“A Lot Of Demand On Too Little Cash” In San Diego
The Voice of San Diego reports from California. “Every weekend for nine months, Marti Ummel has been making trips to real estate offices in North County. Ummel makes the trips in protest, asserting with printed signs that she and her husband were defrauded by a Re/Max associate in 2005.”
“She says she and her husband paid about $150,000 more than the recent homes in her Carlsbad neighborhood had sold for, a detail she says their Realtor, Michael Little, neglected to mention.”
“‘Even though it’s always ‘buyer beware,’ you think that the Realtor is looking out for the client’s best interest,’ Vern Ummel said. ‘You have to do your due diligence, but you can only work with the information you have. And we weren’t given the right information.’”
“Marti and her husband take to the streets with their signs that say things like, ‘It’s our money; we want justice.’”
“The Ummels admit that the house in question cost more than a million dollars. And after selling their former home in San Rafael, the couple needed only a $300,000 mortgage on the Carlsbad property. ‘Nobody’s going to feel sorry for us,’ Marti Ummel said. ‘We can afford to get screwed. But there are other people who can’t.’”
“In the heated real estate market that peaked near the end of 2005, real estate prices soared, and buyers often bid much higher than sellers had asked for. But they usually did so knowing what the comparable sales in the neighborhood had been.”
“The Ummels say Little didn’t provide the appraisal of the property until a week before they closed the sale. And when it did come, it matched the seller’s asking price exactly, and was based on sales that actually had larger lot sizes and better amenities, Marti Ummel said.”
“On May 29, they made an offer on a four-bedroom, 3,697-square-foot tract home in the Serenada neighborhood in Carlsbad. The seller, Vicki Urzetta, was herself a real estate agent and had advertised a selling price of $1.175 million for the home.”
“The Ummels made an offer at that price, and Urzetta countered with a $1.2 million price. They agreed to pay that, despite concerns that they hadn’t yet seen an independent appraisal on the property.”
“The Ummels’ copy of Little’s request for the appraisal shows double underlines and exclamation points next to the notes for the appraiser, John Contento: ‘Purchase price $1,200,000; Need yesterday — sorry!’”
“The Ummels claim this as evidence that Little influenced the appraisal so that they would feel more comfortable buying the home at that price. Another, almost identically sized, home on the same block had sold six weeks’ previously for $1.095 million, but the Ummels say Little didn’t tell them about it.”
“Roger Lopez, an appraiser who wasn’t involved in the sale, said that requests for price-matching aren’t uncommon for appraisers to receive. Because appraisers’ businesses depend on being asked to do appraisals by mortgage brokers, they sometimes feel ‘undue pressure’ from the mortgage brokers to match the price they’re asking for.”
“‘That doesn’t relieve the appraiser of the responsibility to do their job,’ he said. ‘But there is a gray area because nobody’s perfect.’”
“The Ummels are in the process of settling suits with both Contento and Horizon Pacific Financial Inc., the mortgage brokerage Little was affiliated with when he made their loan.”
“Under the current slow market conditions, work is less-than-plentiful for many real estate agents. A lot of times, the acquisition and retention of clients is a matter of perception and reputation. So, clients who enter a parking lot with picketers decrying the office’s integrity may consider taking their business elsewhere.”
“Marti Ummel said she may continue picketing even after the suit is settled. She wants more than money, she says she wants to make sure this situation doesn’t happen to anyone else. ‘I will not stop picketing until we feel that Re/Max has been fair with us,’ she said. ‘I could be doing this for five years.’”
The San Diego Business Journal. “Slower sales and rising rates and payments on adjustable rate mortgages continues to drive foreclosures higher for homes in San Diego County. An online market for distressed properties, said 12,623 properties entered some stage of foreclosure in December, up 66 percent from December 2005.”
“The site lists 4,466 properties in pre-foreclosure and 4,166 bank-owned properties in San Diego County alone.”
“Condo converters are suffering the first signs of a burst in the real estate bubble. San Diego condo converter Maisel Presley successfully managed conversion of 1,000 units since 2001, yet recently went into default on one of its major projects in Oceanside.”
“Cathryn Low, a principal with Lee and Associates’ Multifamily Advisory Group, confirmed that a number of converters in San Diego are in default or trying to work out agreements with their lenders.”
“Low said, ‘There is a lot of demand on too little cash’ when units do not sell. ‘There is no question that over time the existing inventory of condos will be absorbed but it is not going to happen in the next year or two; it could take another three to five years before the existing inventory of converted condos is absorbed,’ said Low.”
you think that the Realtor is looking out for the client’s best interest
Uh… I guess the moral of the story is,that it pretty much sucks to be stupid.
Probably a wide spread misconception, but at least on this side of the fence (canada) the realtors make no bones about the fact that they always work for the seller’s best interest because they’re the ones paying the meal ticket
Considering all the crap that has been going on, the Ummel’s should count themselves lucky that their ignorance only cost $150,000 (although they may yet still lose their house if the have an ARM on the $300K morgtage)
it’s the same here in the States, and I’m sure these idiots signed something to that effect. Unfortunately for them they had dollar signs in their eyes at the time. But let’s all remember, “it’s not about the money”.
Depends on the state. In NY, a buyer’s agent is supposed to be on the buyer’s side. For example, they are not allowed to tell the seller how much the buyer would spend, and can tell the buyer how much the seller would accept. The seller’s agent of course has the opposite constraints.
I also forgot to mention that unless you sign a disclosure form, then you have no way of telling who they work for (which means the answer is probably not you).
Sorry, I should have said in Cali.
“unless you sign a disclosure form”
The disclousre form Useless from Realtors. Get a RE attorney who know the law regarding sale of properties. Realtors are a grade near barbers. Attorney is much better.. no vested interest!
At least in NY you don’t need a realtor, but you do need an Attorney. In practice, most people will have both. The realtor is involved until you agree on a price and then your (buyer’s) lawyer reviews the seller’s attorney’s contract and handles the closing.
The ridiculous part is that the buyer’s lender also needs an attorney, which the buyer of course gets to pay for.
In NY, a buyer’s agent is supposed to be on the buyer’s side
Anyone whose compensation is positively correlated to the selling price is working for the seller, not the buyer.
If you want someone who works for you, get an attorney or a professional negotiator and pay them an hourly fee.
I don’t think people who put down 900K on a 1.2 million purchase are going to lose that house, arm or no arm.
As they said, they can afford to be screwed.
Personally I’d rather hand the keys to the bank and have demolished credit than lose $150k. That’s probably 5-10 years’ worth of savings for most people.
Future consumption is going up in smoke. This downturn has all these little nasty surprises lurking around and they will bite you in the face in an unexpected manner. The monster will even attack the ones that had nothing to do with this monster from the FED and the BOJ.
Hand the keys to the bank!? Am I missing something here? I thought they put $900,000.00 of thier own money into the purchase. How would the bank lose money?
Sorry, should have stated that more clearly. In my opinion, these people are worse off than some FB who put no money down and simply hands the keys back to the bank. The FB doesn’t lose any money, just has trashed credit for a while. These people on the other hand have lost $150k, which is a loss that would take most people 5-10 years to recoup.
I don’t think that it would be wise for these people to “turn the keys over to the bank” in a fit of buyers’ remorse over their perceived loss of $150,000. They were buying at the top of the curve, and are now upset because they paid for froth. I don’t think that anyone who can afford to put $900,000 down on any house will have to wait 5-10 years to recoup their supposedly-lost $150,000. If they turn the keys over to the bank, then they’ve lost their $900,000 down, as well. That doesn’t make much sense, jbunniii. I just never would have bought an overpriced house — I just would have rented it and waited until prices crashed in a few years….but then, you never lived in Kalamazoo in the ’80’s….lol
Forgive the extreme example, but if Bill Gates loses $150k on a bad investment, is he worse off than a FB who puts nothing down and loses the house? Not a chance.
I would MUCH rather be in their position, than be a FB, with the stress of having to scrape by each and every month. While it would take many people 5-10 years to recoup the $150k, my guess is that either a) for these people they can recoup the $150k much faster than that, or b) while recouping that $150k, they get to live in a nice house with little stress.
If you believe that the value of the home is ~$900k, then your choice is to:
1) live in a $900k house with $600k of equity; or
2) have poor credit, no savings and no home equity
Yes, the homeowner’s net worth dropped more than the FB, but there is no way the FB is better off.
Lots of people overbid by 5% - 10% and didnt know they were the only bidder. Coworkers sold their home but only have been receiving one offer only… Realtor told them… Accept the first offer you get. And very often its over asking.
Had the Buyer knew they were the only bidder, then they would have low balled. But the realtors dont want that. So they make up multiple bidders and put on their best poker face.
Realtors only care about the commission - that it!
In this biz, whether it be on the lending side or the RE side, the ignorant get preyed upon. These guys see ‘em coming from a mile away and start licking there chops. The very last thing in the world that they want is an educated buyer or borrower. When this is all over, my profession will most likely be considered the lowest form of humanity, and deservedly so. So all you lawyers, you’re off the hook.
Thanks in advance for taking the title from us, and for all the fees we’ll be collecting from your group over the next several years.
