June 9, 2013

Urgency And A Trivial Purchase

I suggested a topic on current market conditions. “It’s interesting how the media and REIC have embraced things like flipping houses so casually. Or making written offers with no contingency to the conditions. Pocket listings. Besides the obvious lack of consumer protection, can’t these people remember how open some of this stuff is to fraud?”

A reply, “Urgency is the biggest tool the lying realtors have. And it is sick the way the media/real-estate-industrial-complex play up the emotional aspect, i.e. the Suzanne researched it commercial. See also recent New York Times piece identifying NAR as the second largest lobbying contributor.”

One said, “Stumbling over the dead bodies to get to the punchbowl.”

Another said, “Lots of hype going around. I hear the desperation at the lunch table, of the ‘there’s nothing to buy’ variety. Most have been brainwashed into believing that the crash in 2008 was an anomaly.”

One suggested, “There is an easy fix to some of it which would help first time buyers in rooting out speculative competition. No federally insured loan on a house that was not owner occupied for at least one year prior to new loan. If you were to want to engage in that practice, in the interest of providing loans to people who want to buy houses, then, IMO, you should restrict it in a way that would root out speculation.”

And finally, “Any big purchase a salesperson will try to make seem trivial, of no more import than buying a candy bar. I’ve seen this with cars in particular. Of course, the same approach will be used with houses. Problem is, it’s a lot of money, and you’re on the hook for it. They don’t want you to think to much about that.”

From KLEW in Idaho. “Idaho home prices are rebounding faster than most of the nation. ‘We’ve got a great moment here, the interest rates remain very low,’ said Realtor Judy Higgins. ‘So if you’ve got $3,000 sitting around and you’re a renter, then you probably could afford to get yourself in a house right now.’”

From KPAX in Montana. “You can’t drive through many Missoula area neighborhoods these days without seeing one for sale sign after another - and a lot of sold signs too. Today is the best market I’ve seen,’ Exit Realty Missoula owner Kenin Bailey took a risk and joined the realty business just as the housing market collapsed. So he has some perspective on what a bad housing market looks like - and this is not it. ‘There’s a shortage of inventory in the $250,000 and less market and with the increase of activity there have been a lot of people who have decided to get back into real estate,’ Bailey said.”

“That means if you’re a buyer, you’ll have to be pre-qualified and ready to move, and that may not even be enough. ‘It’s been a very strong buyer’s market over the last five years and as of lately there have been a lot of multiple offer situations, and sellers are getting their asking price or more,’ Bailey said.”

“Matt Pickett has been shopping around for a couple months to find a single family home. He says it hasn’t been easy, he’s found good listings, but in some cases he’s been outbid. ‘One property there were six offers by noon, so that was pretty crazy,’ Pickett said.”

“Austin James with the Missoula Organization of Realtors says part of the growth is due to banks easing up. ‘The ratings of interest rates have changed in the last four years, you’re also seeing a great climate, to buy,’ James said.”

The Herald Tribune in Florida. “The final remaining co-conspirator indicted in a 2007 real estate flipping fraud scheme was convicted by a federal jury in Tampa of conspiracy and three counts of wire fraud affecting a financial institution. Sarasota real estate agent J. Patrick Brester now faces a maximum penalty of 30 years in federal prison for each count and a $1 million fine.”

“Brester, who once worked at the real estate firm of prominent Sarasota attorney David S. Band, was charged last summer for his role in illegally flipping condominiums in Palmer Ranch during Southwest Florida’s housing bubble. Brester was among four men who have now all been found guilty of various crimes in the scheme. But he was the only one who opted to fight the charges in a courtroom rather than accept a plea agreement with prosecutors.”

“The flippers bought nine units at Vintage Grand in February 2007 for $1.9 million. They then sold the condos to a partner for $2.2 million that same day through a purchase financed with mortgages from SunTrust and Fifth Third Bank. The fraudulent transactions allowed the group to get more loan money than they could have otherwise — and entitled them to $324,000 in cash-back incentives from Vintage Grand.”

“His indictment did not keep Brester from flipping real estate. In the past year alone, he grossed more than $540,000 for himself and his investment clients by buying and reselling nine houses in Sarasota and Manatee counties for more than twice what he paid.”

Bits Bucket for June 9, 2013

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