The Housing Bubble

$80k is about all a used house is worth.

What town?

Double the rehab cost estimate.

Why?

Columbus OH

We are refusing to work with a “buyer’s agent”, no matter how hard these useless realtors try to sell themselves.

At the very first property we visited, we contacted the seller’s agent, Blondie. When we schedule a second look-over, Blondie shows up to the property with her boss. All of a sudden, her boss hands us a form to sign which he spins as “just a formality”.

As I’m sure you can guess, they want us to have a “dual agency” relationship. That form is actually an agreement to retain them, which we are sure as hell not doing. I tell Bossman that, and he tell me that it’s fine, because Blondie represents us and her boss represents the seller. I almost fell on the floor laughing. I’m sure Blondie’s going to work *real hard* at the bargaining table to get the lowest price for us with her boss on the other side of the deal.

I told him that that in any other industry, what he had just proposed would be a blatant violation of professional ethics. But I guess that doesn’t apply to realtors.

Before we hired our realtor, she told us two things she would not do:

1. She never is on the “buy side” for more than one family who is looking for a house in the same price range (she doesn’t want to be conflicted if she finds an off-market deal); and
2. She’ll never represent both sides of a transaction (she doesn’t go for dual agency). If we want to buy a house that she has listed, she’ll find us someone else to represent us.

I hired her on the spot. A realtor who understands conflicts of interest is rare.

Ultimately, she found us an off-market deal…no bidding process, just a negotiation between us and the seller.

BTW, I know it’s incredibly distasteful, but have you thought that the brokers are simply finding a buyer who will sign the “dual agency” form?

Have you submitted a written offer? At least in CA, it is illegal for the listing broker to NOT share written offers with the seller. Copy the Bank and finance company on your offer. Include any pre-approval letters from lenders for any mortgage you are getting…and, if you have it, a letter from your bank/banker noting your down payment capability.

^Says the guy who got suckered into paying a 300% premium for a depreciating asset.

Pendulum:: We are refusing to work with a “buyer’s agent”, no matter how hard these useless realtors try to sell themselves.

There’s no such thing as a buyer’s agent.

The “buyer’s agent” has the same incentive structure as the seller’s agent - they are both paid based on the purchase price so their interests are aligned.

They’re both commissioned salespeople whose pay is determined by the price of the house.

they have u by the B@lls. If the house is listed with an agent you need to learn how to kiss some serious BUTT. It can be a real political process.

“worthless REALTOR”

Worthless realtors. Worthless worthless realtors. Is there anything worth less than a realtor(besides a house)?

You can put an ethics complaint against the realtor.

I know, I know…

Do you wanna buy the house or not?

If so, then regardless of how objectionable you find it, you will likely need to work with a realtor. Your best bet is to do the dual agency thing with the listing agent’s office. Otherwise, the agent is going to shine you on until they find someone who will, and the agent gets 2 commissions for her broker rather than just one.

If the property is a decent deal then there are likely other interested parties. You’re either gonna do what it takes to get the house or not.

In others words, agree to be fleeced.

Wrong answer.

ibbots sounds like a REALTWHORE.

While it’s not ethical, in this case it’s probably better to hold your nose and do the dual agency thing. WTH, the house is $40K. Even if they got both sides of the 6% commission, after overhead and taxes they are lucky to take home a thou among them. It’s not worth arguing over.

Save your thrifty instincts for the rehab. And yeah, it’s going to AT LEAST double your estimate. This ain’t a one-room cabin. Four beds, lots of plumbing, multizone heating, the works.

lol. Donk the contactor.

Just visited with a smart guy I admire, manager in fact, who got tired of the endless years of fence-sitting. He and the bird found a huge place, and they even signed an escalation clause to prevent being outbid! No chit!! I didn’t say a word since this was a client visit. This is Pasco, WA, where homes are a fraction of California prices. Guess we’ll have to wait for buyer’s remorse; maybe never? Dunno.

Unless you’re a contractor, this sounds like a classic money pit. Desperate to buy, see a big house oddly within the price range, just needs a “few updates.”

I knew a guy who tried to do a heavy renovation on a modest house. Had no idea what he was doing, other than he’d been told it was very lucrative. The project failed.

Now, I’ve seen professional contractors do this kind of thing and make a killing on the flip, but Joe Homeowner? Not so much.

http://www.imdb.com/title/tt0091541/

It really makes you wonder doesn’t it? Just put your platform/agenda out there. Why all the hemming and the hawing and the misdirection?

People with the facts on their side do not need to threaten dissent with death or prison. The record is just too clear no warming in 18+ years means that CAGW is a fraud:

http://wattsupwiththat.com/2015/04/07/another-call-to-arrest-climate-deniers/

heh, starts to make sense why they’re so eager for the kiddies from Central America to get here, so much so that now they want to fly them in on planes.

Creeps.

When Kissinger and Soros die, I just hopes someone sticks stakes through the hearts to keep it that way.

He’s only going to be 80 in November 2016. In AZ that’s a whippersnapper.