Your welcome.
Never ceases to amaze me how many among the general population actually believe RE agents and mortgage brokers are fiduciaries (hint approx 99.9% of the buying public). Most people honestly have no clue that RE intermediaries have no legal responsibility to tell the truth (or at least not make unsupported baseless claims), nor consequences when they fail to do so.
Not exactly true, but you’re on a roll so we’ll go with it.
Maybe not exactly true, but you and I know how it goes, don’t we.
Totally true… heck yes.. compare that to a real estate attorney.. someone who practices contract law. Passed the
Bar Exam and had ton of experience. May cost you 2-300 per hour… but heck you wont get screwed..
You are naive to believe that.
Make that “less likely to get screwed.”
What an attorney (who is legally and contractually obligated to represent only the interest of whoever’s faying the fee) can do for you is to let you know what’s hidden in the fine print. They can’t prevent you from signing, but your eyes will be open. That’s worth paying for, IMHO.
Look at it this way: How many of these people who are now bitching about having their loan terms switched without being told (which I’m sure happens all the time)paid an attorney a few hundred bucks to review the documents? How much money could they have saved if they had?
Nobody but you can ultimately prevent you from being screwed. But qualified people who unequivocally work for you can be very, very useful. If you listen to them, which you’re more likely to do, since you’re paying for them.
The transfer of real property is a legal transaction. Legal transactions are why we have lawyers.
–Shannon
With all the resources that’s out there, people can make a fairly decent guestimate of property value, within a 5% margin. They should’ve done their homework and not be entirely reliant on the agent.
my 2 cents… value at 1997 and add yoy appreciation of 4.5-5.5% to cover inflation will get you todays value.
They are freaking idiots…
Unless you are a multi-billionaire who is likely to die in the next 90 days, you’d think you’d put in the legwork, time, energy, research, and effort in a deal that was worth $1.2 million dollars. Sheesh. I guess for some folks when numbers get this high it just seems like Monopoly money, or something.
Might as well be monopoly money. Its at best paper dropped from Ben’s helicopter. At worst just some bits of computer code, and they didn’t do anything to earn it, they are using 900K from sale of previous home that I’m pretty sure they didn’t pay 900K for.
Its not like they are paying in gold coins or something.
I think the problems is that people think of realtors the same way they think of lawyers. A lawyer has an ethical obligation to act in his client’s interest. If the lawyer doesn’t act in the client’s interest, he can get sued or be professionally disciplined. I don’t think there’s a similar obligation, or consequences, for a realtor.
Exactly –RE intermediaries are NOT fiduciaries with any legal responsibilities as such. If a stockbroker were to make any claim similar to “it always goes up” or “15% is in the bag”, they’d lose their license and get sued.
Absolutely true. This topic used to get kicked around on this blog a while back, not so much lately.
Not absolutely true.
mrincomestream,
If you would care to illuminate exactly what fiduciary duty a real estate agent has to his buyer, I’m sure we’d all appreciate it.
MrI -
Yes, please elaborate. I have been agreeing with you alot lately, however, not on this one.
I believe a realtor would create a fiduciary relationship with a buyer once they have signed a agency agreement with the realtor….Correct me please if I am wrong…
A real estate agent in CA may have fiduciary duties. The link below is to the California Civil Code, which defines some of these duties. In particular, section 2079.16 lists the duties (which must be spelled out in a written disclosure to the parties) that the real estate agent has to the buyer, seller, or both.
http://tinyurl.com/2qp298
The Civil Code does speak of fiduciary duties.
I always get a kick out of the disclosure forms where the buyer acknowledges that the realtor works for both the buyer and the seller. How is that supposed to work?
I believe this is referred to as being “Lucky Pierre”
scdave you are correct, which is why a lot of agents won’t work with Buyers Agent it’s a topic that has been heavily debated for year in the RE Brokerage Community. It’s one of those gray areas. But it basically really depends on how greedy you are I personally have no problem with it. My general policy is the first one to the door with a do-able deal wins the prize. It’s a policy that has kept me fed for many years.
In my response above I was responding to this statement:
“A lawyer has an ethical obligation to act in his client’s interest. If the lawyer doesn’t act in the client’s interest, he can get sued or be professionally disciplined. I don’t think there’s a similar obligation, or consequences, for a realtor. ”
and this one:
“RE intermediaries are NOT fiduciaries with any legal responsibilities as such”
Now LALawyer conveniently added “buyer” to his rebuttal. Why? because he damn well knows as well as I do that in Ca. a broker has a fiduciary relationship to the Seller which is passed down to agents listing/selling and if he doesn’t know that he should spend about 5 minutes in his legal library to figure it out.
Now if the buyer has not worked out a fiduciary relationship with the selling agent even though the selling agent may not know the seller from adam his responsibility still falls to the seller. The debate comes from whether or not that the selling agent can legally and effectively relieve himself from that responsibility to the seller.
California law is heavily tilted to protecting the seller.
The thing that I find interesting about the article with the picket lady is that she is settling without her day in court. I have a sneaking suspicion is its because she has been tipped off through the arbitration process that her case doesn’t have a snowballs chance in hell of being successful. The other parties figure it easier and cheaper to pay her off, because after all some lunatic in front of your business with a picket sign is bad for business guilty or not.
IrvineRenter, it’s called dual agency. Another big debate in the RE Brokerage community. Explaining how it’s supposed to work would require a novel.
Yea, I know. I actually held a real estate license for a while in Florida back in the 90’s (never used it). IMO, it is a blatant conflict of interest that cannot be ignored or explained.
You can tell this lady is and idiot because she expects to settle with the agency and still continue her marching around with the “I’m a Damn Fool” signs. Yeah, that will work!
Lawyer = Passed the Bar Exam and works for firm dealing with Contract laws. Lots of experience working for a professional law firm on Contract Laws and representing clients in court. One notch higher than the Accountants passing CPA exam.
Realtor = Passed the State Exam . One notch above barber and did 2-3 hours of practice. May bearly know English….
“May bearly know English….”
If my Anglish ain’t escaping me I’m thinkin’ youre’ a meaning:
May barely know english? :-}
I agree with IrvineRenter. Dual Agency is no agency, as per common law. An agent has a fiduciary duty under common law to represent the interest(s) of the person(s) he/she is representing. So he/she cant very well represent parties on opposing sides of a contract negotiation, just as an attorney could not walk into court and represent both the plaintiff and the defendant. Dual Agency is a fraud being perpetrated by the CA DRE.
ChrisUSC-
Not too debate you because I personally find the debate on this subject to be fruitless, but saying it’s fraud may be harsh. The reason I say this is because you have way too many r.e. agent/attorney’s practicing this if it was fraud I doubt they would risk being disbarred. Also it’s not a CA DRE thing it’s covered in the Civil Code. Check the link posted by WaitinginOc above.
The bottom line is that the fiduciary responsibility of the RE agent is to the seller. Every house is unique. If a buyer is willing to pay twice as much as “other comparable houses” have sold for, it isn’t the responsibility of the SELLER’S agent to talk them out of it. If they were to do so they would be guilty of violating thier responsibility to the seller to get the best price for their property.
The fact that it also results in a larger commission is irrelevent.
You really were born yesterday, weren’t you?
Sorry, but if somebody’s income is based on the sales price, then they are, by definition, working for the seller. He who pays the piper calls the tune.
To really balance out the interests, the buyer’s agent should be paid more money the less his/her client pays for the property. The less I spend, the more you make. That’s working for me, at least in my book. As it is right now, the only person with any financial interest in a lower price is the buyer. Who probably knows nothing about real estate transactions. Which is why they seek out “professional representation.” If all of those “representatives” make more money for every dollar the buyer spends, what chance do they have of getting a fair deal?
I have no problem with seller’s agents being paid on commission. If I was selling, that’s what I’d want. But for buyers? Not a friggin’ chance. My interest as a buyer is to pay as little as I can possibly get away with. My representative’s compensation should reflect my interests, not the other side’s.
–Shannon
i think they need to make it mandatory for a buyers’ agent instead of of one agent representing both sides. yes they were morons, they know the language, they know its’ a business where people get screwd left and right, idiots. But those people who know nothing should have some sort of protection. A buyers agent to negotiate and the very least mandatory attorney for the buyer representing their interests at their expense…
but yes idiots pure idiots… I cant repeat that enough.
and whomever said appraisal should be done by 3rd independant party or some gov’t agency that is uncorruptable yes that would solve this problem very easy. The appraisal would always come below what brokers project so that people would have to own up to their greed.
I thought demand was desire backed by purchasing power,but i guess a word means whatever i want it to mean…
“I thought demand was desire backed by purchasing power”
No Sir…. This is however a reputable definition of prostitution.
Do you think that the President of the United States of America is working for the ordinary american citizen ? That’s what is soo funny with people. They really still have confidence after all these years of being abused. I just can’t wait to see another mega real estate ENRON. Realtors are “facilitators”. They facilitate the screwing of people.
