Realtors Are Telling Sellers To Pony Up The Cash
WBOC 16 reports from Maryland. “A housing slump in Ocean City is keeping many condominiums empty. There are currently 1,683 units on the market, while construction companies are building at least 500 new units. The buying slow-down is also impacting single-family homes, with 166 on sale in West Ocean City and 120 in Ocean City.”
“Realtor Bud Church has been working in the business for more than 30 years. He said housing trends are typically unstable, but usually a depression comes with some warning. ‘The market stopped quicker than I’ve ever seen it stop. There have been slow downs before but it was a gradual curve but this time we went over the edge,’ Church said.”
“According to Church, there was a housing boom three or four years ago. ‘People called speculators would come into town, buy a unit, and sell it within a month or two,’ he said. ‘They would make a profit of $25,000-$30,000, but that quick turn around is just not here anymore.’”
The Capital from Maryland. “Anne Arundel County home prices edged up slightly last month, after falling along with the number of homes sold during the first half of the year. In many cases, as their homes sit unsold for months, sellers are lowering their prices in an attempt to entice buyers who are holding out for a better deal.”
“January was the only month this year in which sales were up. This isn’t surprising, considering the oversupply of inventory, market watchers said.”
“Frank Nothaft, chief economist at Freddie Mac, said the slower housing market has ‘certainly had a drag effect’ on the economy,. ‘We’ve taken a hard hit here in the Baltimore-Washington-Annapolis area,’ Mr. Nothaft said.”
“Mr. Nothaft said he expects home values in the higher-priced neighborhoods to decline this year. ‘The name of the game is it’s a buyer’s market,’ he said. ‘If you’re a seller, you’re probably going to be more willing to negotiate on terms of the contract.’”
“Dr. Joe Cater, president of Market-Economics in Annapolis, said a good chunk of homes for sale are coming from the upper tier of the market - $500,000 or more. But he said he expects sellers will bring prices down. ‘We’re starting to see signs that we’ve reached the bottom,’ Dr. Cater said. ‘What’s going on is some price adjustments.’”
“Bill Lambros, an agent in Annapolis, said sellers should hold their ground and not reduce prices any further. He said a waterfront home in Edgewater that was listed for $950,000 and now sits on the market for $775,000. Even with the lower price, the home hasn’t sold.”
“‘I think sellers are shooting themselves in the foot,’ Mr. Lambros said.”
The Daily Progress from Virginia. “In the Charlottesville area’s crowded housing market, sellers this summer are looking for a way to stand out. Want a free high-definition television with your new condo? The Woodlands of Charlottesville has a 42-inch set waiting for each new buyer.”
“Want reduced closing costs on a house? Realtors across the area are telling sellers to pony up the cash.” “‘Interest rates are low, there’s high inventory and sellers are more negotiable than they were a few years ago,’ said Realtor Ray Caddell.”
“Dave Phillips, CEO of the Charlottesville Area Association of Realtors, said there are 3,400 properties for sale in the area. The inventory represents a 12- to 13-month supply, Phillips said.”
“The last few years have been a booming seller’s market in the Charlottesville area, as low interest rates, a strong economy and a string of awards naming the city one of America’s best places to live all contributed to a buying frenzy.”
“Builders, meanwhile, were planning or constructing hundreds of homes. Combined with the general housing market slowdown, the market suddenly seemed to have more houses than it could handle.”
“While free trips or a new TV might seem like good incentives, Caddell says cash is the best option. Caddell said that today’s buyers know that the supposed freebies are often being factored into the price some other way.”
“‘TVs are a gimmick,’ Caddell said. ‘If you’re buying a $350,000 house, how much does an $850 TV matter?’”
“Lori Chapman, the president of the Realtors’ association, said another attractive option is offering buyers a home warranty. ‘Anything to make it easier for buyers to get in,’ Chapman said.”
The Times Dispatch from Viginia. “Foreclosures nationwide, and in Virginia — rose dramatically last month from a year ago, according to RealtyTrac.” Virginia (households had) one foreclosure for every 1,678 households. A year ago, few people here faced foreclosure: One foreclosure was filed for every 12,549 households.”
“‘We noticed that spike in Virginia,’ said Daren Blomquist, spokesman for RealtyTrac. ‘Investors are saying it was like a switch was turned off,’ he said. ‘The course reversed very quickly. We are seeing a dramatic shift in quite a few areas.’”
“Steve Baugher, executive director of the Virginia Association of Mortgage Brokers, said he is monitoring the sharp rise in foreclosures. ‘It is a little concerning,’ Baugher said. ‘It will take a year to see how this market shakes out.’”
