August 28, 2006 at 10:57 PM #7369waiting hawkParticipant
“If you like the home, but think it’s over priced, that’s fine, just write the offer for what you think it’s worth. The seller will do one of three things: 1) Accept it; 2) Reject it; 3) Counter it. You won’t know until you write it. And don’t worry about hurting their feelings. They want to sell their home. If it was a screaming deal to begin with, it would have sold already. It’s been sitting there because it’s overpriced (or has a transformer in the back yard…)”
“The key here is realistic sellers. There is a lot of truth to the saying that Buyers determine the selling price of a home, not the Sellers. Sellers can set an asking price, but if no one is willing to pay it, then it is just a dream.”August 28, 2006 at 11:19 PM #33837
Very well stated!August 28, 2006 at 11:19 PM #33838
Very well stated!August 28, 2006 at 11:24 PM #33840socalarmParticipant
interestingly, the line before that puts the quote in a slightly different context
“If you have been thinking about buying NOW is a great time. It really is a BUYER’s market. Interest rates are still attractive and there is plenty to choose from…”
tha might explain the infectious smileAugust 29, 2006 at 7:27 AM #33850ocrenterParticipant
but the follow up explains why he thinks it is a buyer’s market, ie, go ahead a low ball. you just never know.August 29, 2006 at 9:56 AM #33863JESParticipant
We need to ask ourselves why that house we want in, say, Carlsbad is even priced at $800,000 to begin with, and not $400,000 or less like it was in 2000. Pure speculation, plain and simple. Whether it was investors or even just families, the psychology of speculation and the expectation of appreciation drove 90% of that price increase, not fundamentals. All buyers should arm themselves with this mentality: I don’t care what the comps are, and I don’t care what you paid. My baseline is a little more than $400,000 for that house and I have all the time in the world. It’s a new round of roulette now and the minimun bet is my starting price, not the amount you let ride and lost.August 29, 2006 at 10:06 AM #33867
The MISINFORMATION AGE is truly alive and well. I am an established Real Estate and Mortgage Broker in San Diego, CA. When I read articles like this from some of my fellow peers I want to call them up and ask them how they sleep at night by convincing and misinforming their buyers about the state of this housing market in California.
It reminds me of the stock ANALYSTS (the equivelant of some of today's APPRAISER'S) of the late 90's who said Commerce One amonsgst other internet stocks (went as high as 300 something per share if not higher)had no limit to how high it would go, it was the HOLY GRAIL of internet stocks, has anyone looked at the ticker symbol lately? Hint: there isn't one. How about PPRO.
I am sure we could all put a long list together of these symbols branded in some of our minds, and license plates, possibly start a whole other blog, and everyone tell their stories about how their options were worth millions AT ONE TIME and ON PAPER which doesn't mean..you guessed it…anything.
At least with this asset you could sit in front of your computer via Etrade, fingers shaking, and push the button at any time and know what your loss is going to be that instant. You could sleep at night even though you had regrets and remorse…not so, with the not as LIQUID ASSET of Real Estate. Has anyone called up the proud owners who bought that stock after listening to this analyst on CNBC and falsely HOPED that the analyst was right and put THEIR trust in him? I wonder how they feel right now about it? Better yet, does the analyst care? I bet he exited the stock before it started it's slide into HELL (by the way, for all the fundamentalists this is translated GRAVE not an eternal abyss of damnation and punishment).
It reinforces the obvious fact that SOME people, especially prevelant in this industry, care more about making a commission than the people they have an ethical responsibility to educate and aid in making one of the BIGGEST decisions in their lives. Hopefully, these types of people will be filtered out during this statistically reinforced inevitable downturn.
How will these peers of mine feel when in a year one of their buyer's that has a wife and 3 kids lose their house and experience the emotionally devastating and humiliating reality of a foreclosure sale. Every time I work with a client I think about these things continually. The kids stressed and confused, the probable stress on the marriage relationship and their dreams down the tubes. You just don't bounce back from an event like this…you think you will be able to call these people and ask for a referral after their wonderful experience with your services?
I, as a professional Broker have a responsibility to look out for the best interest of my clients not only short term but LONG TERM and if that means I have to reduce my office space, cut back on niceties and sacrifice for a few years, so be it. But there is not one client of mine in which I will convince and try to take advantage of in buying ANY RESIDENTIAL real estate here until:
A) The FUNDAMENTALS come back into line (please see the graphs on the home page especially SD home prices vs. per capita income. "A picture is worth a thousand words or in this case thousands of dollars".