Some of the SDCIA Bulls are decidely bearish these days. Kudos to this senior poster for telling it like it is:
“I have been tracking the price per square foot for OC resale SFHs. I think this is the best measure of what is happening in the market. It eliminates the distortions caused by condos and new houses. It also eliminates, at least to some extent, the distortion of changes in the mix of houses sold.
“June 2006 was the peak month for this measure in OC. Below is a chart that shows the monthly change since June of 2006 compared to the same months in 2005. It seems to indicate a fairly severe downtrend is in the making.
“If you look at the price change from June 06 to Dec 06, the change is -7.2%. That annualizes to -14.4%. The average of the last three monthly changes is 1.79%. That monthly rate annualizes to 21.5%. Thus, the rate of decline seems to be accelerating.
“Of course, six months is not a very long period of time to look at, but if this trend holds, the RE crash scenario may finally be underway, at least in OC.
“On the other hand, the market did recover somewhat in the first half of 06, so perhaps we will see a replay of that trend in 07 and the soft landing scenario will be back in play.
“Needless to say, I do not have a crystal ball, but the price pattern of the last six months appears ominous to me.”
Link: http://tinyurl.com/2qp7ue
Calculated Risk has a great scoop on Fremont’s “Stop the Presses!” issued today.
http://calculatedrisk.blogspot.com/
“Fremont is typically at the forefront when making changes to programs, I would urge you to expect our competitors to be making similar changes in the next few weeks.”
does anybody else hear that sucking sound?
in the comments they posted this . It would be nice see a few of these back to back to see how they change over time
damn, still can’t get those links right
How about this
Rate Matrix
Warning… PDF file.
The link is a PDF.
Thought I posted this, but it vanished. Some of the bulls at SDCIA are turning very bearish. Kudos to this poster for his frank assessment of the San Diego market:
“I have been tracking the price per square foot for OC resale SFHs. I think this is the best measure of what is happening in the market. It eliminates the distortions caused by condos and new houses. It also eliminates, at least to some extent, the distortion of changes in the mix of houses sold.
“June 2006 was the peak month for this measure in OC. Below is a chart that shows the monthly change since June of 2006 compared to the same months in 2005. It seems to indicate a fairly severe downtrend is in the making.
“If you look at the price change from June 06 to Dec 06, the change is -7.2%. That annualizes to -14.4%. The average of the last three monthly changes is 1.79%. That monthly rate annualizes to 21.5%. Thus, the rate of decline seems to be accelerating.
“Of course, six months is not a very long period of time to look at, but if this trend holds, the RE crash scenario may finally be underway, at least in OC.
“On the other hand, the market did recover somewhat in the first half of 06, so perhaps we will see a replay of that trend in 07 and the soft landing scenario will be back in play.
“Needless to say, I do not have a crystal ball, but the price pattern of the last six months appears ominous to me.”
Link: http://tinyurl.com/2qp7ue
so who’s fault is it that you are so stupid that when you spend $1 million you can’t do some basic research on comps in the local area?
‘You have to do your due diligence, but you can only work with the information you have. And we weren’t given the right information.’”
So, Ummmm. This person didn’t have access to the internet? No access to “information”? Only the biggest purchase of their lives, right. No Realtordotcom or County Property Tax Data Base? We are suppose to believe they are millionaire morons…. but smart enough to sue when “appreciation” evaporated.
This lady sounds like a complete douchbag. Somone should call the people they sold their house to and tell them to slap a lawsuit on her. The value of a house is only the actual value for one day and that day is the day a buyer agrees to pay and a seller agrees to sell. Plus this bitch new she was over paying when she agreed to pay more than asking. And she acts all altruistic saying she can afford to take the hit but others can’t and thats why she is protesting. Id like to punch her right in the throat.
I was thinking the same thing JTCC. I doubt that she was complaining when she was taking the money from her buyers, who undoubtedly overpaid.
The information is always there.
It’s not like they are naive about money. I think they are both University and Non Profit Fund Raisers for a living!
http://lynx.csusm.edu/COE/Giving/index.asp
http://www.phillipsontheweb.com/assoc.html
he’s at the bottom
i am not sure how much they are paid but i know grant writers are paid a certain percent of the grants they get. something like up to 10 percent. it is a lot.
I find this old windbag and her sign terribly annoying. You know, should prices have skyrocketed after she bought, her friends would hear non stop jabbering about what a great buy she made. When things didn’t go her way, she got pissed, and quickly found her scapegoat. If anything, she is as guilty as anyone for this bubble. By grossly overpaying for a house, she set the new comps making it even less possible for people to afford a home. Another fool and her money easily parted. Cry me a river lady.
Right. There’s some neighboor down the street right now moaning at her RE Agent.
“Well, the place up the block sold just last year for 1.2 million? And you want me to list for 850,000? I’m not leaving that much of MY MONEY on the table! Do you think I’m STUPID?”
Exactly
I wonder how they got their money. Lottery?
I had dinner with a realtor last night who said another realtor was shot somewhere East of San Diego by a disgruntled client. I forget the guy’s name and I’m not sure it made the news. Sorta reminds me of Iraq.
The FB insurgency.
SAN DIEGO — Sheriff’s deputies arrested a suspect Saturday in the slaying of a 64-year-old East County man, NBC 7/39 reported.
Michael Ray Jennison, 36, was arrested at 12:16 a.m. near Globe, Ariz., by the Gila County Sheriff’s Department, officials said.
Jennison was wanted in connection with the shooting death of a Lakeside man in a condominium complex Thursday in the 9700 block of Winter Gardens Boulevard, sheriff’s deputies said.
Officers called to the complex at about 4 p.m. on a report of a shooting said a man was found dead on the floor of a condo unit. The victim was identified as James Marcel Magot.
Jennision is a resident in the complex, police said. Police said they believe he shot Magot twice, once in the back and once in the head.
Magot was a longtime Realtor at Willis Allen Real Estate in La Jolla. He worked there with his wife of 42 years. He was the listing agent for the unit in which he was shot, NBC 7/39 reported. Margot was also a retired Marine Captain who received a purple heart in Vietnam.
At the time of his arrest, Jennison was stopped for a traffic violation, police said. He had three handguns in his possession, but the arrest occurred without incident, officials said.
What a tragic story…
I am not sure, but didn’t they recently stiffen the law and make RE agent murder a misdeamenor?
Joel, stop it. You’re making me laugh and I really should be working.
Joel,
You put my keyboard in extreame danger.
ROTL.
Got popcorn?
Neil
Seriously, I don’t know how a lot of these guys sleep at all. One of the good things that comes from refusing to sell toxic loans or being any part of shakey deals is knowing that none of my past dealings are going to pop up and haunt me one out-of-the-blue day. Unfortunately, you’re going to be hearing a lot more of this. When the unstable FB’s start to realize they’ve been had, look out!
a realtor named Magot? Is that made up? Did the story say anything about motivation for killing him?
They forgot to add the missing “g”! - : )
Wasn’t there a realtor on here named “Carney”.
“Step right up, another lucky buyer!”
LOL! Must have been that dud from “Full Metal Jacket”
Guess he didnt like being called Gomer! It was only a matter of time when this bubble starts to create lots of casulties… its no surprise it happened in San Diego. All of us in Northern Cali have always known, many jobs in SoCal are Real Estate based. They eat and breath RE all day down south. Creeps me out!
Go Giants!
“She says she and her husband paid about $150,000 more than the recent homes in her Carlsbad neighborhood had sold for, a detail she says their Realtor, Michael Little, neglected to mention.”
“‘Even though it’s always ‘buyer beware,’ you think that the Realtor is looking out for the client’s best interest,’ Vern Ummel said. ‘You have to do your due diligence, but you can only work with the information you have. And we weren’t given the right information.’”
And who is in the middle of this mess?
The newbie rubber stamp appraiser in the hip pocket of the mortgage loan sleaze.
Stupid f*cks need to be gettin’ to their state’s real estate appraisal board to file a grievance and gettin’ a lawyer to sue the POS appraiser and the mortgage company who conspires with agents to employ known number hitters.
I agree. Buyers are supposed to “beware” that the independent appraiser, the one person in the transaction who is supposed to be neutral, has become a shill for the seller? I don’t think so.
My question is, how much of this crap has been caused by the banks no longer holding most of the mortgages that they write?
I’d be willing to be, that if loans were still held in the banks’ portfolios, that much of the bullcrap wouldn’t be going on.
thoughts?
Yeah, but do you think the bank gives a shit about a 300000 mtg on a 1200000 property? This is not a foreclosure risk… the bank doesn’t care.
The real scary part is that most people do not realize that this has been the status quo for about 3 years now. This is how it works and nobody has been getting busted, until now. It always takes declining values to get people to start blaming others.
The appraiser mentioned in this story probably makes around $120k per year, and tells his buddies that all he does is find sales that reach the value needed, fill out the form, and collect $400. His buddies both say, “that sounds easy”, he says, “it is”.
His buddies now become his trainees and the cycle repeats itself over and over again. This is one reason why the number of appraisers has doubled in the past 5 years, with almost half being trainees.
These poor schmucks are too stupid to even realize that what they are doing is fraud. They actually think that they are offering good customer service when they make the value needed on the order form. The truth is that most people with appraisers licenses in California could not determine market value without someone else telling them what number they need, serving as a baseline value to start from.