“Baugher said the subprime mortgage market, such as interest-only loans and some adjustable rate loans, may have contributed to the problem. But it isn’t solely to blame. ‘A lot of people got into houses on a shoe string,’ he said. ‘They overextended.’”
The Washington Business Journal. “There’s nothing hot about the housing market in D.C. this summer. Sales of single-family homes fell in all local jurisdictions in June, and median prices tumbled everywhere except Montgomery County, according to data compiled by Metropolitan Regional Information Systems.”
“Economists and other market observers don’t expect a rebound in residential sales until 2008 at the earliest.”
WMDT 47 from Delaware. “More discouraging news about the housing bubble burst, it’s hitting the Eastern Shore hard. The state of Delaware suffered a record number of foreclosures in the last year. Experts don’t think things will get better in the near future.”
“You finally bought your dream home, but now you can’t afford it. A variable or deferred interest rate lured you in. Now, you’re paying more than you bargained for. In Delaware, it’s happening in record numbers.”
“Realtor Bruce Wright says, ‘Many times you can find a larger home and be able to get in them with an adjustable rate. You can get a much larger home for less money.’”
The Philadelphia Inquirer from Pennsylvania. “Mortgage foreclosures grew 87 percent nationwide in June, and by 8.2 percent in the Philadelphia area, according to a report.”
“But a wide disparity in the number of defaults in South Jersey compared with defaults in Southeastern Pennsylvania left regional economists questioning the data’s validity.”
“The Pennsylvania counties, including Philadelphia, had a 30 percent decline, while the total for Camden, Burlington and Gloucester Counties more than doubled, according to RealtyTrac.”
“‘There is no question that there will be a pickup in the number of foreclosures going forward, especially when the rates [for] subprime loans taken out in 2006 begin adjusting,’ said Frank Nothaft, chief economist of Freddie Mac.”
“Many subprime borrowers are trying to refinance out of their loans, but tighter lending standards put into place by federal regulators in the last six months are working against them.”
“‘Six months ago, most of my [refinancings] were the standard kind, with homeowners trying to cash in equity or a lower fixed rate,’ said Brett Warren, president of Buyer’s Home Mortgage Inc., of Abington.”
“‘Today, most people seeking to refinance are subprime borrowers, and we can’t place their loans because of those tightened standards,’ Warren said.”
“‘Abusive lending with teaser rates and exorbitant fees, which can give borrowers negative equity from the get-go, are clearly at play,’ said Lawrence Yun, senior economist for the National Association of Realtors. ‘Delinquencies and foreclosures are further anticipated to rise as more loans are scheduled to reset.’”
“‘Foreclosures are a lagging variable,’ he said. ‘Even if the real estate market begins booming tomorrow, the foreclosure rate will continue to rise.’”
why would anyone use a realwhore ?
“Bill Lambros, an agent in Annapolis, said sellers should hold their ground and not reduce prices any further. He said a waterfront home in Edgewater that was listed for $950,000 and now sits on the market for $775,000. Even with the lower price, the home hasn’t sold.”
How else would you have access to all of that knowledge?
What billy lacks in common sense he makes up for in courage.
I agree. But my question is (since I’ve never purchased a house before):
What do the realtors actually do that you can’t do without them. Other than taking you around and showing you houses (which I can do myself), do they offer some service that is imperative to the home-buying process that would be too difficult for buyers to go it alone? From what I understand, they don’t even do any of the financial paperwork preparation as the lending agency takes care of that. So, what do they do? (This is a serious question by the way.)
If you didn’t know a particular area, they might be able to clue you in….then again, they might lie to you in order to get the sale.
I didn’t use one finding my first and second home purchase. Didn’t use one to sell my first home either. For everything that they MIGHT bring to the table to help someone with less or no experience, they are also as likely to corrupt the process because of their conflicts of interest with both buyers and sellers.
Bottom line? Its the largest sum you ever spend and borrow. Does it make sense to enter ANY major business proposition without doing a lot of education on the subject yourself?
You don’t need a broker but you shouldn’t avoid them either. I worked with one for a while and she was great, gave the pros and cons, didn’t push, helpful with some perspectives here and there. Then again, she didn’t make any money of me either, did she?
“Does it make sense to enter ANY major business proposition without doing a lot of education on the subject yourself?”
Absolutely not. And we’ve had many years sitting back and renting learning and watching the market and industry. We’re not gurus by any means, but I think we’ll do ok on our own.
The only thing we are looking at using a realtor for is showing us around areas we may not have known existed. From there (but they don’t know this) we will take it on our own.
it’s sorta like buying a car .. you can shop the Dealers showrooms and used car lots.. they are licensed, have a wide selection, can set up financing and offer lots of other conveniences.
