Wednesday, November 25, 2009

They Really Said it ! [6]

Bubbles are not that hard to identify. When someone calls for Dow 36K, you know the top is near. At the top of the housing bubble, people were doing far more irrational things than getting into a bidding war and offering 200K over asking with no contingencies.

What can be more than that ? How about promising to feed the squirrels ? How about the potential neighbors interviewing prospective buyers to make sure that they will "fit in" ?

From the Wall Street Journal,

Within a month of putting her two-bedroom house in San Francisco on the market recently, homeowner Linda Gao had five offers, each one above her asking price of $699,000. So before accepting the most-attractive bid, she threw in an extra condition: If you want to buy my house, you have to feed the squirrels.


Home-buyer Allison Love figured the process wouldn't be about anything but the financials, and when she bid $235,000 for a three-bedroom Craftsman-style home in Tempe, Ariz., she expected the sellers to respond with a simple counteroffer or rejection. Instead, they invited her over for a 20-minute interrogation around the kitchen table. "So, why do you want to buy my house?" the sellers inquired, asking as well what Ms. Love would bring to the community, and whether she would participate in neighborhood watches.


Indeed, when Susan Butler was negotiating to buy Ms. Gao's San Francisco property, she was resigned to the feeding schedule. "At that point, I said, 'Yeah, what the hell, I'll feed the squirrels,'" she said. She signed a contract in April, paying $815,000 -- or $116,000 over the asking price. Will Ms. Butler actually feed her new furry friends? "Probably not," says the college administrator. "I don't want to encourage other rodents."

How about that ?

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