Bob Casagrand’s March 2006 Real Estate Report

[sdrealtor]

Sorry folks but I’m on vacation.
Equalizer, Without getting into too much detail I could give your CPA a run for his money on tax issues as well as your financial planner, handyman, pta president or chamber of commerce president. The points you raise are great and probably some of the major reasons my clients use me. While they are great bonuses to my clients, giving tax advice or construction issue (though I often do with a disclaimer) is really best left to personal tax advisors and general contractors.

[lendingbubblecontinues]

I agree that a real estate agent does, in many cases, do a lot of work. But…

Does a real estate agent do TEN TIMES the work when he sells a million dollar house, instead of a hundred-thousand dollar house? Absolutely not, right? Then, why should the commission be $60,000 on a million dollar house, versus $6,000 on a hundred-thousand dollar house (at 6% commission)?? The envelope please….

It shouldn’t! And it won’t for much longer…think of how many thousands of shares of stock you can trade now for $19.95. Now think back to ten years ago…how much did it cost back then? A HUGE difference. What did the stock-broker do back then that warranted such a large payday? Truth is, there is absolutely no difference between what they do today and what they did in the good old days. Good real estate agents will need to learn to survive on $30-40K per year income, in my opinion.

[Farls]

Lendingbubble,
You’re right. The commissions on very high priced homes are too high. In some areas (Not really San Diego though…yet) agents stagger their commission based on the price of the home. The higher the sales price the lower the commission percentage.

Good Realtors will always make way more than $30K-$40K…(If you were good at your profession and only made $30,00-$40,000 wouldn’t you quit and do something else?) Really good realtors will always make several hundred thousand dollars per year…even with the competition from the discounters. A slowdown in the market and increased competition from discounters will have the largest effect on the “fringe” agents that aren’t making a great living anyway…

Farls

[highpacific]

I for one feel the same as nin_sis. Renting is better than buyin right now. I currently rent in Penasquitos, $2000 for a 2400 sqft 4 bed house. I feel quite comfortable in it. Landscaping is included so I don’t have to do much. Garage door opener broke just last month. Cost me $0 to fix it(the one time you are glad you have a landlord).
Using a fairly sofisticated Excel spreadsheet to track my exact situations cost of buying vs. renting. I would like to buy but it doesn’t make sense for my situation yet. I would have to pretty much stop saving money in my retirement and savings accounts in order to meet the payment. Basically we would be on a razor edge budget.
As a rentor I am socking away $2000+ per month in savings and feel more financially secure. I can qualify for the $525k mortgage + $75k down( houses seem to be around $625k where I am at). But bottom line is the house will be the same, neighborhood will be the same. I see no benefit to buying yet. It adds up to more risk, less lifestyle, and no savings for me.

[Anonymous]

Intersting website. Thanks powayseller for the invite. Nothing like asking a lamb into the den. And that lamb following.
JJ, do you really think a buyer/sellers agent is so worried about a couple extra $100 bucks or so that he/she would lie about a comp report and lose a potential client?
Bottom line… Banks don’t care what you, your neighbor or Realtors think a home is worth. If you don’t believe the comps, hire a Appraiser and save yourself some time and $$ by not having your mispriced home stagnate on the market.
My opinion, I wouldn’t buy a fix and flip in this market, but with rising rents, I don’t think investing is all bad. But I do believe that the family that buys a home now that they want to live in for 7 to 10 years will be happy with the investment they made at the end of that period. And I think the renter who believes every word the Union Fibune prints will be posting for years to come “If I had only bought in 2003, 2006, 2008, etc…
P.S. My favorite post is from the couple that makes $100K+ a year and can’t afford more than a $400K condo. Interesting lifestyle.

[Author]

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