Or, if you think you know what you’re doing, go it alone through the Want Ads, Craig’s list or Ebay..
however, a home is a huge purchase and this shouldn’t be taken lightly.. multiply the intricacies and risks of purchasing a car a hundredfold.
So, let me get this straight… A realtor will help you choose the right house for you, and he will make sure that it is free of problems? If I buy a car, even at a dealership, i take it to a mechanic to inspect for problems. Seems to me that unless the realtor is willing to stand behind the purchase of the house with a cell phone # and a hammer and nails in order to fix anything and everything that can go wrong in a house, then he is useless. As i have yet to find a realtor that is willing to give me his cell phone # so that I can call him when the first termite shows his face, I have yet to encounter the first realtor that is worth 1% of the purchase price, no matter 6%.
That is a fallacy, in that you need them in order to avoid problems. If you are to buy a house, and need someone on your side get a top notch house inspector and pay him the 500 or 1000 that it costs to have the house inspected, and NEVER trust someone on comission!
“..A realtor will help you choose the right house for you, and he will make sure that it is free of problems?..”
I never said anything of the sort.
If you think you know what you’re doing, go it alone.
If you think an Agent will babysit you and wipe your butt, you do not know what you’re doing , and you need an Agent and a good RE Attorney.
Wow. Hit a raw nerve there? You are comparing buying a car from a dealer to buying direct from craigslist are you not? A dealer generally will give you a warranty (even though it probably will not hold any water but that is a whole other discussion) while a realtor gives you????? Their professional advice? Intricacies? I guess that if I really need hand holding I would hire an ATTORNEY at a fixed hourly rate, and still be cheaper than paying the ridiculous 6% for a pair of HS Dropouts.
I can get the information that I need from the Internet, have a route of houses that I want to see, and then contact the sellers directly, once their listing expired with the useless RE agent that failed to sell their house. Hire a competent Home inspector and RE attorney and you are 10’s of thousands of dollars ahead of the game.
Negotiate for me? Yeah right…. Last 5 years has gone something like this:
RE Agent: You know that there are 3 other offers on this house, and you need to offer at least 10% more than asking, otherwise you will lose this opportunity…
Yeah, like that is a good negotiation strategy.
raw nerve? nah.. i got no dog in this fight.
I said it’s sorta like buying a car since, like a car dealer, agents offer conveniences and provide services. Of course, the client pays for it all. Whether it’s worth it or not depends on a lot of things.
Nominee for most hilarious quote of the day!
“Bill Lambros, an agent in Annapolis, said sellers should hold their ground and not reduce prices any further. He said a waterfront home in Edgewater that was listed for $950,000 and now sits on the market for $775,000. Even with the lower price, the home hasn’t sold.”
“‘I think sellers are shooting themselves in the foot,’ Mr. Lambros said.”
I’ve heard that Maryland schools were bad but aren’t these clowns suppose to have a HS diploma before getting their realt-whores license?
I guess his view is that if you close your eyes and pretend the Mack truck isn’t about to run you over, it won’t.
nope , anyone can be a real-whore
it’s beauticians that have to hit the books
I’ve heard that Maryland schools were bad but aren’t these clowns suppose to have a HS diploma before getting their realt-whores license?
Yet another realtor with an hilarious grasp on economics. You couldn’t make up stuff like this!
He’s probably holding properties he is trying to flip….
Many Realtors and sellers seem to think the buyers are just being stubborn and or greedy.
Nothing could be farther from the truth.
The buyers on the side lines have “good money management skills”. They are not willing to close on a house only to have it go into foreclosure and ruin their credit, because they can’t afford it.
When home prices return to 2.5 times their income they will buy and not before.
The foolish idea that buyers should lose money to bail out the sellers who bought a home that is extremely over priced is just nuts. If the sellers lose money that is not the buyers problem.
No one suggested in 2000 when the over priced tech stocks were tanking that people should jump in a buy them to rescue those who were losing their shirts. Sellers can decide either to stand their ground on their price and die in the place or set a price that people can afford.
Amen, BJ! That should the rallying cry of buyers. Sellers and realtors keep wringing their hands, wondering why buyers won’t buy. The stupid buyers can’t get financed, and the smart buyers are waiting on the sidelines for the price to equal 2.5 gross annual income.
Perhaps we prospective buyers need a t-shirt that says, “Attention Realtors, Homebuilders and Home Sellers: IT’S THE PRICE, STUPID!”
My feeling exactly. Buyers should stand THEIR ground and demand lower prices AND we should be rewarded for not exacerbating the bubble by the fed with a nice rebate on our taxes. A box that indicates I didn’t take out a loan a couldn’t afford. Wouldn’t that be a novel idea?
