The Mystery Housebuyer

What Egypt can teach us

Egypt Sherrod, host of HGTV’s Property Virgins Photo: courtesy

A year or so ago, HGTV’s House Hunters program was under fire for manipulating the homebuying stories it portrays. The reality show, critics cried, did not portray reality. But another HGTV house-buying program is more realistic, and it continues to have a valuable lesson for us today in San Francisco.

The program is called Property Virgins. Each episode features Atlanta-area real estate agent Egypt Sherrod and a first-time homebuyer or buyers. Usually, though not always, the “property virgins” are a young couple, often looking to purchase their first place after having gotten married or landed that first solid job. Sherrod meets with them to learn their (often wildly unrealistic) wish list and their (often woefully unrealistic) budget. Then she shows them a series of homes that fit their requirements.

If this were House Hunters, every single episode would end with the property virgins losing their, um, first-time status and selecting and buying a home. But on the Property Virgins TV show, just like in real life, it doesn’t always end so simplistically. Sherrod is always needing to be more than just a property agent; she’s also an advisor and even a counselor, nudging her clients to adjust their wish lists to make them come into line with their budgets and with the available properties.

But the lesson for us comes in those not infrequent episodes in which the property virgins retain their virginity at the end of the program. Sometimes they get cold feet, have second thoughts about a home on which they were just about to make an offer. And sometimes they keep finding reasons not to like homes Sherrod presents them, even when the homes meet their budget and tick off every box on their must-have list. Those episodes often end with Sherrod having a frank chat with them. Are they really not ready to buy a home? Would they be better off taking a break in their house hunt for six months? The relief on the faces of the clients is often obvious. They realize they are not going to be pressured into a decision they might regret.

In other words, it’s a true reality show. And in San Francisco right now, with inventory constrained, prices soaring, and many house hunters flush with cash, the pressure can be strong to buy the first halfway decent property you can remotely afford.

Unless you print your own money or have inherited a fortune, you are probably better off listening to Sherrod rather than emptying your kids’ college fund to buy a $1.3 million fixer-upper in an allegedly “up and coming” neighborhood. You are probably better off waiting until the price spikes subside and the inventory of properties for sale increases (which lags the price spikes, which are what draws to the market home sellers waiting to make the most on their sale).

Prices are bizarre right now. Our home was purchased less than two years ago, and it has nearly doubled in estimated value. (I guess that new curtain we put up in the guest bedroom really added value.) We won’t be looking to sell it during this market peak; we bought it to live in, not to sell. But we do amuse ourselves by checking the estimates on a regular basis and seeing its estimated value rise by a ridiculous $10,000 or so a week.

We know too many people who purchased their homes during the last boom period in Bay Area home prices and who, even though their homes are also increasing in values each week like ours is, are still underwater. To avoid becoming that type of an owner, you might need your own personal Sherrodian intervention.

It is quite possible that even in these hyper-priced times, you will come across the one home that makes your soul sing and that fits your budget. Even if it hits or bursts the top of your budget, it might not be crazy to go for it if you are planning to own it longterm and can still swing the finances. And, of course, if your millionaire parents just tragically passed away, leaving you with more money than you know what to do with, buy with abandon.

Because the market will turn.

When it does, it will catch a lot of people paying super-sized mortgages they can barely afford. The post-crash retrenchment by the financial services world has supposedly reduced the number of people getting poorly vetted loans they can barely handle in the best of economic conditions. So we can expect less of a foreclosure disaster the next time valuations collapse. But there will still be plenty of people — even those who paid cash for their homes — who will be stunned or kicking themselves in a couple years when the home they bought for $1 million is valued at $720,000. If they need to sell it then, they will wish they had learned from Sherrod.

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