Value pumping is on 80-90% of ALL appraisals completed by “independent” fee appraisers who work with mortgage brokers. Even scarier, 80% of all purchase originations are done through mortgage brokers. Gee I wonder if this is a small reason why property values went up 20% per year and why all the values on appraisals were “magically” always exactly what the borrower estimated his house to be worth?
The only way for a borrower to insure appraisal independence is to hire his own appraiser, ether selected from the phonebook, or state/federal websites. This is how you ensure independence.
Competence? Now thats a tougher nut to crack. But you can start by calling all appraisers in town and asking them if they do “comp checks”. Stay away from the ones that say yes.
And weed the rest out from there.
Side note: Just got back from a foreclosure appraisal in The Village in Laguna Beach. Market decline for my product (small cottage on 1800-3000 sf lot, no view) is running about -15% from 2005-2006, sometimes more. Sales in mid 2006 were
1.15M-1.2M, most recent closed sale is 1.050M, with an even more recent pending sale at 965k, and 3 actives between
950-1,010M. Total market decline for this product is 15-20% since middle of 2005. Ouch!!
Of course if you call the local “skippy” appraiser, I’m sure he could find 1.7M for you in this neighborhood. He’s that “good”.
OC Appraiser,
What would you come in w/4 $$ appraisal, knowing about the current market, and wanting to protect your clients interests for the LB property?
I’m not sure I understand “what would you come in w/4 $$ appraisals”. As far as my client’s interest is concerned?
I am bound by the Uniform Standards of Professional Appraisal Practice (USPAP) to NOT be an advocate for anyone. As an independent appraiser I protect my report and the data that makes up my value conclusion. My clients make decisions based on my knowledge of the market, which make up my appraisal report.
In all actuality I dont work for anyone other than the integrity of my report and findings. If you are asking what I think the house I did would be worth in Laguna Beach, well, I am also bound by USPAP under the confidentiality section to keep that info between me and my client. As an honest, ethical and knowledgable appraiser, all I have to market is my knowledge of the market. I dont give ball park values or estimates. I do accept appraisal assignments at reasonable fees. Laguna Beach properties start at around $450.00 due to complexity. Anyone who does it for less, is probably sending out their trainee to “fill out” a form.
Its not a REAL appraisal. Real appraisals cost money and very few with licenses actually know how to do them.
Thanks OC. Yes I was looking for a $ figure as to what those properties may price at, based upon the downward direction in prices for LB area, and that asking prices are below recent sales.
Understand your need for discretion. Thanks for your informative commentary.
OC Appraiser,
Thanks for posting. I always like to read what is happening in the trenches.
OC Appraiser: What are “comp checks” and why should we stay away from those who do (maybe the answer will be apparent with the definition)? TIA
A comp check is what mortgage brokers use to get an appraiser to promise a value before accepting the assignment. Brokers call appraisers in a given area, ask for numerous “comp checks”, and then order the appraisal from the guy who gave the highest predetermined value. Basically, the broker says, “hey Joe, I need an appraisal on this house in Newport, its a 3 bedroom, 2 bath etc.” “What value can you give me”?
Keep in mind, I havent even seen the house.
This practice is VERY common. In fact, most brokers will not hire an appraiser who does not “ballpark”,
“value range”, “pencil”, or “comp check” a property for them. Its all the same stuff, just different names.
Not only is this practice a violation of USPAP, but it is a tactic that brokers use to make sure “they dont waste anyone’s money”.
I guess the appraiser is supposed to work for free.
Unfortunately, most appraisers dont even know that they are conspiring with the broker to a predetermined value opinion, which is a Federal offense under USPAP. The appraiser even signs a Certification that is part of the appraisal report that states they did not accept this assignment based on a predetermined value opinion.
Also note that a range of value IS an appraisal, and MUST conform to USPAP.
So, if you get some appraiser who does comp checks, you basically got someone who either doesnt know the rules, or thinks he doesnt have to play by them. Call to question his ethics and integrity, which are main attributes of a good appraiser, along with the ability to analyze a market.
The toughest part of this business is remaining independent and unbaised, while trying to survive, where sharks and snakes are at every corner. And everyone wants something for nothing and guarantees.
Its like going to you dentist and asking him to take a look at your teeth. But you will only pay him IF he gives you good news, otherwise, screw him, you’ll just find a dentist who will tell you that you DONT have any cavities.
Thanks oc,i picked up a trainee license last year,and the only job offer i got was a 2 year unpaid internship…with Ron Broyles in marin county.my father was an appraiser for 30 years and my thought was that i could make a decent living and do a good job.Curt Thor in novato has resuscitated the marin-sonoma appraisers association,and they are making life uncomfortable for skippy in both counties.btw if you need an appraisal in marin,Ron charges 3-4 times the going rate,provides a real appraisal,and has plenty of work…it takes a while, but if you know your business and don’t tolerate the BS you can make a living as an appraiser.
this is a drop in a bucket of sh*t so deep, I cant even make a complete sentence about how ridiculous these people sound.
offered the ask, and then paid even more…
cant be their own ignorance. Sue somebody, piss away some more money…..perfect
The correct term is Skippy for a newbie + The appraisal has some gray area 100,000-150,000 on a Million Dollar property is not out of the norm. It’s the loan originator not the appraiser who screwed the buyer you should know that by now hd74man.. Another thing maybe the appraisal came in low but the stupid borrower was putting down so much $$ it didn’t matter.. Of course the lender is suppose to tell the borrower this but you know how somethings slip through the cracks…
As the RE market tanks, there will be more and more ugly stories of fraud and deceit. Hey, that is human nature.
these people were NOT FRAUDED!
they are I-D-I-O-T-S
Evan the smartest will fall to realtor tricks.
Yes they may be idiots, but it didnt take much to contaminate the RE market.
The way it should work is this: Lender orders an appraisal from an approved appraiser, and loan officer has no contact or influence with the appraiser. The buyer/borrower gets a copy of the appraisal as soon as done. The agent writes a good appraisal contingency in the contract so that the buyer can stop the purchase if appraised value comes in under the purchase price.
In the heat of 2004/5, I had three loans where the appraised value was significantly under the purchase price. I immediately contacted and gave a copy of the appraisal to the buyer. They reviewed it and in all three cases, cancelled the purchases. They all then found other houses to buy which went well and they bought the houses and were happy that they did not overpay. In these cases, the buyers received a valuable service from their lender. There are other places you can get ….”sensible” lending besides my bank. The bottom line is to choose your agent and lender very carefully.
I guess in your case you can add appraiser to that choice list as well.
maybe, maybe not..
if it was up to me, the bank appraisal would be part of the listing process..in other words, if you want to list your house with a licensed broker, then a bank appraisal must be part of the marketing material.
..and yes, the appraiser would be picked at random..
So lets say its all cash deal as some were in SF Bay Area due to Stock Options. Gun ho little 25 year old who worked in Yahoo from 1995-2000. Or a Google Employee in 2005… Now worth around 5Million! Asked how much for that 2000 sq home in Palo Alto… seller says 1M… buyer says “OK.. its free money anyway”. No apprasial need here… All cash and all wrong. But guess what It did happen way too many times like this. Fact is prices doubled from 1997 to 2000. So now the market price is total hosed due to “Free Money” stock options. The appraisals going forward would show price of 2000 sq ft home for $1M as legit market value. Im not kidding here….
This wouldn’t be a problem if downpayments hadn’t been eliminated.
Weeeeeeeeee I overpaid for my million dollar home, weeeeeeeeeeeeeee, please feel bad for me. weeeeeeeeeeeee
“Marti Ummel said she may continue picketing even after the suit is settled.”
MARTI, I CALL “BULLSH!T!”
“‘Nobody’s going to feel sorry for us,’ Marti Ummel said.”
Hey, it looks like he finally got something right:)
Hey! Marti is the gal, Vern is the guy.
Marti and Vern. What a beautiful couple. The essence of “it’s somebody elses fault”.
OMG. Here’s Marti and Verns photo album:
http://www.webshots.com/search?new=1&source=top_mh&query=member%3A+ummel2
One of the photos is titled: New Home in Carlsbad
If that is a million+ house then I know that the end of the bubble is close at hand.
An interest portrait of a typical FB.
If that is a million+ house then I know that the end of the bubble is close at hand.
You’d laugh if you saw what $1M got you around Santa Barbara, CA. That Carlsbad place looks pretty nice in comparison.
But how much has been spent on plastic surgery? I know I am behind times, holed up in rural new england, but sheesh! That is considered attractive?
Marti Ummel said she may continue picketing even after the suit is settled. She wants more than money, she says she wants to make sure this situation doesn’t happen to anyone else. ‘I will not stop picketing until we feel that Re/Max has been fair with us,’ she said.
———————-
So, which is it, Marti? Will you stop picketing when you feel that Re/Max has been “fair” to you (i.e., paid you enough money) or when you believe that Re/Max has changed their ways so that others aren’t treated the same way you were? I’m betting on the former.