I think that someone made a remark here recently about retirement being a relatively recent phenomenon. His idea was that, for most of human history, people worked until they dropped dead. That poster thought that we would have to return to that state of affairs. I guess that Senator McCain is showing us all the future.

“Do you access to his medical records?”

His age combined with his past torture combined with the fact that he’s completely crazed should have done him in. But he must be getting those, uh, transfusions.

I just looked it up on Wikipedia and it turns out that the club has closed and the building was demolished. Maybe the LA Jews are moving to Tel Aviv after all.

Do you think we will see some more shady accounting gimmicks in the 1st qtr earnings numbers?

Do you think stock buybacks and one time charges will be enough to make it look like they turned a profit?

Fraud?

yes it is exactly a fraud imo.

Its like buying a house on a foundation of sand.

Buying any house at current prices is a financial death sentence Poet.

You can gig my project with your Cratering Truck. My commission is a dozen Krispy Kremes every morning.

I know your not working.

But lunch is a separate gig. Sorry Poet.

Edgewood, WA List Prices Crater 10% YoY As Sellers Slash

http://www.zillow.com/edgewood-wa/home-values/

The evidence surrounds us, just as it did for the dangers of tobacco back when the tobacco industry funded its own scientific doubt machine, providing shills and politicians with bullet-points of misleading information to try to obscure the overwhelming amount of evidence that tobacco was harmful.

In Glacier National Park only 25 out of 150 glaciers remain. That’s real world to me… at the rate the glaciers are receding they will soon have find a new name for the park.

Six Flags Atlantis

Crater National Park. The west needs snow melt. Now you’ve got it.

In Glacier National Park only 25 out of 150 glaciers remain. That’s real world to m

St. Mary’s glacier near Denver is melting away.

St Mary’s Glacier is not a glacier, it’s a semi-permanent snowfield

There are no real glaciers anywhere in Colorado, Rockstar

In Glacier National Park only 25 out of 150 glaciers remain. That’s real world to m

In a normal interglacial period the temperature peaks 2 degrees Celsius higher than we are now. So probably all the glaciers would be gone and it happened before modern man even existed. So how does you evidence show AGW?

Perhaps, but there’s also something to be said for “he who panics first, panics best.”

And in some markets, I think these big funds have the power to completely manipulate the market. You’re an azdude, look at Phoenix: Some of these funds hold a few 1000 homes and current sales rate has hovered at only around 5000/mo for quite a while right now. What do you think would happen if even one of these firms decided to dump everything all at once? Say they put a couple thousand units on the market and offered them at 5% below current market so that a reasonable fraction of the total sales were theirs?

They could probably move most of their units within 6 months or so and their sales alone would be enough to drop median prices a percent or two a month.

Now ask yourself, is the Phoenix market robust enough to handle a spike up in inventory and decline of say 5% in price over a few months? How are the other investment firms as well as regular homeowners who have been thinking about selling going to react?

In my estimation it would be enough to cause an all out selling panic. Everyone would would be trying to get out near the top and nobody would want to be the buyer who bought at the peak again.

Said fund could then wait it out while everyone else stumbles over themselves to sell and buy back again at a much lower price.

Admittedly, it would be ballsy move. If for no other reason than the potential public & political backlash if it came out that they “caused” the next real estate crash, but when it comes to making a quick buck, I imagine some of these firms may be willing to take the risk.

Isn’t Phoenix already falling by more than that?

RJK,

It would be ballsy, and incredibly stupid. In order to sell the home, the owner needs to kick out the tenant, clean it up, and list it. What that means is no cash flow, fix-up expenses, and operating costs (taxes, insurance, etc.) ongoing.

So, if they have debt on their portfolio (as they mostly do), they also have debt service to worry about.

If they are successful in crashing the market, they put at great risk their existing portfolio (their loan to value increases, they have no cash flow to service the debt, etc.).

If they are unsuccessful at crashing the market, then they exit at an OK price–because they NEED to sell, since they no longer have the cash flow to service the debt since they kicked out all the tenants.

In other words a successful “crash the market” campaign causes them pain. An unsuccessful “crash the market” campaign causes them to exit the industry.

Both are inconsistent with a group that is trying to expand their portfolio and grow a business.

How do you grow a business when your inventory is at record highs and demand at multi decade lows?

Hint: Start slashing.

Great but how does that work with an 83% vacancy rate?

You tell me. I’m not the one buying this RBS crap.

97% of climate scientists agree.

Link?

An Api number does not trump this, it supports both of my contentions:

http://news.yahoo.com/us-crude-oil-closes-2014-high-195437709.html

Update - just heard on WLS this moment that the porto potties have arrived to Cubs park - piss crisis over - Old Style beer sales will commence again.

Update to the update - No game tonight - seems that global warming has caused the game to be cancelled due to lots of rain and sub freezing wind chills. So much for increased Old Style beer sales.

I’m told pissing-in-place is SOP for the English football hooligans in the stadiums at their games. When you’re in the middle of a chanting, singing, bottle-hurling, roiling mob, it’s hard to take a bathroom break and make it back to your ’seat’.

And they don’t bother with cups, unless they can throw it at the opposing team when they’re done.