Unload the Milk Truck…Please

Westcoe Realtors, Riverside California…We are always looking for unique ways to properly explain the insanity that is our current real estate market here in the Riverside area, and perhaps the following story will help everyone understand just what buyers and agents deal with on a daily basis in our industry.

 Let us assume you head to the market to buy a gallon of milk…and when you get there, you discover back at the milk section that there are only 3 one gallon cartons on the shelf (priced at $3.00 per gallon), 40 people standing around wanting to purchase these 3 cartons, and a frazzled milk dude trying to decide who should get the milk.  Someone says they were there first, someone else says they REALLY need the milk, someone begins to cry, and finally someone says they will pay $3.10 for the milk.  Someone else hears that and shouts they will pay $3.25 for the milk, and before you can say ”low fat or regular”, the bidding war is on.

In the end, all 3 cartons of milk are sold for $5.00 each to the 3 people who are willing to pay this amount.  Naturally, these 3 people are pleased with their purchase, completely happy to pay the $5.00 they bid for the milk. The remaining 35+ people are not too pleased with this process, but what can they do?

So…these 3 winning buyers of the milk head to the front to pay, and there are 3 checkstands open.  Buyer number 1 heads to the first checkstand, explains the situation, and presents their $5.00, which the checker accepts and all is well.  Buyer number 1 heads to their car with their milk.

Buyer number 2 heads to checkstand 2, but that checker says that the milk really isn’t worth the $5.00 the buyer was willing to pay, and the price should be reduced to $4.00.  Buyer number 2 says they are willing to pay the $5.00, but the checker says no…it is only worth $4.00, and accepts the buyers $4.00 for the purchase.  As you can imagine, buyer number 2 feels like the cat that just swallowed the canary, and leaves the store with the milk before anyone can change their mind.

But buyer number 3 headed to checkstand 3, and there he was greeted by the store manager.  This buyer had witnessed what had happened at checkstand number 2, and wanted to pay the $4.00 for the milk…but was told “NO” by the manager, the price was $5.00.  Buyer 3 was not too happy, but wanted the milk, so they agreed to pay the $5.00…however, the buyer only had $4.00 in cash, so they put the $4.00 out and began to write a check for the other $1.00.  At this point, the store manager said they would only accept cash, and that if the buyer did not have the cash, the manager would not sell them the milk.  The buyer was incensed, very agitated, pleaded their case, and said they would gladly pay the $5.00 for the milk, but had to write a check for the extra dollar.  The manager refused, and ultimately, the gallon of milk was returned to the shelf…where a new bidding process was started again with a new set of 40 people who were now at the milk section.  Buyer number 3 stormed out of the store, (angry as you-know-what), the store did not make the sale, and everybody loses in this case.

…and here is the final kicker…THERE IS A TRUCK FULL OF MILK AT THE BACK DOOR TO THE STORE IF SOMEONE WOULD JUST AUTHORIZE IT’S UNLOADING.

And that is our real estate market in a nutshell. 

The truck full of milk is really all the repossessions the banks are holding off the market, the milk buyers are all the home buyers trying to purchase the small amount of homes currently for sale, and the 3 separate scenarios at the checkstand really represent the mind-boggling array of decisions that are made by either the buyers new bank, or the bank selling the property.  Yes, this is ridiculous…and yes, if the banks would just release the repossessions they already have in their possession, there would be plenty for everyone, and all this bidding and “checkstand” junk would never have to happen.

However, no one checks with us in the industry about all this, so we will just do the best we can with what we have to work with…but all of us hope that someday, they make everybody happy and just unload the milk truck…please.

Take care, and let us know if there is any real estate issue you would like to see addressed on this blog.