Mati and Vern are from Marin County. God’s Country, and they are charmed and blessed, and rules for the little people don’t apply to them. They are exempt from Caveat Emptor. They are special, don’t you know that? They couldn’t do any basic research on their own for themselves, but they want a brownie medal for looking out for the poor little people who might get hurt for being stupid. They want to play the gracious victims and champions of the new wave of lemmings who will also cry foul and join the cult of the victim.
They are victims alright. Victims of their own stupidity.
I wish somebody would knee-cap her.
Now, now. And here I was all ready to make fun of them on my blog and you stole my thunder. But yeah, if you know Marin then it is pretty funny.
And they moved to SoCal. Isn’t that supposed to be anathema here in Marin. I think there is a county law that you have to be drawn and quartered for leaving God’s country for SoCal. :U
um… they are missionaries. ya, that’s it… umm… they decided it was offensive to the universe if they did not take their charm and grace and attempt to colonize a new locale and bring more people to the cult of the NIMBY and land of entitlement. That’s why they were in Southern California- spreading the word, and seeking a new Eden for Marinites.
Funny. Vern graduated from Claremont Theology school. But his specialty is organizing the raising of money for schools. He was last employed at Dominican here in Marin. I guess he is doing God’s work raising money down at UCSD.
Sorry…contracted to Dominican from some firm. I even found a Christmas 05 photo of Vern and Marti and how much Vern was making late 90s early 00s. God I love the internet (and fear it).
So how badly do you think I would get flamed if I blogged this? Sort of a little exposé.
LOL!!
You guys captured it very well.
Wouldn’t be so funny if wasn’t true… this place really is “something else.”
“God I love the internet (and fear it).”
Note to self…. remove imploder “nude safari love fest” photos from Webshots.dot.com
I think it is exactly the kind of story you should blog about. Tales from the Bubble…
If I do, I am going to quote you athena; that was classic.
Nicely put Athena,
That uncanny ability to combine abject stupidity, wealth, entitlement, scapegoating, and braying self-righteousness must be what makes the Bay Area so special. Where to they teach that stuff?
These folks are narcissists of a very pure form. How many annoying stories like this before we’re through???!
you guys remember the scandal about how much these non-profit orgs spend for administrative purposes and raising funds. it was outrageous.
Encore! Man this is why I love Blogs, no wonder the mainstream print media is going extinct.
Condo conversions really sicken me. They come in disrupt all of the tenants lives and destroy affordable rental housing in markets where it’s needed most, all for the holy buck. Societal Hyenas and Pukes.
Former Beverly Hills mayor Mark Egerman purchased a very nice old apartment complex in Westwood, kicked all of the tenants out, and gutted the old place, removing every bit of charm. His intentions are not very clear, as he told the tenants they would be sold as condos, but word got out he may be renting them again. He was subsequently sued by a handful of the remaining tenants, but won in spite of Californias tenants rights laws. As an attorney, he was friends with the judge, and in court, even kissed the plaintiff’s attorney during the proceedings. Bizarroland.
“even kissed the plaintiff’s attorney during the proceedings.”
Kissed her right on the ass, no doubt.
Rent Control and Tenant Laws in California are a joke very easy to circumvent if you are in the know.
Muni’s in the past have protected the rental housing stock…It insured affordable housing for people that work in the community….The pressure by industry & ABAG (Silicon Valley) to provide affordable housing turned the muni’s over unfortunatly….
This story hits the nail on the head. Both realtors and sellers fail to disclose to buyers the true nature of this speculative market. That’s like not telling a buyer that a house has termite damage.
Speculators are greedy, but that does not excuse realtors and sellers from committing fraud by outright lying or omitting facts.
I don’t quite understand your comment about “sellers failing to disclose to buyers the true nature of this speculative market.” Why would or why should a seller tell the buyer, “Hey buddy, thanks for your offer, but it is way too much for my POS house…I think I will counter your offer a few hundred grand BELOW your offer. I’d hate to see you over pay in this highly speculative market”. Buyers need to have more diligence and the LAST person they should place ANY trust in is a realtor. A realtor may be of some help in the buying process by driving you around, opening lock boxes, and helping with the paperwork etc,… but never, never ask them for any intelligent advice or listen to unsolicited advice. Keep them OUT of the decision making process.
Here’s what realtors and sellers should be saying to buyers:
“The recent nature of the housing market has been extremely speculative in nature. This has caused a housing bubble which is currently in a downward cycle. Comparable
home values have fallen X% over the last #months. The
property you wish to purchase may decline in value
based on current trends”.
This is exactly like disclosing to a buyer termite damage or some other fact that may affect the value of the property. It’s not in the seller’s interest to disclose defects in a house, since that lowers the value of the house, but they are required by law to do so.
That’s funny. As a seller, I’ll list my house’s problems and leave the market analysis to the buyer.
What if it turned out the seller and realtor were wrong, and the property appreciated 20% over the next year? I would assume the buyer would then owe that gain to the seller, since the purchase was based on faulty and inaccurate information.
All the seller is required to do is disclose to a buyer a problem or potential problem. They are not required to repair the problem. If, after signing a disclosure document, the buyer wishes to proceed, so be it. You will notice that my disclosure states that values MAY decrease. It is up to the buyer to determine if the market will go up or down.
If someone is selling a home they are required to conduct some kind of inspection to determine the condition of the house. Law requires the inspection to be conducted in such a manner that potential or existing problems will be disclosed to the buyer. Real estate agents are also required to tell the truth about existing or potential problems.
But your theory of this requirement being useful, would I think, require some degree of accountability for inaccuracy. Otherwise, why bother. If the phrase, “may go up, may go down” satisfies the requirement, don’t you think that will be the one widely used? How would you determine the required disclosure? Look at the variation in attitudes about the value and price trends in RE right now. The majority of the public believes, or wants to believe that prices will turn around and head back up.
We have enough legal problems in the REIC, without adding the logistical nightmare of enforcing “RE trend guessing” on people who have taken a 2 week course in sales.
If you think business is tough for appraisers, who do you think will employ the services of a contrarian real estate agent…..
“The recent nature of the housing market has been extremely speculative in nature. This has caused a housing bubble which is currently in a downward cycle. Comparable home values have fallen X% over the last #months. The property you wish to purchase may decline in value based on current trends”
The US already has a system in place to cover this… it’s called “Buyer Beware”. Also known as “Do your own Homework”, “Think for Yourself”, “Know what your getting into”, and “Read the contracts”…. You know, basically the basis of the Capitalist System.
Seems like your plan would require the Realtors to “predict” the future.
And if he got it wrong and the market shot up? Would the Seller be able to sue him for “misrepresentation”?
No, it does not require the seller and realtor to predict the future. Here’s an example. A property is located in a flood plain which has a history of flooding , on average, every 50 years. The seller and realtor don’t have to predict when the next flood is going to occur, all they are required to provide the buyer with is the information concerning the area. The property may flood next week or in 100 years.
All I am saying is the seller and realtor are required to provide the buyer with the history of the market concerning the property so the buyer has the information required to determine if the price of the home is fair for the moment and if values are trending up or down. They are not required to predict the market nor are they liable for what the market does. They are only required to tell the truth and provide accurate information about what has happened and is currently happening, just like they are required to provide and accurate inspection report.
If a buyer goes to a realtor and asks if home values are increasing or decreasing, and if that realtor says that they’re going up the realtor is committing fraud if he knows home values are going down.
This wouldn’t be such an issue with me if it wasn’t for the fact that realtors are lying to buyers by telling them that home values are appreciating . This is fraud, plain and simple. “Buyer beware” does not excuse fraud.
Realtor’s belong to the NAR, that’s why I use the word instead of real estate agent. The NAR runs ads on the radio claiming that their members are “real estate professionals” and “must follow a code of ethics”. They have ads telling buyers to contact their members for real estate advice.
Lying to a home buyer about the current downward housing market for the purpose of selling a property at a higher price is fraud. It makes no difference that the buyer is a jackass.
Clearview –
I embrace your concept, but here’s an example of how this doesn’t work, from personal experience:
In Sept/2001, I bought a little house in Chico, CA for 210k, and sold it in Sept/2003 for 330k. Then, in Feb/2004, among other deals, bought a house here for 555k, and sold it 16 months later for 775k.
Guess what the guy paid for the 555k house, back in 2001? If you guessed 550k, you’d be right. Don’t ask me why it didn’t sell in 2003/2004….. it was on the market for 569k for about 9 months, and then he took it off the market because there were no takers. I sure didn’t steal the place at 555k……
To my point: How do you get a trend from these transactions during that same time frame (2001-2004)? What do you tell a prospective buyer? I realized a 25% annual appreciation on that little house in the same town during the same time period, as someone who realized nearly 0% appreciation. I’m sure he and I have drastically different views on investing in RE in this area. To me it was a boom, to him a bust.
(ps., “Him” was an RE investor from the SF-BA, that spills more money in the gutter than I earn in a year, so I don’t feel too bad….)
