Sept. 26, 2009: Looking for a reason to buy real estate? How about free ice cream?
When I was a kid, my Uncle Jack, my mother's oldest brother, told me a story I've never forgotten. He was at a little county fair way out in corn country. Nothing special, just beauty contests for hogs, cheesy little rides and sticky, sugared confections.
Late in the day, the ice cream vendor decided to pack it in, announcing that he was giving away what was left of his inventory. People elbowed their way to the front of the crowd, so eager were they to get something for nothing. They walked away with the ice cream piled into their bare hands, rushing off to their cars, leaving a trail of melted drips behind them.
The lesson I took from my uncle's story was that those folks didn't really want ice cream. They were willing to get themselves dirty, and to get their vehicles dirty, just to have something for free. Most of them probably didn't even eat the ice cream, and they certainly couldn't have enjoyed it. Imagine trying to inhale a glutton's quantity of chocolate-fudge-swirl before it melts all over your clothes.
Could that be what's going on right now with the $8,000 first-time home-buyer's tax credit? I happen to be carrying three listings that are undeniably "investor's specials" -- which means they're a good buy, but they need a lot of work. Even so, my phone is ringing off the hook with agents trying to sell those houses to owner-occupants -- folks with very little cash trying to get an FHA loan so they can buy a house, thus to get $8,000 in "free" money.
Do those buyers really want homes, or do they just want that free money? What will happen to the properties when the $8,000 is spent? Should we dial the clock back to 2006 to see if anything looks familiar?
Meanwhile, the National Association of Realtors is campaigning for even more "free" money to bribe even more otherwise-unmotivated buyers. The only thing that could make the deal sweeter would be a double hand-full of "free" ice cream.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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