Today’s book, Real Estate Smart: The New Home Buying Guide by Matt Parker is a great book for those looking to buy in the Puget Sound. The author is from Burien so most of the examples in the book deal with the Puget Sound region. Moreover, much of the book is based on lifestyle choices as is evident in Chapter 3, “Location, location, location, fitness, fitness” and Chapter 14, “Why you should abandon a housing budget and adopt a lifestyle budget.” These lifestyle choices vary by individual of course but as Mr Parker points out in Chapter 9, “How Do Your Neighbors Affect Your Diet, Relationship Status, Your Spending Habits, and How Often You Ride Your Bike” the people you live around and therefore spend time around affect what you think and perceive as normal thereby having influence on almost all areas of your life including all of them in the title of the chapter. In short, the idea of keeping up with the Joneses cuts deeper than just a well maintain yard and freshly polished car.
My favorite part of this book is that it is not like so many other real estate books out there. While the book is analytical in the topics it covers, it approaches many topics outside the typical everyday questions everyone includes in these types of books such as mortgage, home buying checklist, and what is escrow. There are two examples of this book’s originality I’d like to point out. First, Chapter 6, “Waterfront or War Front? How the property you buy affects your relationship with your neighbors” talks about the type of people who own waterfront property. Waterfront property is the most sought after property in America and 90% of people live within a 2 hour drive of a major body of water. So how does one get water front property? Either you inherit it or you earn it. If you buy water front property today in Seattle you are spending close to $1,000,000 guaranteed. Yet, you can still find some owners that have small house’s built in the 1940’s on harbor drive that costed only tens of thousands of dollars to buy 50 years ago. The reason this is important is that as much as we think property and the earth stays still, it doesn’t. Trees become bigger than originally thought, rain washes some earth away, and fences aren’t always built with a surveyor around. In short, boundary lines, over the course of years, are typically not closely and accurately monitored. That is why Mr. Parker suggest that if you are buying a property, especially waterfront, you should pay for a surveyor. It is the only way to truly know if the neighbor who recently inherited their grandparents waterfront property is encroaching on the dream home you are about to pay millions of dollars for.
The second example highlights the off the beaten path nature of the book. While many people think that buying a foreclosure is a great way to get a deal, the reality is that, if the home is in good shape, there is not much in the way of savings to be had. On average, a foreclosure only sells for a 7.7% discount. While that can be some significant savings, it is only about half the savings associated with what Mr. Parker suggests bargain hunting shoppers look for. If you really want to find a great deal move in next to a sex offender. Now, this is obviously a no go for many people. Piece of mind is valuable in a way that profit can not overcome. This is exactly why the price savings exist. Yet, this is also the quickest readjustment in price that can happen because once the sex offender moves the price instantly changes back. This 12% price savings (more than half your typical downpayment) can be materialize over night.
Until Next time, Happy Real-Estating.