Imagine that you wanted to buy a car.
You head to the dealership, and find it to be filled almost entirely with used cars, “The car market isn’t strong right now” the salesmen explains, “Not many people are building new models. But you could commission a custom car if you wanted.” One glance at the price tag for that is enough to convince you that used isn’t so bad. There are no models, manufacturers, brands, and other then a few tacky, cheap models, they all seem to be different, making you check every one in person.
Finally though, you find one you think you like — it’s got the right amount of space, the right look, and the right features. So you turn to the salesmen and ask, “How’s the gas mileage?”
“Dunno.” He answers, “Upkeep costs aren’t really our thing, we just sell them. You could call the previous owner and ask though.”
“Well.” You answer, a bit put off, “What about damage? It’s a used vehicle, do you know if it has any mechanical problems, or can I get an accident report or something?”
“No.” He answers, “You can call the old owner for that too. Or if you like, you can hire your own mechanic to give it a look over before you buy it.”
“I have to hire my own mechanic?” You reply, incredulous, only for the salesmen to raise his hands, shaking his head faintly. “You don’t have too.” He insists. “We spot check them when they come in. And you can always ask the old owners.”
After a moment, he adds. “Just, sometimes, they aren’t always honest — and it’s a lot of money. So really, having it checked out just seems prudent.”
You decide that you can take the bus a little while longer.
People are very good at putting things in context. We would be furious if someone sold us what they knew was a defective appliance, even if they offered to fix it later — but we have no trouble with companies that sell buggy software with plans to patch it after release. If a company tried to sell us a toy that only worked with their special (and pricey) batteries, we’d call it a scam — but we buy cell phones that only work with a specific carrier plan. We apply wildly different standards to different industries — for quality of product, level of honesty, and acceptable behavior.
Consider what standards you hold realty too.
- More then almost any other industry, you are at the mercy of the market. If the market is wrong, the product can drastically spike in price — or just not be available at all!
- Let the buyer beware. You are responsible for making sure you aren’t being sold a bill of goods. Or, in context, a house full of termites.
- When buying a home, there is usually no mention of regular bills — a house could cost $200 a month to heat in the winter, and you might never know until after you buy it.
- Unless you have the money to commission your own house, you cannot get what you want — you have to look around the area and see what’s available.
- There is no “test drive” — unless you rent-to-own, you don’t get to see what its like to live in the building before deciding if you want it.
- A home is expected to be an investment — sometimes, you can’t buy because the seller thinks his home should be worth more then it is. Sometimes, you can’t buy because you’re afraid its’ value might decrease.
Would you accept these from any other industry? No guarantee of product, no return of defective product, product only comes in unique and used models, no testing the product before use, and you have to put down an investment before you can use it — for anything but a building, these standards are ridiculous.
But consider what it would take to fix these problems.
If you could fix these problems by fixing the buildings — if homes were drastically cheaper, and easier to modify. If a house is inexpensive, you don’t care as much if the resale value changes — and it’s not so bad if you have to build your own home, if what you want isn’t available. If a home is cheap to modify and repair, it’s not such a problem if it has some defects that you didn’t spot when you bought it, or if the bills are too high. In effect, every house you buy has the potential to be a custom house — you just want a good location, and something to start with.
You could also fix these problems by fixing the purchase — if people rented and leased homes in the long run, instead of buying. If you are leasing a home indefinitely, the resale value doesn’t matter to you — you don’t own the home. You don’t have to worry about problems with the building, your landlord is responsible for the upkeep of the building according to your contract. It becomes possible to “test drive” a building for a month or two, before signing a long term lease — or even to make deals regarding the buildings upkeep and utility bills.
Would you be willing to live in a “house of the future” that cost a 1/5th of what a traditional house would have cost? Would you feel like you got a good deal, all of the benefit for none of the downsides? Or would you feel like you couldn’t afford the real thing?
Would you be willing to sign a ten year lease — or an open ended lease — instead of buying a house? Would you feel like you did the prudent thing, keeping them safe from instability? Or would you feel like you fell short of your job to provide a home for your family?
Putting things in context helps us understand them — but it can also lead us to foolish actions, just because it’s “the thing to do.” Would you accept either of those solutions? If not, why not? Leave a comment about your interests and reservations, and what things you’re looking for in buying a house. We’ll be revisiting both of these solutions in detail later, and some reader commentary will let us know where your interests lie.




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