and they are all on the low side. Extrapolation is much harder than interpolation! Our second problem is that prices are falling a little, and volume a lot, as the market is very slow. Properties are not listing for days only, but frequently over 100 days. Some come onto the market and go off and come on again. Bad time to be selling, bad time to be in a hurry, but there you are.
We eventually asked $695k, dropped to $675k after 2 weeks, and accepted $660k (but on a cash deal). We did this with Patrick from Low Cost MLS, for a total of 3.9%. Kay was very unhappy about dumping a friend, but to me it was a no-brainer. I have to make such decisions on a financial rather than a moral basis.
Patrick was great, I would thoroughly recommend him. How come he does it for 3.9%? The answer is easy and he'll tell you: The Internet. Life has become easy for real estate agents, certainly in the Bay Area where everybody is connected. It is the Ebay effect---the net is exactly what is required. Often buyers hear news before their agents do. Agents understandably do not like to see this bonanza slip through their fingers. I can understand that.
How big is the net in New Zealand? Broadband is available in Hamilton, even outside the dropoff, though not WDSL. NZ seems to be like Oz, high web content per capita. Sadly NZ is virtually all low-res in Google Earth. At 50,000 feet I see all the pixels I am going to get. Kay takes comfort, but I unequivocally assure you that I do not want to live anywhere that is not worth bombing, and you probably don't either until the bombs actually fall. On the plus side, www.trademe.co.nz has a good selection (including houses) and is to Ebay what the Wentworth Courier is to the Sydney Morning Herald (SMH): At least as useful because of its local customisation.
The "dropoff", incidentally, is our name for a region on the edge of places like Hamilton and the nearby village of Cambridge. The term is stolen from Finding Nemo, where it means the end of the continental shelf, the point where reef gives way to wide open ocean. We mean the distinctive perimeter that is city on one side and farmland on the other, where one is still close enough to walk to the university or cafes but where one can have acres of land and a view across fields or forest. Like Kay says, if one is ever to try this, now is the opportunity.
Tony paid me a compliment on these pages recently. He said I should talk to a newspaper, "you know, they pay money for this sort of stuff!". This appeals to the ego, the idea that I might be worthy of wider circulation. Maybe I could write a column in the Waikato Times in the vein of Bryson's books like Notes from a Small Island and Notes from a Big Country where he reflects entertainingly on his move to a new culture, or as David Dale did in An Australian in America while in his role as the New York correspondent for the SMH. When The Perils of Heavy Petting was published in the SMH, Andrew threatened to kill me if I had been paid for it after all his unpaid words to them, and I was very flattered. Even though my soapboxes are posted on this great web, I doubt they are so public as you might imagine. The search engines are not all that good yet.
Gregor made a point about these pages: I am too honest for my own good sometimes. I'll tell you my dark thoughts. Perhaps, but these pages are for my friends. I most certainly differentiate between friends and not-friends in my dealings. You out there are not all equal in my sight. The engines can't understand context yet, and strangers do not know to look here. REM provided the title, and they can provide the conclusion: "Oh no I've said too much, I haven't said enough".