ÒWhat are you doing with those shopping bags from KohlÕs?Ó I asked my wife Vicki, as she loaded them into the car in preparation for her weekly shopping departure.
ÒIÕm taking them back.Ó she said. ÒThe shorts I bought you are too small and I decided I didnÕt like the color of the new bedspread with our drapes. So IÕm going to exchange them.Ó
My mouth engaged before my brain. ÒWell maybe you should have thought about that first. Now you need to make another trip.Ó
I quickly realized my error as she said before slamming the car door. ÒWell, itÕs your fault. These were the same size shorts I bought you last year. Maybe you need to go on a diet!Ó
Shopping is an experience I try to avoid with the exception of hardware and building supply stores. Browsing at Home Depot isnÕt really shopping. ItÕs research. ItÕs fascinating discovering all the nifty tools that I donÕt have and imagining how they would look hanging in my garage ready for any home improvement project. My handyman skills are limited but the tools would still look very impressive. So while Vicki went to exchange some size defective shorts, I decided to go to Home Depot. Upon entering the store, I noted the return line was longer than the purchasing lines. Obviously, other shoppers were having second thoughts about their purchases.
Returning purchased merchandise for almost any reason has become all too common. Retailers have been promoting Òsatisfaction guaranteed or your money backÓ and consumers have come to expect liberal Òno questioned askedÓ return policies. An item need not be defective to warrant a return. A former client and manager of a Costco store in Sacramento told me that the day after Super Bowl, six big screen TVs were returned. There was nothing wrong with the products. Four customers complained the sets were too large and the other two had simply changed their minds. NordstromÕs, the upscale clothier, is famous for their Òno questioned askedÓ return policies, occasionally taking in returned items that were never purchased from their stores. Auto manufacturer General Motors has introduced a 100 percent money back guarantee. If you donÕt like the car for any reason just bring it back within 60 days and your money is refunded.
WouldnÕt it be great if you could simply return your house upon discovering it didnÕt live up to your expectations? Maybe buy something different or just get your money back. Here are a few true life stories about some clients who wished they had that opportunity.
Brian and Lisa purchased a cute two-bedroom condo in Cameron Park. It was a first home for the newly-weds. A year later they called to tell me they needed to sell the home and find something larger. The family size had doubled with the unexpected arrival of twins and LisaÕs recently widowed mother, decided to move in and help out. Life changes quickly.
Dr. Dick transferred from San Diego to Rocklin. A single father with two teenage girls, he required a home with a heated pool which he had promised the girls to make the move more attractive. It took Doctor Dick all of four months to realize his mistake.
The house had closed in August, just as school started. By December, the girls and their heated pool were the featured attraction in the neighborhood. At first, Dr. Dick was pleased to see his girls were fitting into the schoolÕs social scene. His work schedule required long hours. It was comforting knowing the girls were home with their friends enjoying the pool. But the endless supervision of pool parties, boys and $800 a month pool heating bills eventually became too much. He wanted out. Three months later, he was living in a community with restricted access and with a pool that had restricted hours.
Doug, Sandy and their three boys finally escaped the congestion of Citrus Heights and moved to a home on acreage in the rural foothills. Within six months they had two horses, three goats, chickens and a garden. On the anniversary date of their move I called to say ÒhiÓ and see how things were going. All was not well. The familyÕs social structure of friends, church and community groups, remained in Citrus Heights. Few children lived close by for the boys to play with, subsequently mom and dad were spending less time enjoying the country lifestyle and more time as chauffeuring the boys to school, sporting and social events. The horses were costing more to feed than expected, a fox was stealing their chickens and deer were eating the garden. After only a year they wanted to move back.
There was a time when a recently purchased home could be re-sold within 6 months or a year with a healthy profit. Between June of 2004 and June of 2005 the average selling price for a county home increased $84,000 to $539,000. Despite a mistake in judgment, every one of the above real life scenarios would have turned a profit. Unfortunately, the average selling price of a county home last month was $350,000 and $25,000 less than last year.
Despite making poor investment decisions, we can do well in rising markets. In declining markets our decisions must be carefully thought out. We must plan for contingencies, prepare for the unexpected and often hold on in the face of adversity.
Ken Calhoon is a real estate broker in El Dorado County. He can be reached through kencalhoon.com