Buyers should of backed off in 2002 instead of going for the bogus PR of the industry like ,”You can’t afford not to buy “.
Instead of backing off ,the buyers went full speed ahead with crazy loans they couldn’t even afford ,and the RE industry either sold homes based on fear or greed .
What defines market vlaue is what willing and able buyers can afford ,in a arms length transaction . You can’t say that a market made up of speculators and unqualified buyers is a normal market . It was a fraudulent market ,made up of bogus uqualified short term demand .
As far as I’m concerned , the People of the United States could have a class action lawsuit against Wall Street and all their agents of fraud in the RE industry for creating a fake market based on fraudulent loans and Investment advertising lies . Doesn’t let greedy borrowers off the hook either ,because in most cases they knew they submitted a fraudulent loan package and they were buying more than they could afford .
You can tell the levels of desperation, based upon the swag they “give” away…
Here in the Central Valley, the ante has been upped to a “free” in ground swimming pool, with each home purchase.
“In the Charlottesville area’s crowded housing market, sellers this summer are looking for a way to stand out. Want a free high-definition television with your new condo? The Woodlands of Charlottesville has a 42-inch set waiting for each new buyer.”
Oooo…a free inground pool? Does that house come with a free roof too? What a deal!
On existing home ads, I often see such things as ceiling fans listed in the list of features. Wow, ceiling fans! How about the wallpaper?
Remember the one posted here a few months ago that listed the backsplash on the kitchen tile?
In Central Florida, ceiling Fans only come in ” Luxury Homes”. You can’t believe the cheapa** fixtures in 175k homes.
I saw one recently with “dual shower-head in master bathroom”. I’ll try and find the MLS. It was a $950k house, as far as I remember….
MLS #: 076048050
Price: $999,000 - $1,049,000
Remarks: PANORAMIC OCEAN VIEW! HALF BLOCK TO SUNSET CLIFFS! CURB APPEAL! 3-5 CAR GARAGE AT ALLEY! LARGE USEABLE BACK YARD! DUAL MASTER BDRM SUITE! IN-DOOR LAUNDRY! GLEAMING HARDWOOD FLRS! MASTERBDRM W/WALK-IN CLOSET & DOUBLE HEADED SHOWER! ADD LIVING SQUARE FOOTAGE BY EXPANDING INTO EXISTING GARAGE!
I like the all-capital letters and the exclamation marks too.
And it has “IN-DOOR LAUNDRY!” No going down to the river with a washboard, no sir!
I have no idea how the can claim “PANORAMIC OCEAN VIEW!”, must be if you’re standing on the roof.
Here in the Central Valley, the ante has been upped to a “free” in ground swimming pool, with each home purchase.
Brilliant marketing strategy.
It’s been my experience, that pools can be a distinct sales liability to a property.
Many rarely return cost to the overall valuation-never mind the added upkeep and liability expense for insurance.
And if a legit appraiser is used, he’ll clip the contract price for the concession.
Talk about “shooting yourself in the foot”.
‘Attorneys for the plaintiffs said Metropolitan Money Store Corp. of Lanham, the main defendant, is behind a scheme that defrauded as many as 400 people in Maryland, Virginia and the District.’
‘According to the lawsuit, here is how the alleged scheme worked: Metropolitan arranged for the sale of the home to an investor known as a ’straw buyer’ who would borrow as much as possible against its value and then pocket the money.’
A scenario that appears to have been rampant throughout the country.
Anatomy of a Housing Bubble — Prince William County Virginia.
Currently on the market as a foreclosure:
7923 MEADOW CT Manassas, 20109 $203,500
Beds: 3 | Baths: 2 | Sq. Ft.: 1,332 | Lot Size: 1,559 Sq. Ft.
Year Built: 1975 | Listing Date: 07/12/07
Prior Sales:
$290,000 9/20/2005 CASASOLA NORMA
$240,000 2/25/2005 CASTELAN SILVESTRE
$145,800 3/16/2004 RATTERREE MELBA
$96,000 12/18/2001 MANDLEY DOMINIQUE
So where does one get this type of information. Do you have to be an insider or is there a website? Thanks.
I’ve provided all the Northern Virginia county assessment links way down in the 2nd column at my website for quick clicking — click on my name “Arwen” for that.
The Prince William website is here.
they voted for the 40 cents per hundred transfer (grantor) tax so housing went down on that………..
A great site for NoVa renters like me, btw. Thanks for taking the time to keep it updated. It is a fabulous site that I have sent the URL to other NoVa friends to view.
