HOUSE HUNTERS: The Myth, The Magic
Over the past two years, as the rest of the economy has gradually tanked, one sector has stubbornly resisted: the housing market. Despite layoffs, the weak dollar, the moribund stock market, and all other manner of economic calamity, house prices are climbing faster than George W. Bushs negative rating in Iraq. In fact, economists credit the housing markets continuing strength with keeping the country out of recession.
Much like the wealth effect created by the late 90s stock boom, rising real-estate prices have made Americans feel rich enough to keep on spending amply, regardless of the overall economic climate. So the booming housing market is surely welcome news to most Americansexcept those, like me, who would like to actually buy a house and are extraordinarily piqued about this. If there were a Murphys Law of Economic Collapse, it would hold that as jobs disappear and wages plummet, the price of your dream house will skyrocket.
Most economists attribute this phenomenon to historically low interest rates, which translate into extremely affordable mortgages.
I have a different theory. I blame HGTVthe Home and Garden Television channelone of the fastest-growing stations on cable and a certifiable cult phenomenon among many of my peers.
HGTV is one of those niche cable stations that sounded preposterous when it startedwhod watch round-the-clock gardening, remodeling, and house-hunting tips?but seems perfectly reasonable today alongside the dozens of specialty channels devoted to cooking, pets, sci-fi, soaps, books, andon my former cable systemone click below the NASA channel, which on weekends broadcasts continuous footage of the earth rotating. (Really.)
Since its 1994 launch, HGTV has grown from a tiny startup to a cable colossus that reaches nearly 80 million households in the United States alone, broadcasts its programs to viewers as far away as Latvia and Brunei, and is even available to U.S. service personnel in 175 countries and on board Navy ships. The idea of rugged naval aviators, fresh from sorties over Iraq or Afghanistan, choosing to unwind before Home and Garden Televisions design and decorating tips is testament to the strange power this channel holds over its viewers.
The Home-Shopping Network
Many HGTV shows feature a subtle, battle-of-the-sexes leitmotif that adds to the intrigue, while reinforcing and pandering to its audiences prejudices in a way that surely boosts viewership.
On the popular Designing for the Sexes, most men are of the hapless variety, puzzled as to why their wife is upset over the moose head theyd like to mount over the dining room table; most women display an alarming fondness for pink chenille or French country style or doilies. Viewers therefore identify quickly, privately relieved to discover that their own situation isnt nearly as outlandish as theyd first imagined. They receive further encouragement from the shows denouement, which invariably features a designer or decorator of Christ-like patience who steps in to mollify the warring factions by curbing even the tackiest excesses and delivering a touch of class and taste that both can live with. This men-are-from-Mars-women-are-from-Venus format presents itself merely as decorating help. But the effect upon the addled participantsand viewers, toois not unlike that of a good marriage counselor, convincing couples that any problem can be overcome.
I believe it is no coincidence that HGTV is the one channel my fiancee and I can agree on. It accomplishes a feat previously thought to be impossible, bridging the chasm between Oprah and SportsCenter.
Like any 24-hour-a-day cable station, not all of HGTVs programming is what one would consider to be of Emmy Award-winning caliber. I could do without a show called Simply Quilts.
The shows premise is a simple one. In each episode, a friendly realtor helpfully accompanies a pair of prospective homebuyers as they shop for a house or condominium. Cameras follow them from room to room, allowing the viewer to examine the various properties in what amounts to a vicarious trial run for the potential homebuyer. The first time I tuned in, a young newlywed couple wanted to move out of their cramped apartment and buy their first home, but clearly had no idea what they were doing. These circumstances were reassuringly similar to my own. I watched with growing appreciation as the realtor listened patiently to their needs and then drove them to one beautiful house after another. If a house was too small, the realtor would smile and show them a larger one. If a house lacked a pool, the realtor would find them one that also had a jacuzzi. If a house was on a noisy street, the realtor would show them one in an area so remote it probably had not yet been mapped. And every visit was a leisurely, pressure-free stroll that seemed not only easy, but fun.
The young couple soon found a perfect home, conferred briefly with the realtor, and decided to place a bid on it. House Hunters cut to commercial. Despite having known them for just 22 minutes or so, I was transfixed, and found myself rooting vigorously for their bid to be accepted. When the show returned, our prayerstheirs and minewere answered. As the couple sat emotionlessly in their worn rental, the phone rang. It was their realtor, with good news! I was privately impressed that HGTV had a camera crew on hand to document this happy occasion. The show ended by flashing forward several months to show the couple in joyous possession of their new home. I stole a glance at my fianceewho looked exactly as she had at the end of Titanicand immediately began looking forward to my own home-buying experience.
No Chase Like Home
To begin with, House Hunters promotes the fantasy that charming, spacious, reasonably priced homes are plentiful and always available in even the most desirable neighborhoods.
Perhaps this is true in some distant corner of North Dakota where sprawl and gentrification have not yet driven up prices. But it is most certainly not my experience.