Your example is excellent. If you recall, the market in California dipped after the Dot.Com crash. It began to pick up in 2003 with very low interest rates and the accelerating use of exotic loans. That RE guy bought the
$555k house in 2001 at the market peak or maybe a little on the down slope. You bought the house on the upswing in 2004, you sold at the peak in the summer of 2005. The guy who bought from you, if he still has the house, is going to take a big, big hit. Everyone who is a professional RE investor knew in the summer of 2005 the the market was peaking, that the market was a speculative bubble and everything was down the tubes in 2006. A professional selling a property to a nonexpert after the 2005 peak was wrong to do so unless the professional explained the nature of the market to the novice. From the summer of 2005 the trends are very clear.
I am assuming that you sold the house in 2005 to a RE professional or to someone who had the risk explained to him, since you express no regrets about that transaction.
Geez, Dude put down the bong are you kidding me?
No, I’m serious. There is not a realtor out there that didn’t know this was a bubble that, at some point, was going to turn down. But they lied to buyers and told them the market would always be up, or at worst, flat. Look at what the NAR has been saying for the last year AS PRICES WERE DROPPING!
Buyers are stupid, but realtors and sellers should not be let off the hook. They saw a bunch of pigeons and committed fraud to get their money.
IMHO …..The real estate agents have a fiduciary realtionship with the seller but this does not entitle them to misrepresent the property/neighborhood or commit fraud toward the buyer or not disclose known material facts ,or commit fraud toward the buyer in favor of the seller .
In prior lending cycles it was not in the interest of the real estate selling or buying agents to have a buyer overpay to much over market value because the lender and appraiser would kill the deal because the lender wouldn’t go along with it .
In the recent mania ,with sub-prime lender/ appraisers were hitting the mark on purchase prices ,regardless of the prices being inflated .A market value appraisal lost it’s meaning and realtors were no longer concerned about market value ,but rather what lender/appraiser would hit the mark .
One could make a case for collusion between realtors and hit the mark lender agents /appraisers and I would not be surprised if some lawsuits come up .
it looks like in the case of the Ummels that they pay 25k over list ,so that tells me they were lead to believe that a bidding war was taking place on the property that was already 150k over market .
A buyers realtor can advise a buyer that a property is listed to high and they can show them recent comps of the area and should .
That being said ,a buyer should also do their own homework because apparently realtors are no longer concerned about appraisers not hitting ,which means a buyer can overpay and they are not being protected like they were in prior lending cycles .
Here’s what realtors and sellers should be saying to buyers:
“The recent nature of the housing market… blah blah”
Wrong, wrong, wrong.
The seller of anything - be it a house or a beanie baby - is not supposed to do anything but disclose the material facts of the item for sale only. It is up to the buyer to decide on an appropriate price to pay. If the buyer wants to pay a ridiculous price based on their ideas of current sales or future appreciation, that’s their problem. That’s the way markets work.
Market conditions are a material fact.
No there is not excuse for them encouraging at least or outright committing fraud under the excuse of “everyone does it.” So prosecute them. Let the perp walk begin. They won’t soon forget the consequences of their actions then.
“‘Even though it’s always ‘buyer beware,’ you think that the Realtor is looking out for the client’s best interest,’ Vern Ummel said. ‘You have to do your due diligence, but you can only work with the information you have. And we weren’t given the right information.’ Marti and her husband take to the streets with their signs that say things like, ‘It’s our money; we want justice.’”
What they want is distributive justice, but what they got is market justice. Maybe they ought to check out Freakonomics and read the chapter about how Realtors in Chicago sell their own homes for higher prices than the amounts for which they sell their clients’ homes; that way, maybe they can avoid getting screwed some day when they try to sell their Carlsbad home.
not a prayer, they already got the best lay of their lives when they bought into that house.
I often will listen to cash 1700 AM out of SD area. They have a number of shows that are essentially hosted sales pitched for realtors or MBs.
It’s hillarious to listen to the shills talk about the market being past bottom and then have caller after caller looking for a way out of their bad investment, or suicide loan, or both.
Check it out for a good laugh and to find out what the enemy is selling. I also like KLSX 97.1 in LA on Saturday mornings for the same type of deal.
That Lord of Lending dude on am 1700. All he could say in 2005 was that it is different in San Diego. No land, in-migration, prices will not go down and the one that really killed me was that builders had learned their lesson and would no longer build homes on spec. Gee… I see empty unsold new homes in every development. Builders build, no build no first draw, no first draw no cash. End of road is reached before they realize that can’t even unload the POS built prior to cessation of building.
The worst radio guys are on 1510 AM in the Phoenix area. These crooks go on and on about how the market will hit new highs and that “real estate is still going up, even though there have been these negative articles in the newspaper putting down real estate and scaring buyers…”
They are all full of you know what.
Good thing they had a relatively honest (ha ha) realtor working for them, so they only overpaid about 15%. How can you be so ignorant while shopping for a $1M house? Maybe if they had spent a little time looking at asking prices and comps in the neighborhood they wouldn’t be where they are now?
What a bunch of losers.
well said. Totally agree. It’s hard to fathom idiots spending a million bucks or more and not doing your total homework. I cant even spend 15-20K on a car and not go over everything on the contracts, comparable cars and prices, etc… EVERYTHING
and now theses clowns are picketing… that’s the funny part!
How embarrassing is that. Stand outside with a big sign that says “We’re Idiots, save yourself”. I hope she’s wearing a bike helmet, in case she slips on her tears. We don’t want any more “handicapped suits” than absolutely necessary.
“Roger Lopez, an appraiser who wasn’t involved in the sale, said that requests for price-matching aren’t uncommon for appraisers to receive. Because appraisers’ businesses depend on being asked to do appraisals by mortgage brokers, they sometimes feel ‘undue pressure’ from the mortgage brokers to match the price they’re asking for.”
“‘That doesn’t relieve the appraiser of the responsibility to do their job,’ he said. ‘But there is a gray area because nobody’s perfect.’”
WTF, so now appraisal fraud is a “gray area?”
“gray area” - Please don’t sue me!
Why even have one done then? This whole bubble was nothing but fraud by everyone in the daisy chain! A
As long as no one said anything everyone just shut up and collected their commissions.
Exactly, if it is all a fraud, what is the point?
I’m sure all the real estate and mortgage and appraisal people involved in this transaction have learned a very valuable moral lesson from all this:
Try to only cornhole couples that both work 70 plus hours a week to pay for sh#tbox that you sell them… that way you can rest assured that they’ll be way too tired to “picket” your office on the weekends.
That’s deeper than you think Irvine Renter
Maybe this is typical in California but getting COUNTERED by the seller when you meet the list price is hilarious. These people must have the big “L” for Loser growing out of their forehead.
At the time, they were afraid that guaranteed money maker would get away from them.
I couldn’t figure that one out, either. Maybe the buyer added some pain-in-the-ass contingency or personal property throw-in.
its amazing that they accepted the higher price even when they have such a high down payment and could probably get any house they wanted. they should have countered with 1mil even leaving a 100k in morg payments. my opinion anyway.
Unfortunately, I think it was very common in California the last couple of years. Personally, I don’t think that I could ever get myself to pay over the listing price, regardless of the market, because it just seems so wrong. I mean, if you list a property at a particular price, it seems you should be willing to sell it for that price (and probably for some amount below - but not higher).
They probably said they had another buyer that was willing to feed the squirrels. Realtors liked to make people think there was multiple offers, even when there wasn’t enought GFs to fill the bill.
It’s worse than that. Last year, the L.A. Times ran a story about how buyers would actually write essays to the sellers on why they deserved to have their house - this was after multiple bids had been submitted - all higher than the asking price. This may have been contained to the West side, but it happened.
This was not limited to LA. My mom sold her 60-yr-old house, had multiple offers and most of them had essays. No pictures tho….kinda missed that. This was August 05. House sold for 20K over asking, but it was a credit back. I didn’t know at the time what that was all about. Buyers RE agent told us not to worry about the appraisal, and magically the appraisal came in at that higher price! Our RE agent helped us accept an offer and close quickly as he was anticipating a turn in the market.
This was in East Bay, San lorenzo.
Yes, of course it was.
Happened to me in San Fernando Valley. I was the seller and theytried to charm me with stories about their family. It didn’t work, I sold to the flipper who came in at 45K more…he is now trying to resell and may become the first short-sale in the neighborhood!!!Sucker!!!!
Actually, it was quite common in California during the height of the boom. Just goes to show how insane the whole thing was, and yet people just went along with it. Fools.
Did anyone here make people write essays? If so, please post.
See my comment above. We did ask for essays, but that’s because we were emotionally attached to the ol’ house. Once we saw how much people were actually willing to pay, we looked at each other and changed from sisters selling their mom’s old house to pay for her retirement to business-women. Took about 15 seconds. We didn’t read essays after that.
A friend I work with made people write essays. He had *19* offers for his house, and sold it for $90k over asking price. This was I think in 2000, in northern CA - during the “first step” of the upslope of the bubble. Prices paused after that for about 2 years due to the pop of the tech bubble, then continued on up to even crazier levels.
I wrote one along these lines:
Dear Hopeful Locust,
Since you have requested I use my valuable time writing some banal essay in order to be ALLOWED THE OPPORTUNITY to spend my hard earned money on your overpriced POS to fund your geriatric retirement, my offer will have expired by the time you are done reading this, or have died, whichever comes first. I want nothing to do with you or your miserable house you obsessive control freak. I regret having wasted these few short moments of my life on such trifling matters. To hell with you.