B) Situations come up with a listing where I can move my client or buyer into an opportunity where there is SUBSTANTIAL equity and not at today's APPRAISAL prices.
C) They have substantial reserves, this is liquid money in the bank, not 401K's and Pensions to be able to ENDURE any adverse situation that may come their way in the future.
In closing this thread, I want to address my fellow peers with a few thoughts to ponder:
1)We have a responsibility to EDUCATE our clients about purchasing Real Estate in today's market and the substantial risks at this moment,not hyping them up and manipulating them through self-interest statistics for a commission check.
2) A realtor's job is not just to find a house for someone. My 10 year old nephew can get on the MLS, check a few boxes and send listings to someone. IT IS TO BE HONEST WITH YOUR BUYER'S ABOUT THE RISKS OF THIS MARKET AND LET THEM ASSESS THE RISKS AND MAKE A DECISION.
By the way, if you do this, you will have happy and satisfied customers, plenty of referrals, and a long lasting and profitable real estate business. Because at the end of the day my friends it is about people and not money. Sincerely, ContramanAugust 29, 2006 at 5:48 PM #33903
Excellent post Contraman. I could not agree more and strive to live by that creed as well.August 29, 2006 at 8:13 PM #33908WileyParticipant
I respect your post but am a little curious…
I’m guessing you feel housing is overvalued??? If true how can you sell anything at all right now? How can you make a living.
Now taking the other side of the coin don’t you think if someone is in the market to buy they are going to with or without your advise. At least if you are their realtor then you can treat them fairly even if YOU feel the market is overvalued.
Just because you and I and most others here feel it is a bubble doesn’t make it so. I’ve been wrong about it for several years now so anyone taking my advice would have missed out on some nice gains.
Is it the responsibility of the realtor to be an expert in macroeconomics. How much responsibility lies with the buyers.
Not trying to be argumentative just playing devils advocate.August 29, 2006 at 8:13 PM #33909yogamomParticipant
Thank you so much for your comments. It is enlightening to hear a rational point of view from a real estate profesional!August 29, 2006 at 9:53 PM #33917bob007Participant
it is not the job of the realtor to educate the buyer on macro-economics, what the buyer can afford. They should not misrepresent anything.
Beyond that if the buyer is stupid they deserve what they get.August 29, 2006 at 11:07 PM #33926
You are correct in the fact that the housing market is overvalued in San Diego. By how much, this is what we are all taking guesses at right now and educated one's at that.
Concerning you being wrong about the bubble several years ago says to two things:
1) Even at 2003/2004 prices you knew by common sense that things were getting out of whack. How much more now?
2) Your timing was just a little off and it is always hard for anyone to time the market. I guess all you can do is sense the calm before the storm but we don't know when it is going to show up. It is here.
As you will note from my previous post, my business is also comprised of financing so that is my focus now. I have people come into my office and I educate them on the program they currently have, the positives and negatives of the program, and then help them make a decision from there in alignment with their goals they have set up themselves or with a planner.
If a client wants to list, I try to educate them on the state of the market and what is realistic at that time. Then, I list and market the property. My fudiciary responsibility is to the SELLER not the buyer.
Also, I work with alot of investors who are giving me the green light to pull the trigger on things out of state that CASH FLOW with very little down. Mainly in the midwest.
Hope this helps…thanks for offering to play the devil.:)
Sincerely, ContramanAugust 29, 2006 at 11:20 PM #33929
Wiley as a Realtor, first off I represent sellers and buyers. So your question is targetted for buyers correct? How can any Realtor in his right mind represent a buyer when the Realtor thinks that the market is in the tank and will continue to depreciate correct?
While none of us can fathom buying a house right now, there are buyers out there. If people are going to buy we can still help them out. I have a few buyers who are taking it very slow. We have submitted several low low lowball offers. They all know my feelings that the market will continue to depreciate but they are still moving forward. I give them my opinions, I show them the same data I look at, and those that work with me get good rebates. I also do NOT do any loans but whatever financing they use, I review thier loan, give my opinion, and make sure they understand what the payment will be now, and 5 years for now.
So in the end ALL the responsibility lies with the buyer. What is sad is that there are many agents out there who do not feel obligated to share their honest opinion about the market with all clients, specially the buyers.August 29, 2006 at 11:27 PM #33930
Very well put. I am glad to be meeting people like you through this site, fellow peers with the same ethics and attitude, and care for their clients.
If you ever have any questions about financing programs, let me know, I know them in my sleep. I study them more than the reps and UW's from the banks themselves.
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