Rich is the man:

[seniormoment]

I read Rich’s articles published in the SanDiegoVoice looking for guidance of the Downtown condo market, his writings are so good so I hunt for more, here I am, landed to this forum.

I am so amazed after reading Bugs, SDRealtor, Powayseller’s notes day in and day out, they are so knowledgeable and so humble to share their interest in the open, but the most amazing thing is the back and forth argument incurred from time to time because truth can only be firmed after debating.

Most respect should go to Rich, he stands in the middle as he should be.

I was driven away by a downtown Blog owner who actually deletes opinions that he does not think fit!!! so you can only see 1 way opinion almost, so I lost my interest totally, too bad, I was planning to acquire his service to show me condos 🙂

So, the good, the bad and the ugly are very important
ingredients to a blog, they attract all kind of readers, not just the bulls or the bears but all.

SD is a knowledgeable realtor, his way to express himself may not be liked by someone but he speaks through his mind, you have to respect him for that, after all, it is a free country, he entitles his opinion and his way of expression.

Powayseller is a very knowledgeable particupant but she should not act like a traffic cop in many issues, we have to live and let it live, after all,
it is just a blog, the SD housing market is not going to be affected by our opinion in any way, so we should all just talk…talk…talk…

Ok, let’s start AGAIN, shall we?

[sdrealtor]

Amen to that! I speak from my heart and if it occassionally offends someone it’s just the heat of the battle. I’d bet dollars to donuts PS and I would enjoy each others company if we sat down to chat about family and community as we both share alot of the values.
I won’t stop posting because I beleive I add value that you cant get anywhere else. While PS is very well studied and strongly opinionated the information she brings is someone elses. If you want to hear other opinions all you need to do is Google something like “housing bubble”, “Real estates values” “Home Prices” and you can find all you want to read. I try to bring what is going on in the trenches. Beleive me when I say it, I do not have a fun job.

I have spent the last few nights at clients dinner tables reviewing market data and getting price reductions. My client s are all fine upstanding people that anyone would love to have as a neighbor, truly sincere people with good values. They have tons of equity and are committed to selling at whatever the market is. Now imagine that you have to sit across the table from your best friend and pour over market data. They listen intently, think deeply about what they have heard and then ask the ultimate question…..”What should we do?” Then you look them in the eye and say…”I think we need to lower the price $50,000 and hopefully that will be enough”….They look at you with the disappointment in their eyes of someone who just gave up the hope of an additional $50,000 in their pockets but trust and belief in you. They follow your advice and after some brief conversation you get in your car and drive home hoping it will be enough. On the way you think of the conversation they are having and personally feel their pain. You walk in your door, kiss your wife and then go to your computer to check email and the MLS. One more house just came on the market around the corner and another reduced their price $30,000. You say a little prayer for your friends and go to bed……………

[ocrenter]

…but that friend purchased it at $300,000 and now is wrestling with whether to sell at $750,000 or $800,000. It pains me to see their disappointment and angst that they can only get $450,000 of tax free profit instead of $500,000 for a house they lived in for 5 years.

[sdrealtor]

You greatly underestiamte what they paid and overestimate the gains by at least double and fail to take into account transaction costs. More so you miss the point. They feel fortunate to have made anything on their homes, are not greedy and have the incomes to make that money back. These arent people running around in H2’s or MBZ’s. These are hard working people dring 10 year old cars paid off that live within their means. They watched other homes sell for alot more. Now they are looking for a reasonable price, with reasonable terms so they can get on with their lives. They have hopes just like everyone else. It’s no fun to have to crush them.

[Anonymous]

SDR

Please sum up if you do not mind, what you think will occur overall in this mkt during the next 2 years. It seems as though you are living through some softness with your listings, but yet are still doing well.

Most brokers are not even willing to admit any of those types of things, so kudos to you for being honest.

[Bugs]

May I assume you felt the same amount of concern when you were telling buyers they’d have to come up with another $50k to purchase as the market was on it’s way up? ‘Cause that’s the deal – if a seller is “losing” the $50k it’s because the buyer isn’t paying it and vice-versa.

If you don’t like giving people bad news about their values then you’d really hate being an appraiser – we do it on a regular basis. Even when times are good about 30% of all appraisals I perform come in lower than the property owner’s opinion. When times are bad that ratio goes up.

Right now I’m finishing off an appraisal on a property that’s listed at $1.9mil and my opinion of value will probably come in at $1.2mil or so. Trust me when I tell you this property owner is going to be very unhappy and my client probably won’t be making this loan. The fact that this property owner is a professional realty broker will likely add to their frustration.