PB, Arlington, Va. 22206
zillow.com has some
A house bought for $96,000 6 years ago would be valued at ~ $130,000 today if the appreciation rate were 5%. (Is 5% about the norm historically for real estate?) Is it not possible that a correction will bring prices this far back in line?…
No, normal appreciation is much lower, on average, and in some places was almost non-existent before the housing scam. I had friends who sold their homes for exactly what they paid for them five and ten years after buying, even though they invested fortunes remodeling and upgrading. Back in the ’60s, ’70s, and early ’80s, most people thought of houses as places to live, not as investments. “This Old House” and the Yuppies who took it to heart started the new trend, but manic speculators concocted the mess we’re in now.
Also, in the old days, houses weren’t built of cardboard and Styrofoam by unskilled labor; the junk built in the past ten years or so should have dramatically depreciated, not dramatically appreciated, in value.
It has ‘dramatically depreciated’, only the price has risen. A lousy house is still a loust house, and poorly set flashings and cracked concrete wil need repair. The bozos that pay premium money for a structure in need of 5% maintainance cost a year are losing big money.
I should have said “depreciated in price.” Thanks.
Marion County Florida had a negative 4.5% appreciation Rate ( for Homes)for 10 years after the last Boom. 4.5% per yr for 10 years. That Boom was nothing compared to this. NOTE: this was Homes . Land and Homes are always Different. These are some land examples……….
Example land ………….. 1987 14k per acre
2002 3k per acre
2006 45k per acre
2007 25k per acre
2008 ?
Please note: Land prices here are Crazy and asking prices run the Gambit from 10k acre to 150k ” Dreamer” asking prices. The prices I have quoted are avg. asking prices in “same developments”
I have watched over the last 20 Years where people actually bought a lot and built a Home.
But in response to Your question, most RE in ” Normal Market” averages 2 or 3% per year appreciation . Just about equal to wage
increases. Social Security and (Core) Inflation.
Normal appreciation - measured over the really long term, and nationwide - is somewhere between 4-5% - just at or just over the inflation rate (depending on how you measure it).
This is deceptive because people not only maintain but upgrade their houses - landscaping, better roofing, better plumbing, more efficient windows, nicer fixtures, built-in bookcases, etc.
This is another one of those well-known “facts” that will go by the board before this grinding downturn is over. Houses/housing units naturally depreciate, like everything else.
In fact, a very large percentage of houses eventually rot, burn down, or otherwise go to zero value, all in the course of a few generations.
This is deceptive, because you have some metros pulling up the Nationwide average. For example, pick several mid-sized cities in the midwest or south (skipping rustbelt blackholes like Detroit), and you’ll see 3% appreciation. Look at DC metro, and you’ll see 5%.
Even then, I have a hunch that places like DC Metro (and NYC) are skewed by the suburbs. For example, my hunch (no data to back this up) is that suburbs rose more dramatically over the long (I mean very long) term than closer in places. For example, 50 years ago, Fairfax was in the country. Now, it’s DC (as far as I care). My guess is that the same thing happened with Long Island and New Jersey: once rural boondocks, now part of a large metro area. My hunch is that closer in areas rose more slowly over the same period because they already had the metro premium.
Hope that makes sense.
are those the buyers names on that list???
weez,
Yes. I regret leaving the buyers’ names on there, though. I usually try to take them off for postings like this. But it’s public knowledge at the county website anyway.
4.43 million houses for sale nationwide. That has to be twice as much as a year ago. But no worries subprime is contained!
“‘TVs are a gimmick,’ Caddell said. ‘If you’re buying a $350,000 house, how much does an $850 TV matter?’”
Actually, financed over 30 years, it’s $2400 TV …
I doubt many “average” people pick up on this fact.
I’ve been to a number of sales centers where they talk about throwing in a TV. The conversation usually goes like this:
Them: For a limited time we are including this nice TV with purchase
Me: I already have a TV
Them: But this is a high-definition TV
Me: So is mine
Them: It’s always great to have two
Me: I don’t need two TVs in my living room
Them: You could put it in your bedroom, or your bathroom
Me: Seriously?
Them: Of course
Me: Could I skip the TV and just get a reduction on the price?
Them: You are welcome to offer anything you wish on the place, but we really don’t do that.
Guess I’m not their type of buyer. Didn’t know they were picky.
This may just be a regional thing, but here in Tampa the T.V. is central to staging the houses here for sale in the $300,000 range.
The living room motif consists of one recliner facing an ironing board with a T.V. on top, simple, yet functional.
It really makes perfect sense. If you have no cash/money and lousy credit and a sorry income, the furniture salesmen, the car salesman, the electronics store guys etc. etc are going to check you out and not lend to you. BUT, the mortgage broker WILL give you a $350,000 loan without checking you out, so it would behoove you to go ahead and grab all those incentives that you can.