Sincerely,
Not Your FB
PS - I killed your squirrels
My in-laws sold their house in 2005 to someone who wrote them a lovely essay even though my in-laws didn’t ask for it. It also happened to be the high bid. They did a sealed-bid auction on their house, a large fixer-upper in one of the nicest parts of one of the nicest suburbs of Boston. Given the amount of work the house needed and some of its oddities (3000 sq ft. house with 1 1/2 baths!), I was shocked when it sold in the low 7 figures. I doubt the buyers would make any money on it, but they seemed committed to staying in the house for many years.
This is what happened to me twice when I was looking at condos in 1999 - didn’t buy. Twice I offered list price and the seller countered for more. That pissed me off so much. I refused both times. Both times the condo supposedly sold to someone else then the sale “fell through” and they contacted me again to see if I still wanted it - yes at the exact same price and not a penny more. So I didn’t end up buying anything. I’m still pissed about it.
In Oct 2005, I was ballsy enough to counter an offer that was already $20K over asking. In hind sight, that was stupid. But the buyers accepted the offer even though I had no other offers yet/was no bidding war (it just hit the market). Phew.
But in this market environment, that would be idiotic. Sellers should get $20K (or more) under asking and like it.
“The site lists 4,466 properties in pre-foreclosure and 4,166 bank-owned properties in San Diego County alone.”
8632 homes in pre-foreclosure or bank-owned, eh? SD ziprealty shows
15,113 SFRs+Condos in total; is there any way to determine how many of the 8632 are included in ziprealty’s listings (which I assume are all MLS-based)? No matter how you cook the data, a large share of homes currently or soon-to-be on the San Diego market appear to be distress sales.
Is there a rule of thumb ratio between distressed inventory:total inventory that is a tip off that the market is in the tank or headed into the tank in the near future?
The 4166 bank-owned is an impressive number, but why would NOD homes be listed for sale, since even now the vast majority of NODs never make it to foreclosure?
I don’t know about that; are you saying that most folks who get NOD avoid foreclosure? And that will be the same this time as others? I am not a lender, so I cannot say…
GS: Yes, most NODs don’t go all the way through to foreclosure. The last stat I saw (I think it was for CA) was that 33% of NODs were ending in foreclosure (which is up a lot from earlier years, and it looks like it’s still rising). Here is a RealtyTrac press release that has the latest foreclosure stats:
http://tinyurl.com/3dtzbu
Nevada is now #1 (rate of foreclosure, with CA #14) and Texas is #1 (total number of foreclosures, with CA #2). The stats break down the number of NODs and foreclosures in the given time frame, but they don’t show how many NODs are going to foreclosure (just how many of each occurred during the covered period).
Of course the last stats you saw showed this. The market was not yet falling, and most distressed owners could sell and walk away with some cash and an intact credit rating.
Check out the status after another year.
Here’s what it says on Marti and Vern’s signs:
“Caution information is free but my ReMax agent in So California failed to tell us about homes that sold on our block 4 much less $”
“Caution beware All ReMax offices are independently owned and operated For us it meant no accountability. We want justice it’s our money”
So let’s see: What if the opposite had happened. What if they got their house for $150k less than comps and the seller called them seeking “justice”. Would they pay the extra $150k or would they boast to all their friends how they made a killing?
“That’s different”
“We want justice it’s our money”
“No justice, No peace! No justice, No peace!”
There goes ReMax again!…Always trying to hold down the millionaire white man!
“There is no question that over time the existing inventory of condos will be absorbed but it is not going to happen in the next year or two; it could take another three to five years before the existing inventory of converted condos is absorbed,’ said Low.””
Meaning when investors have bought them at 50 or 60 percent off …. through REOs.
50 or 60 percent off? Some of those won’t ever sell (due to high HOA) and others won’t move for less than 70 percent off.
Yes, the nicest ones will go for 50 to 60 percent off.
But those won’t be the fun ones to watch! 
Got popcorn?
Neil
“The Ummels made an offer at that price, and Urzetta countered with a $1.2 million price. They agreed to pay that”
——————————————————————–
wow, they agreed to the counter without the agent even having to resort to his next trick, the “seller has multiple offers above the asking price.”
They paid over $1M for a tract house?
Yeah, I agree. These people would be a good target for an ebola outbreak.
Ebola? That disease is so-o-o 10 years ago. How about bird flu? Much more in the news these days.
“The Ummels admit that the house in question cost more than a million dollars. And after selling their former home in San Rafael, the couple needed only a $300,000 mortgage on the Carlsbad property. ‘Nobody’s going to feel sorry for us,’ Marti Ummel said. ‘We can afford to get screwed. But there are other people who can’t.’”
First of all….”we can afford to get screwed”? Uh…no. I don’t care how much I have, I cannot “afford” to get screwed out of my money. That’s a stupid statement if I ever heard one.
Secondly: My guess (and this is only a guess) is that they bought their San Rafael house a long time ago, thus, the ridiculous up tick on the value of said house. Granted, it is Marin county but when I was buying my first house in Berkeley for $39k (circa 1979), houses over there were in the $200s and up (anyone can jump in with specific numbers for SR for that time period). Fast forward to 2006 and the tag on that $200k house is greater than $1M. So here we go….let’s move to Carlsbad and plop down a cool $900k. For them, easy come, easy go….they may not have had to go in their pocket (house ATM)….and out comes “we can afford to get screwed”.
On the other hand (and I don’t think this is the case, or why would they be marching in protest), they may have had the money in their hip pocket to buy the house but would rather have the $150k pad their retirement than be “stiffed” out of it. If they are trying to “help” other people, then good for them. But are they really? Or, are they trying to convince themselves that they are?
They just made mistakes all the way around on this transaction, many of which have already been noted by previous posters.
BayQT~
It’s been quoted before but it just has to be said again.
“They bought their ticket. They KNEW what they were getting into. I say, Let ‘em crash!”
How embarrasing for these folks to actually go in public and admit to the world that they were absolute fools that were easily parted from their money. I’ve overpaid for things but never $150,000!
Where the hell were these folks when I had all those bridges to sell?
What are Marti and Vern going to do when they realize their $1.1 million house is worth only $700,000?
Sue the market?
Sorry to obsess about those two bozos, but stupidity fascinates me.
Why didn’t Vern and Marti check out this web page first?:
http://www.urzettahomes.com/North_County_San_Diego_CA_home_sales.shtml
‘I will not stop picketing until we feel that Re/Max has been fair with us,’ she said. ‘I could be doing this for five years.’
Translation: “My time is worth absolutely nothing.”
“The Ummels admit that the house in question cost more than a million dollars. And after selling their former home in San Rafael, the couple needed only a $300,000 mortgage on the Carlsbad property. ‘Nobody’s going to feel sorry for us,’ Marti Ummel said. ‘We can afford to get screwed. But there are other people who can’t.’”
Someone buying a 1.2M house is not looking out for quote “other people who can’t”. I’m sure they only associate with others of the ilk that think they can afford million dollar and up pieces of property and any of those ‘who can’t’ should be fleeced and any who can will suck it up and move on.In this current state of the market the RE can just ignore them, perhaps take them some cookies and coffee (photo it and put it up on his wall), or put out posters of his own saying ‘If they bought your house and the property went up $150K would they refund you the buyer that $150K’. Something seems to smell on the deal and I like to see more of their buying and selling history.
Salinasron,
You be suprised how fast homes climbed back in 2000.I do recall someone purchased a home in Sausalito for around 350K back in 1996 or so. Now days its all over $1.5M …thats 4.5x Lots of freespending people buying homes due to cashing out stock options. Like drunken sailors!
‘There is a lot of demand on too little cash’ when units do not sell.
This is pointless obfuscation. Those for whom English is the first language would say “supply exceeds demand” and leave it at that. If it ain’t broke, don’t fix it.
I believe She is referring to the cash strapped position the developers find themselves in. They are in the middle of a conversion, needing cash flow to continue and finish. The demands are their construction loans, marketing budgets and operating expenses. The flow of cash was supposed to come from deposits on yet to be completed units. The deposits aren’t coming, yet they are still finically obligated to continue building and paying their overhead. Hence a lot of “demand” for payment and too little “cash” flow to pay it with.
The end result is receivership and foreclosure on the project.
I am getting a $hit load of hits on my blog with the following google: “ReMae filed Bk”
Anyone find anything out there?
*”ResMae”
LMAO, I haven’t heard anything but I’m surprised they have lasted this long. They have no underwriting process “fog mirror have loan” is their motto
The implode-o-meter must be fed!
Bwaaa haaa haa!
I haven’t heard anything, but I’d be SOOOO shocked to hear they went under. Shocked I tell you.
Got popcorn?
Neil
Nothing on Yahoo News.. there just a dinky subprime lender going down… no biggie
Yeah, I loved the quote last week from some Wall Street analyst.
This is nothing to get worked up over there will be many more like this. Referring to subprime lenders going Tango in Uniform. (toes up)
Chomp!!!!!
ty
Signed………Implode-o-meter
They probably got an option ARM and will whine about their mortgage broker in 2 yrs when they hit 125%.
