Letter to a broker...

User Forum Topic
Submitted by GoUSC on December 4, 2007 - 7:05pm

Today I received the fifth letter in the mail from some broker telling me now is a good time to buy. Here rationale was:

1. Homes in Bay Park are selling in the $400k's! You need to jump on that!
2. Lending is still active and you can easily get a 100% loan!
3. My favorite choice quote was "You have nothing to loose and plenty to gain!"

Here is my response:

Ms. Swanson,

Received your letter in the mail today. Just thought I would take a little time to respond to it. In your letter you mention that 91 homes sold in the 92117 zip code and the majority were in the $400,000 range to $300,000 range and that this alone is a good justification to buy a house now. What you failed to mention is that per the Case-Shiller index homes under $475k have fallen 7.2% from their peak; homes $475-$676k have fallen 12.3%, and homes over $676k have fallen 16.4% and there is no signs of stopping. Foreclosures continue to increase, inventory continues to increase and sales continue to fall. Basic laws of supply & demand show where that leads to. Mr. Paulson's latest plan won't work either because the majority of subprime people out there couldn't afford their homes the minute they walk into it.

In addition to that, you advocate 100% financing. So let me get this straight, you want me to jump into a depreciating housing market with a 100% loan so that I can be underwater on day 1. Or, if I put some money into the deal, I can start losing equity day 1. You say I have "nothing to lose", but it looks to me like I have everything to lose.

I am a renter here in Bay Park and am sitting on the sidelines waiting to buy my first house. But I am going to wait and in about a year or two I'll be able to buy something real nice for a price I am comfortable with.

Perhaps instead of selling homes right now, you should take all those great commissions you made over the past five years and take your family on a vacation. We are just getting started in the down cycle of real estate. The early 90's took over 5 years to correct the mess. We are about a year into this one and I see another 2-3 to go.

Sincerely,

‹ Abbott to cut 700 jobs in Temecula Why not walk away? ›
You should've added this
Submitted by BuyerWillEPB on December 4, 2007 - 7:37pm.

You should've added this part...

"Unfortunately our household income is only $110K / year. That means we can only qualify for a home that is $330,000 or less. When you have a decent selection of 3-4Br/2Ba homes in the $280K to $330K range, please send me another letter. Otherwise, you enjoy your vacation, and we'll talk in about 3-5 years from now.

Buh-bye...

Ooooh that's good! I'll
Submitted by GoUSC on December 4, 2007 - 7:55pm.

Ooooh that's good! I'll remember that if she responds (unlikely of course).

That was funny.
Submitted by patientlywaiting on December 4, 2007 - 9:25pm.

That was funny.

Swanson Swan Song... yer
Submitted by VoZangre on December 4, 2007 - 9:35pm.

Swanson Swan Song...

yer dreamy letter sent me immediately into a swoon, Ms Swanson...

by dreamy i mean to imply its disconnectedness from fundamnetal realities...

I can see you now floating regally over a sea of NOD's...

methinks thou wert once an ugly duckling and may be destined for yet another metamorphosis...

Actually even in a normal
Submitted by unbiasedobserver on December 5, 2007 - 9:57am.

Actually even in a normal slowly-appreciating market you are underwater from day 1 considering the 6% realtor fee you would need to pony up to sell. Hence the age-old rule of thumb not to buy unless you plan to be there 5-7 years. This is something most buyers of today seem to have completely forgotten about.

"Hence the age-old rule of
Submitted by Russell on December 5, 2007 - 10:39am.

"Hence the age-old rule of thumb not to buy unless you plan to be there 5-7 years. "

Some posters have made a good point that this should be thrown out the window and not just because of our current situation.

Radelow. What you did sounds like a lot of fun.
I was looking for bar stools on craig's list and put an offer on some nice ones. The person raised the price because I bid too fast. Turns out to be realtor. I told her that since I actually meant to bid less than I really did and that we should compromise and do the deal at my original bid. She left them there at the higher price and never sold them. Eventually she dropped the price to just $25 over what I offered. I bet she never sold them.There was a busted fsbo sign laying in the driveway in the photo of the chairs.My guess is that she didn't even want to pay a cooperating broker to sell her house and couldn't sell it either. Ironic isn't it :).

My guess is that she didn't
Submitted by Ash Housewares on December 5, 2007 - 2:09pm.

My guess is that she didn't even want to pay a cooperating broker to sell her house and couldn't sell it either

Rustico can you clarify this? I was under the impression that Realtors HAVE TO be under a broker to do transactions, they can't do them on their own.

Did you already send the
Submitted by FormerSanDiegan on December 5, 2007 - 2:16pm.

Did you already send the letter.

I think you have the % declines and the price ranges reversed. ...

What you failed to mention is that per the Case-Shiller index homes under $475k have fallen 7.2% from their peak; homes $475-$676k have fallen 12.3%, and homes over $676k have fallen 16.4% and there is no signs of stopping.

It's the homes under 475K have declined 16.4%.

$%#&($&#@)( you're right.
Submitted by GoUSC on December 5, 2007 - 4:36pm.

$%#&($&#@)( you're right. Oh well doesn't really hurt my case either way. She probably doesn't even understand the letter anyway.