On the other hand if the person went to a rent to own center a TV that costs $399.00 at Walmart has a list price of $773.00 at the rent-to-own center. The weekly payments of 16.99 a week for 84 weeks, puts the total price of the T.V. with interest at $1,427.16.
Since the prevailing mentality is not how much something costs, but the payment and the leveraging of one’s paycheck, one would want to put the T.V. on the house loan and spend the $16.99 a week on a recliner from the rent-to own center, so as to have a place to sit wilst watching real estate infomercials.
Oh, I forgot one little nugget of advice I learned from a real estate pro. When you take a tour of a home like the one above you can be easily fooled by the “staging”. One way to avoid this pitfall is to check all the closets and IF you do they do not have an iron to go with that ironing board, then maybe, just maybe, they are a distressed seller and do NOT offer full price right away.
Priceless insights.
“Want reduced closing costs on a house? Realtors across the area are telling sellers to pony up the cash.”
Here’s something I haven’t heard for a while but that might come back — seller financing. Perhaps, if no one in their 20s is savings, sellers will have to provide the second lien loan in order to get their houses sold.
How different from an inflated price with cash back, eh?
A house down the street from me has a “seller financing available” sign along with the for sale sign.
I talked to some colleagues who bought their house with seller financing. But that was when mortgage rates were at 17%!
Right, that’s the era I remember it from, but that was, what, 25 years ago? I just remembered it. Everything old is new again.
I sold my place 4 years ago and took back a note. Unfortunately, the buyers have a rather large balloon payment due in less than 3 years. I may get the place back if they can’t get a loan to buy me out. But the monthly check has been nice.
In rural areas contract-for-deeds are still pretty common. There are a lot of individuals I’d trust more than a bank that just wants to sell my mortgage to a bunch of bag-holders.
Seller financing is probably the worst tactic possible; if your prospective buyer can’t get qualified by existing banks or mortgage brokers, you don’t want to take on that credit risk yourself.
Not always. My neighbors across the street sold to a newlywed couple who couldn’t get financing but refused to ask their folks for help. They worked like beavers and never took a vacation, paying the note off years early. They’ve worked their butts off for the past twenty years and are a real credit to our neighborhood.
On the other hand, I used to work for a family that had its own business. Half the family also practiced social services fraud. One of the sons regularly worked the contract for deed, don’t pay, eventually evicted scam. As you know, in much of the country it can takes months to get an eviction, so he made out real well doing this. He also collected foodstamps and heating bill assistance. When you own your own business, under-reporting your income is the easiest scam in the world to pull off.
Owner financing can make great sense for sellers, especially if (1) you get a big downpayment, (2) you don’t mind taking your house back, and (3) you live in a state where foreclosing is not too expensive or difficult. That’s the credit risk part.
The interest rate risk may be just as great. Great (for the seller/mortgage holder)if rates go down, but not so great if rates go up - in fact, potentially disastrous in late 70s-style inflation.
Here in Florida owner Financing is making a big Comeback. That’s always when You can tell the bust is Starting to take hold. Buyers know they can’t get their Inflated Prices with the ” Regular Mortgage Crowd” so they try and see if they can get their price by offering owner Financing or lease to own.
HA!
Finally some press about Ocean City. All the local papers are filled with realturd ads so there is no reporting of the numbers. Only those realturds who are featured authors of “special to the …..” write saying how inventory is decreasing, now is the time to buy, blah blah blah. Oh and the home in Edgewater for 995K dropped to 775K is a modular. I watched them move 4 houses on this property 3 or 4 years ago. All 4 sat for a year or more, an auction brought 2 or 3 sales. The house has been sitting vacant for 3 or 4 years now, weeds and brush have overgrown the landscape. I drive past it 2X a day.
Here are Ocean City stats courtesy of Coastal Assoc. of Realturds;
http://coastalassociationofrealtors.com/statistics/default.htm
Did anyone notice the monstrosity of a house in the Delaware link? What is going through the minds of people who sign for these gargantuan behemoths?
………….actually the home in edgewater I am refering to is in a neighborhood called Edgewater Estates, not Edgewater MD.
Went to Rehobeth last weekend. Central Delaware always amazes me — I guess that are has been populated in some sense fot about 300 years, but is still mainly just a lot of farmland, punctuated by fading little towns along the way. As you near the coast, though — density surges (and, if you visit once or twice a year — you always notice new developments or commercial along the way as you near the coast).
Tiny Dewey Beach — adjacent to Rehobeth — is thinking about relaxing height standards that make it charming in the first place. Fortunately, I don’t think it’s going to go through.
http://www.washingtonpost.com/wp-dyn/content/article/2007/07/11/AR2007071102278.html
Maybe the housing slump will discourage further development, and Dewey Beach will get a reprieve from being condo-fied.