House Hunters wisely steers clear of the open house. These are the overly brief weekend showings in which sellers open their homes to potential buyersbut which in todays hot real estate market quickly come to resemble cattle calls of anxious couples who strenuously avoid making eye contact with you as they rush around sizing up the house and potential competitors for it.
Nor does House Hunters accurately depict the mood and temperament of real prospective buyers, who tend to look wild-eyed and tormented and would probably arouse concern among security personnel if transported to any other setting.
In the open houses Ive experienced, the naifs who appear on House Hunters would be trampled and devoured like the herd weaklings in a pack of wildebeest on the Discovery Channel.
After awhile, once we had acclimated to the laws of the jungle, my fiancee and I found a cozy brick rowhouse that seemed perfect.
As we elbowed past the other prospective buyers and walked from room to room, I felt that small shiver of excitement I had seemed to detect when couples on House Hunters had finally come upon the home they would buy. That evening we filled out a mountain of paperwork at our realtors and submitted our bid.
The next day I blew off work and sat expectantly by the phone, about to be educated in yet another way in which House Hunters differs from reality. By this point, I had become an avid fan of the show, but it had still never occurred to me that each episodes happy ending might not mirror reality. When my phone rang, I leaped for it. It was my realtor, who informed me that we had not gotten the housethat in fact 22 others had bid on it and driven the sale price more than $100,000 above what originally had been asked.
Soon after, I became well acquainted with the concept of the escalation clause, the inspections waiver, the failed bid, and generally competing like gladiators for any property deemed livable and available.
I also realized that House Hunters is totally stagedthe couple (almost) always gets the house they want (or an even better one, in the second act), and the shows producers are probably wise to steer clear of markets as competitive as ours which would terrify viewers anyway and kill their ratings. I angrily swore off HGTV and the cheap fantasy it peddled, and sheepishly sought out my copy of Home Buying for Dummies.
Rooting for the Home-Buying Team
Only then did I truly understand the lure of HGTVof what it is that grips me, and my addict-friends, and all those naval aviators overseas who are stressing about the availability of three-bedroom colonials in neighborhoods with decent schools. Its not the reality television that HGTV pretends to be, but an escape from our own real-estate reality into a soothing world where things are different and better; a place to retreat to after those greedy sellers pass on your bid, where one will always find sustenance and encouragement; its what excites people to keep marching out and buying new homes.
My story has a happy ending, though not the type youre likely to see on HGTV.
Several weeks after our initial bid fell through (it seemed like years) our excellent realtor Vincewho, incidentally, could eat the realtors on House Hunters for breakfastfound us the perfect home and shrewdly snuck us in before the open house, preempting a bidding war by submitting a take-it-or-leave-it offer that cut out the competition. (I expect Vince will be surprised to learn hes been nominated for a Congressional Medal of Honor.)
Impending homeownership has brought with it complicated new challenges, so Ive turned to my wellspring of wisdom for guidance. I now possess a master gardeners understanding of landscaping, and Im confident that I can parry most of the feminine-looking accoutrements with which my fiancee seems intent upon decorating our new home. In fact, theres only one area where Ive come up empty.
Ive searched in vain for a show called Mortgage Hunters, but none seems to existperhaps there are aspects of home buying that even HGTV cant spin into fantasy. n
Whether youre buying your first home, or refinancing a current loan, always consider ways that can save you money.
But there are alternatives beyond traditional banking.
Keep it in the family
On average, the interest rate for an intra-family mortgage is a least one full point lower than what any bank or other mortgage lender can offer, says Craig Venezia, VP of Marketing at CircleLending (www.circlelending.com), a company that sets up and manages private loans and mortgages between relatives and friends. Plus, the cost to set up an intra-family mortgage is typically a third of the cost of refinancing through a bank.
But intra-family mortgages dont just benefit the borrower (in case Grandma and Grandpa are a little dubious when you bring up this great idea.)
When structured properly, it can be financially lucrative for the person lending the money as well. The rate on an intra-family mortgage is typically higher than the rate paid on money market accounts, bank certificates of deposit (CDs), or other income-producing investment vehicles.
Take the case of Claire Herrmann and her mother Eleanor. By refinancing through an intra-family mortgage, Claire was able to lower her rate by 1.2 percent which will amount to $33,549 in interest savings over the life of the loan. Eleanor, on the other hand, increased her yield by nearly one percent by making the loan to Claire with funds taken from an under-performing money market account.
It turns out that we both benefited, says Claire. Im paying a lower rate on my mortgage and my moms getting a higher yield than her money market.
Whether an intra-family mortgage is being used to refinance the entire mortgage or just a portion, the key is to set it up right.
Craig Venezia points out that in addition to drawing up standard Fannie Mae mortgage documentation and handling the recording with the county, some intermediaries will structure a payment schedule based on the terms provided and manage the entire repayment process including keeping track of interest and principal payments. They can also provide year-end summary reports for tax purposes. This enables lenders to accurately declare interest income while borrowers can benefit from the federal deduction for mortgage interest paid.