[ocrenter]

but such senarios do exist. maybe not to that extend with your friend. The point is the seller should be happy they build up equity for a nice sized profit so quickly. They should be estatic! Instead, you are praying for them? What is wrong with that picture???

When we sold our condo last year we knew we were possibly leaving some money on the table for getting out sooner then others. But you know what? $100,000 for 2 years ain’t so bad. Now all the same exact condo’s are trying to sell for $20,000 more than we sold, but now there’s 10 condo selling, and all of them are languishing on the MLS. And nobody wants to lower their price. Why is it that we are happy with $100,000 and the sellers now are sad and their realtors praying for them for not being able to sell for $120,000??? Just lower the price down and get that $100,000! Hey, even $80,000 ain’t so bad.

[sdrealtor]

I agree with you Bugs and yes I felt great concern for buyer clients. Last year was very tough for me to represent buyers and most I worked with I kept on the sidelines. The few I sold bought around 50K below the comps so they are still in good shape for what they bought.

I agree that you have to bring alot of bad news to people but here’s the big difference. You email the report to the lender and word gets passed onto the buyer. I deliver the news face to face in people homes.

[sdrealtor]

I guess what I left out was what i praying for. I’m not praying for them to get an extra $50,000 in their bank a/c’s. I’m praying that it will be over for them. We reduce the price to make it the best priced home in the area and don’t know if that will be enough. Sure they could reduce another $50,000 and offers might come pouring in. Would you do that or would you want fair market value for your property? The problem is that we dont know what FMV is right now in this transition period and its very stressful finding out.

What I find funny is that the general public’s consensus is that everyone who bought a couple years ago and is now selling has a $500,000 gain. Personally, I bought extremely well in 1999 in a neighborhood that has appreciated far above the norm. After factoring in everything I put into my home in improvements, I could sell and net about $300,000. Don’t get me wrong, thats a HUGE amount but not $500K in 3 years. The truth is I dont really think about it much because my home is my home not a financial instrument. I have no plans to move in the next 20 years. Some day I hope its worth something but I really plan on giving it to one of my kids some day.

[Bugs]

That’s true. Face-to-face is a different situation, just as the relationship with the property owner is different. We assert a lack of bias and are not (supposedly) part of the transaction, whereas you guys are advocates for your clients and directly benefit from the transaction. We have different roles in the process and I daresay different ways of defining the value. We use different measures for professional performance. So yeah, I’d completely agree that there are some big differences.

[sdrealtor]

As usual right on target Bugs. Unfortunately I’ve seen quite a few appraisals that seem to lack bias and participation in the existence of a transaction. I’ve never heard of it happening but have you ever heard of lenders coming after appraisers for fraudelent appraisals (i.e.hitting the number to keep the business coming in).

[Bugs]

Absolutely. The role of the appraiser is supposed to be that of an outside observer. We are required to certify to that impartiality in every single appraisal report we sign. The very worst thing an appraiser can do is to join either one side or the other. I wish I could say that it doesn’t happen very often but I’d get laughed off the island for saying something stupid like that, and rightfully so.

Lenders have several options for dealing with fraudulent appraisals. They can sue in civil court, they can file administrative complaints with the state licensing agency, they can complain to the FBI. Any of those remedies can put an appraiser out of business. One of the byproducts of licensing appraisers is that of all the co-conspirators in a mortgage fraud case, it is virtually guaranteed that the appraiser will get just as heavy a penalty as the people who initiated and profited from the schemes. Every week some appraiser ends up going to prison for committing fraud, and the irony is that an appraiser’s “profit” in these cases is always limited to the measly appraisal fee – they never get a big piece of the action; so crooked appraisers commit their crimes for cheap.

Our bitter reality is that there are a lot of appraisers who, in an attempt to keep the work coming in, will lie on appraisal reports in order to enable their client to do what they want. It is these appraisers who demean themselves and us all by betraying the fiduciary position we are supposed to uphold. It is these appraisers who represent the single greatest threat to our occupation as well as to the safety and security of the lenders and other users of appraisals who rely on them to make informed decisions.

You’ll NEVER catch me sticking up for a crooked appraiser. Matter of fact, if anyone has a legitimate complaint to make against an appraiser – one that they have proof for – I’ll be happy to assist them in filling out the forms and putting the complaint together.

[sdrealtor]

Amen! Accountability is a good thing and often lacking.

[Anonymous]

Those sellers are not in foreclosure. Please, I cannot feel sorry for them at all! Nothing to pray for. They doing O.K. Instead pray for me that they lower their prices for ME.

Hey any info on that ‘pending’ question? A pending twice the size of monthly sales would indicate a huge rebound of spring. Does that mean prices are going up again? Any information is greatly appreciated.

[Author]

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