For another six or seven years, anyway.
Bill Lambros, an agent in Annapolis, said sellers should hold their ground and not reduce prices any further. He said a waterfront home in Edgewater that was listed for $950,000 and now sits on the market for $775,000. Even with the lower price, the home hasn’t sold.”
“‘I think sellers are shooting themselves in the foot,’ Mr. Lambros said.”
This guy shoot shoot himself! What a dork!
should shoot himself!
So many agents have no CLUE. I went to an open house (listed at 699K). The agent told me the owner had to put his foot down to get it that low for a “quick sale” (they are empty nesters who own three McMansions and grow tired of the “upkeep”). The agent wanted him to sell in the 700’s. He said boastingly “we’ve got contracts coming in”.
That was three months ago. It’s still sitting there (Northern VA).
These Agents in Montgomery County are such liars. If you even show a little interest they always say that they have a lot of interest in the property and have offers coming in soon. I guess they are brainwashed and then the property sits for a long time. They cannot help themselves.
But Montgomery County is different. Better schools, more jobs, higher income…we are immune to the housing slump.
LOL. Yes, I live in MC.
Maybe we (I live in MC too, but not even looking yet) should go to the open houses, listen to the “lots of offers coming in” speech and just turn around and leave after saying “Oh, well, I’ll just go then. I’m not interested in getting involved in a bidding war.”
“So many agents have no CLUE.”
So are the sellors. I went to a open house of FSBO , bought in 2004 (vienna metro), and the owner was asking at 2005 level. Of course it’s not selling. I can see his ad on craigslist every week. He seems to refuse to lower his price. I guess sellors would rather be forclosed than losing 100K.
I wonder which is worse. Selling short and taking a 1099 or foreclosing and having your credit rating smashed (which doesn’t seem to bother the credit card companies or car dealerships). Seems to me, foreclosing maybe the way to go to avoid actually having to pay for your debts.
What’s your average 2005/2006 homebuyer’s credit worth? It seems like generally the folks here have excellent credit (I’d guess most of us could get signature loans at the bottom of the next credit cycle) and we place a high value on that asset. But if you’re a sub-prime or low prime home buyer, is having good credit worth losing $10k, $25k, $50k etc? I don’t think it is to many of them.
So few of them have any choice I doubt it matters…they are going down. I think the question is how many people currently with near-perfect credit will be willing to take a FICO-ectomy to avoid a 6 figure loss?
Don’t assume that credit won’t tighten *everywhere*. Pretty soon a lot of these people won’t qualify to finance a toaster.
I think the reasoning is (which I recently heard from a friend trying to sell because of a job move): It only takes that ONE person. In other words, he is waiting for that one eager idiot to show up and put in an offer. This friend has had about a dozen interested lookers, but almost all of them have to sell their home first to be able to buy…. He’s not going to drop the price, because all it takes is that ONE special person who wants to buy in a falling market.
Friends in Rockville have been lowering their price about every two weeks. Now down about 15% from first wishing price, or 20% below what they feel they could have gotten last year. Got one offer, but it was contingent on sale of buyer’s house, so they rejected it. They still have a lot of equity, but now won’t have to worry about capital gains!
It gets worse (for them). They bought in Florida in Spring 2006, and judging by current listings in that neighborhood, they’re down about 25 to 30 percent on that house.
Amazing how many people were oblivious to the bubble. I include myself in that category until I stumbled onto this blog.
Question for you, as I see this come up a lot. You said the offer they received had a home-sale contingency, so they rejected it.
But can’t they accept the offer but keep the house listed and accept other offers that do no have such a contingency? That happens around here a bit. A seller can ‘accept the contract’, but is free to continue trying to sell the house until such time as the buyer sells their existing house. Some of these are formal, written agreements, some are verbal ‘acceptances’
I know RE practices vary from city to city, and very few people buy around here without selling their house first, but I was wondering if the practice of “accepting an offer but still free to market the house” is common elsewhere? In fact, the house I bought was in such a situation. I ‘took’ the house out from someone else with a lower price but no home-sale contingency.
Yes they can. But (per my wife the former realtor) it discourages other potential buyers, who feel that the first buyer will just remove the contingency. So the other potential buyers say, “Why bother?”
Try http://indorgs.virginia.edu/portico/assessors.html. It has links to various county assessment sites around the U.S., which contain such information.
“So where does one get this type of information. Do you have to be an insider or is there a website? Thanks.”
THANKS !!!
I have been looking for a site with all of the assessors on one site
Thanks!!!
[laonlooker] “So where does one get this type of information. Do you have to be an insider or is there a website? Thanks.”