I’ll bet the Ummel’s don’t have any problem with the price they received for their home in San Rafael. I wonder how fair they were to the buyer of that home?
A buddy of mine bought a condo in Mission Valley near the stadium for $235,000.00 about 18 months ago. There is a identical condo being short sold for $175,000.00 in the same complex. That means at best he has probably lost 25% of his $235,000.00 starting price. I forgot to mention that he quit his job in San Diego and moved to DC and could not afford to sell the condo. He rents it out at a $400-$500 loss per month, but wait that is on the teaser rate for his 3 year Interest only loan. He is absoloutly SCREWED when his ARM resets in 18 months. Even if he refinances into another risky IO ARM his rate will jump from ~4.5% to 6%. OUCH!
Maybe reverse amortization will still be around in 18 months? I doubt it!!
Ouch,
That brings down two markets:
Mission Valley
DC (the soon to be next king of surplus condos)
Got popcorn?
Neil
He won’t be able to refi if he’s under water.
“In the heated real estate market that peaked near the end of 2005, real estate prices soared,
>>>>and buyers often bid much higher than sellers had asked for.
Forgot to say … its all from fake bidders made up by Buyers and Sellers Realtors.
repost…
“In the heated real estate market that peaked near the end of 2005, real estate prices soared,
>>>>and buyers often bid much higher than sellers had asked for.
“In the heated real estate market that peaked near the end of 2005, real estate prices soared, and buyers often bid much higher than sellers had asked for But they usually did so knowing what the comparable sales in the neighborhood had been.”
LOL! A buyer with lots of equity moves down to Socal and gets hooked with a fake multiple bidders by Realtors.
This “buyer had bid more asking” has been around for so long folks.
Realtors were and still using fake multiple tricks to get buyers to overbid. Fake appraisals only come after to seal the deal and make it offical. How often have you heard realtors say “Well that what the Buyer is willing to pay!”….Some creative exotic loans make the deal go througth.
(1) Fake Multiple Bidders
(2) Fake Apprasials
(3) Fake Loan Disclosure
Is it against the law to do fake multiple bidders, or is this a industry trick that the law allows?
you must be kidding to even ask !
dumb and very greedy foolish.
more “it’s not spreading news
“HD said Monday it will consider shedding its division serving contractors, homebuilders and other business customers.
Apparently, the Ummel’s don’t have any problem with how much they received for their home in San Rafael. I wonder how fair they were to the buyers of their previous home?
Correct me if I am wrong, but in May 2005, weren’t buyers routinely bidding more than listed prices? Everyone was bidding with the expectation that their purchases would be worth 10% more a few months later. I’ll bet that even if these particular buyers knew of the recent sales, nothing would have changed.
Flashback to 2005:
Buyers: “We’ll buy it for your $1.175 mil. asking price.”
Seller: “No, but I’ll take $1.2 mil.”
Buyers (To RE agent): “Hmmm… what are the comps?”
RE Agent: “A similar property sold for a little less than $1.1 mil. a few months ago.”
Buyers: “But properties around here are appreciating by, like, 20% per year, right?”
RE Agent: “Yes, that’s correct.” [A true statement]
Buyers: “OK, we’d better jump on this before the price goes even higher. We’ll take it for $1.2 mil.”
These buyers are simply bitter because their home is worth less than what they paid, thanks to the deflating bubble.
If their home was now worth $1.5 mil, I seriously doubt that they would be protesting that they paid $150,000 too much.
Your flashback is probably spot on.
Has anyone in the San Diego area heard the new loan adds on AM 1000
They are advertising a loan that is $20 per 100k that is fixed for ten years.
Need credit score of 640 or more and 30% equity in home.
They also add that it is still possible for your home to appreciate more than enough to counter the growth of the loan.
This is not a joke.
I heard that sh!t.
YES!!! I commented on this last week here and no one responded. I’ve heard them here in San Diego. WTF!!!!! How can that even be remotely possible?!?!?! It’s obviously neg am, but damn come on. When I heard that ad while driving I thought I was going to have aneurism.
I figured you all would think I was making it up. Glad someone else heard it too.
i am wondering, since they are trolling for people with at least 30% equity, and 640 or better credit, which is not good. Might they really be trying to hook up with people in trouble and then offer to buy them out under market?
I have seen the rate sheets before. This is a .25% Interest Only Negative Ammortization loan. It doesnt get any worse than this
updates are up:
http://madisonhousingbubble.blogspot.com/
Let me get this straight, they make an offer on a house, the seller counter offers with a price HIGHER than the original, and they pay that? How does someone that dumb have that much money? I’m going to park outside their driveway with sunglasses, a monkey, and a tin cup. The seller of that house is laughing all the way to the bank. He probably drives by the ReMax office and laughs…..
About 2 years ago I looked at a house in Maryland, listed at $169000, which was a bargain for the area. Right now there’s nothing listed for under about 230 here. It had its problems, like several large dogs that had just torn up the inside. We weren’t allowed to look inside on of the bathrooms because one of those dogs was locked up in there. He didn’t sound too friendly.
I was considering putting an offer in anyway, figuring I could fix it up and have a decent place to live at a price I wasn’t going to get otherwise in that area, when the realtor told me they already had a few offers, and the seller’s plan was to list it low and see how far above asking people would bid.
I walked away. I don’t like games like that.
LOL, I do go to open houses and realtors keep saying “we expect the home to move fast with multiple offers”… LOL Its 4 months now and still FOR SALE is seen on several I drive by weekly. WTF !
Unless he is contracted explicitely as a buyers agent - it doesn’t look like a promising lawsuit
“Working with a realtor” in normal parlance means you are going to get screwed.
THAT was some counter-offer
Meet the price and the seller jacks the price up further
“‘Even though it’s always ‘buyer beware,’ you think that the Realtor is looking out for the client’s best interest,’ Vern Ummel said. ‘You have to do your due diligence, but you can only work with the information you have. And we weren’t given the right information.’”
Note to Vern: Part of doing your due dilligence is figuring out what data and information you NEED but DON’T HAVE and then ACQUIRING it. Anyone who thinks a realtor is looking out for anyone’s best interest than their own, should be declared mentally incompetent.
I say again…you would have to have a heart of stone not to laugh at these fools.
I’ve nosed around on the Marin County web site and have found info on the Hummels dating back to 1996. They seem to have sold their house in August 2005 to a John Mancini. There are document numbers for these transactions. Anyone know how to glean additional info from county records?
BayQT~
Just ran across this little gem:
Confessions of a Real Estate Agent
http://tinyurl.com/2exlel
Excerpt:
Trust is Vital
On the flip side, if a seller is uncomfortable with his realtor, he should seek out a new one. Sara says, “You are working towards a common goal; the relationship shouldn’t feel conflicting. When a seller is combative and ignores my advice, he should choose a realtor that makes him feel more confident. If we’re not on the same side with trust, and he doesn’t understand that we both want the best outcome, it becomes a problem.”
The rest of the article is even better.
BayQT~
Don’t tell me that realtors have been fiduciary toward the sellers either during the great housing boom of 2000-2006 . The realtors were undercutting the sellers and double-escrowing property at a higher value in total conflict of interest during the boom .
Realtors are suppose to get the sellers the highest value the market will bear . I know of realtors that show sellers outdated comps ,etc. just to get a quick underpriced sale .
Has anybody thought about the fact that realtors in California fill out contracts on behalf of buyers and sellers and advise as if they were lawyers? Sure,the escrow officer usually cleans up the big mess alot of realtors usually make ,but still .
My point is that in prior lending cycles the lenders would keep the realtors in check by the lenders rules that generally protected the borrower . That check and balance system went out the window with sub-prime lending and hit the mark appraisals .
I would like to know how buyers during the recent housing boom could know that sub-prime lenders didn’t care if the appraisals were
correct or not . I grant you that buyers were greedy/scared and wanted to get in on the appreciation ,but I think buyers in general were expecting a accurate appraisal from the lender/appraiser .
My lender on this house I bought questioned why the property was priced so low ,(weird ).
Wiz-
I don’t know what part of California you’re in but what you just described is a surefire why of earning a 20 year vacation with Bubba the Butt Slayer. Are you kidding me?? A double escrow!! I couldn’t imagine any experienced agent with half a brain taking that kind of chance in the current environment. Pure suicide.
Most of the cases I’m talking about took place a year to 2 1/2 years ago . That sort of transaction I spoke about would not make sense in a down market .
My point is that during the mania years the REIC got away with all sorts of cr-p without it being noticed because the market was so hot .
By the way mrincomestream ,do you still think that the sub-prime market as we have know it during the mania will be alive and kicking 6 months from now ?
Also mrincomestream ,how about hat jerk realtor that posted yesterday on this very blog about his cash-back deals . Realtors have and continue to violated the rules in the interest of making money and they are so stupid they openly advertise it .
Yea, but the problem Wiz is that a lot of these Realtors haven’t taken the time to educate themselves about their responsibilities and the laws and that guy who advertised here was a perfect example of it.