Before considering an intra-family loan of any kind, all parties involved should consult their respective accountants and attorneys.
In my little home inspection business, I mostly run across honest folk. With few exceptions, buyers, sellers, builders and real estate agents tell the truth, and deals go smoothly. I attribute this to what I call The Kroger Factor. Here, people tend to deal fairly with one another, because they know that sooner or later, theyll end up eyeball to eyeball in the aisles of Kroger. But, for every hundred truths told, somebody will slip in a big, ugly lie. Ive heard a bunch of them, and I figure its time I shared.
The floaterSome years back, a man asked me to figure out why he was getting water in his garage and bedroom every time it rained. I knew the answer when I turned onto his block. His street ran downhill, and his house was at the bottom of the hill. Thousands of square feet of asphalt drained right into his yard, and the yard sloped toward his house.
I explained all that, then the customer laid this on me: The man from the building company told me that this house is built on a floating slab, so that every time it rains, the foundation will rise up higher and higher, until it gets so high the water wont come in anymore.
Well, there are such things as floating slab foundations, but they do not ratchet upward every time it rains. There was no good way to fix this mans problem short of building a moat and bridge.
Its a bonus!A woman was interested in buying an older house, so she asked me to have a look at it. When I checked the attic, I saw that the roof framing was charred. I told the woman to ask the owner about the firewhen did it happen, how much of the house was involved, what repairs were done, stuff like that.
When she asked, the owner told her that the house had never been on fire. When she pointed out the charring on the rafters, the owner said, Thats not charring. Thats a special protective coating.
Posts good, labels badAt one brand-new house I inspected, everything looked fine until we got to the crawl space. There we found 16 metal posts, each bearing a big red label with bold black letters: NOT FOR USE IN NEW CONSTRUCTION.
My customer, the buyer, called the builder and complained. The builders troubleshooting guy said the posts were finethey were just mislabeled at the factory. I suggested that the buyer get this in writing from the post manufacturer. Dont you know, the manufacturer never did write that letter.
Dont worry, its just the birdsA young couple bought a house clad with synthetic stucco. Since 1995, synthetic stucco has become famous for trapping water inside walls and causing rot. So the couple asked the sellers if there had been any problems with the walls. The sellers said no. Even so, the couple hired a home inspector (not me) and asked him about all the brown spots on the stucco. He told em not to worry; he was sure that the spots were caused by birds eating holly berries from the shrubbery, then pooping on the house.
Well, it turned out that the brown spots were actually rusty fasteners, which corroded because of water trapped in the walls. And it turned out that the sellers had hired a contractor to cover up problems with the stucco just a few weeks before they sold the house. Last I heard, this one was heading to court.
Watch that spinWhile were on the subject of lies, deception and general chicanery, I feel the need to point this out: If you buy a brand-spanking-new house, there will be some things wrong with it. The problems could be minor, or they could be serious. If you point the problems out to your builder, he might just treat you right and fix things. I hope he does. But I want you to be wary if you hear any or all of the following mantra: Weve been doing it this way for 30 years. Every house in the subdivision is like this. The house passed a codes inspection. The house is guaranteed. Well, chances are, they have been doing it this way for 30 years. Thats not a good thing. Its better, I think, to improve the quality of your work over time. Most likely, every house in the subdivision is like yours. Things that are done well have been done well all over, and things done wrong have been done wrong all over.
No such thing as a Guarantee
Finally, about that guarantee: Try to find one homeowner who ever got something fixednot just patchedunder a new house guarantee. If you find one, let me know. n
Area Home & Garden happenings
The "Signs of Spring" program at McConnell Springs will be a wildflower identification program and discussion of home gardening plans for 2005, Saturday March 5th. For additional information, call 225-4073.
March 10-March 13 Louisville Home Show at Kentucky Fair & Expo Center.
SPRING: For apprentice green thumbs: The Fayette County Extension Service will present Developing Your Green Thumb: Part Three, a multi-week educational-series for the beginning gardener and homeowners. Classes will be 7 to 8:30 p.m. Tuesdays or 10 to 11:30 a.m.-Saturdays March 19 and 22, April 16 and 26 and May 24 at the Fayette County Extension Service, 1140 Red Mile Place, or the Arboretum on Alumni-Drive. Topics include pruning trees and shrubs, ornamental grasses for landscapes, and selecting and-maintaining houseplants. The cost is $7 a class. Advance registration is-required. To register, call the extension office at (859) 257-5582 or the-arboretum at (859) 257-9339.
MARCH 24: Ace's SECOND Home and Garden edition on stands. SUBMIT YOUR HOME AND GARDEN EVENT LISTINGS NOW TO email@example.com.
March 31 - April 3 Central Kentucky Home and Garden Show. Rupp Arena/Heritage Hall.