Try http://indorgs.virginia.edu/portico/assessors.html. It contains links to various counties and regions across the U.S. that contain such information.
I can just imagine what’s going through foot-shot’s head:
“If they keep lowering the price, it will depress prices everywhere! They get less money and I get less commission! What a bunch of idiots”
Unfortunately, it appears he didn’t take ECON-101. Maybe that’s why he’s a REALTOR(TM)(R)(LLC)
I believe the commission would still be pretty sweet at that price. Maybe he has all of his wealth in Home Equity and is a sour puss cause market changed.
Any reason for the HB rally today other than short covering? Any positive news for that sector?
Yes, there is a rumor that Buffett is going to buy a stake in HOV.
I wonder why the fraud reports are going to start rolling in for Philadelphia. Or maybe — Philadelphia is different!
philly ain’t different for sure. i live here and i see the foreclosure lists almost every day and trust me, they’re growing exponentially. as to the realtor’s stance on pricing, why would we expect it to be any different? what they don’t yet understand is half is better than zero. until they get that, homes will just continue to sit. a house that sold for 96K in 1999 ain’t no bargain at 170K just because some damn fool paid 210K for it 2 years ago.
“‘Today, most people seeking to refinance are subprime borrowers, and we can’t place their loans because of those tightened standards,’
I’m guessing this is why there are now six end units for sale in my community, in addition to numerous nested units. I’m renting in a starter TH development. The presence of so many unsold end units tells me that the buyers in the under $230k market can’t get financing.
‘Attorneys for the plaintiffs said Metropolitan Money Store Corp. of Lanham, the main defendant, is behind a scheme that defrauded as many as 400 people in Maryland, Virginia and the District.’
Sounds as if Metropolitan had 400 Money Trees…
“Any reason for the HB rally today other than short covering? Any positive news for that sector?”
the official/unofficial reason is: Buffet interested in HOV.
The HB were due for a technical bounce after weeks of going down.
The Annapolis realtor’s comment sounds familiar … I’ve got a good friend in the military who is leaving Annapolis and selling his house. I believe it’s been on the market for a couple of months now — with one looker. His realtor convinced him to take it off the market and relist at a HIGHER price. I about died when my friend told me about that. I did my best to convince him that this made absolutely no sense whatsoever to no avail. He’s somehow convinced that the paver-stone patio they put in a year ago somehow made the house worth more over the last couple of weeks.
Yet another pot smoker allowing himself to be courted by an amateur posing as a “professional”. I thought the military did drug testing?
“You finally bought your dream home, but now you can’t afford it”
This psycobabble used to piss me off. If it were truly your ‘dream’ house you’d take a second job to afford it. However, I have now come to realize that ‘dream house’ really is literally that, a figment of their imagination.
Well, dreams can be made of many things, incuding nightmares.
test
excellent Economist article: ‘Another Pounding’
http://tinyurl.com/28lzre
This article mentions the Lender Implode-o-Meter, which now stands at 98. Methinks the century mark will be passed before month’s end.
I moved just outside DC in June for a new job after graduating. I am waiting and saving, with a goal to buy in about two years.
I feel bad for my friends that bought this past March, a condo near logan circle for $435K. The previuos owner bought it in ‘91 for around $220K. By May there were (and still are) 5 for sale signs and one rent sign on their block (same building). I think the rental might be taken, I had called and it was $1,700 per month.
They think they got a deal becasue the current units (1/1, 900 sqft) are listed at slightly more than what they paid for their 1/2, 900 sqft. condo.
The place they bought had also come down from $500 after being on the market for months. I wodner how much the units on the maket now will drop?
Although new to the area, I’m really surprised in regards to the vast number of for sale and rent signs.
I apologize for the many, many spelling errors
They certainly didn’t get a deal: if rentals are $1700/mo, then prices really shouldn’t be higher than $240k to be cash-flow positive (assuming 20 down with 30-yr fixed). Your friends got screwed.
I was told by the RE agent handling the rental that it was a steal at that price given the size and location.
I would have preferred to move more into the district, but being right out of college I figured I can wait. I do like making my rent check out for $975 a month (utilities included) although frankly even that feels way too high for what I get.
there’s a really interesting new building right near new convention center — maybe on 11th street. probably waaay overpriced, but worth looking at just to see what it looks like inside. you ought to go look at it next time you’re in logan visiting your pals.
A lot of condo inventory coming on line in DC area. Will be interesting to see how well it is absorbed. Condo prices were awfully flat from mid 80’s to mid 90’s in DC area — I was amazed at some friends who bought and sold over that time frame, and made almost nothing out of it. I suspect the same will happen again for quite a while.