[Doofrat]

JP,

A lot of people think the housing market has flattened out. If it was true that it has flattened out (I don’t think we’re close to the bottom for a few years at least), then it’d be a good time to buy since it can only go up. People hear that prices have dropped and that the market has flattened out and they think they can get a good deal.

They haven’t really heard about the number of foreclosures, they just heard a blurb about it on the news, but they haven’t looked at Realtytrac and seen the insane number of foreclosures mapped out.
They don’t have any idea that the tightening of credit means fewer sales and lower home prices.
They haven’t seen the Credit Suisse ARM reset schedule.
They haven’t read the Professor’s Bubble Primer.

They probably just talked to a Realtor who told them that prices have flattened out and that it’s a good time to buy (which happened to my wife yesterday in talking to a Realtor friend).

[Doofrat]

Oh man, come on, don’t burst my bubble, I’m sure if there are any other expenses outside of my calculations like insurance or stuff, I can just write it off or something.

Seriously, I know people who have done this, so it must be pretty common. Without being too specific, they buy a place without really knowing the true cost or the future expenses and risks and end up with an “investment” that would require all the stars to line up in perfect unison to possibly break even. Why would they do this? Because they expect future price gains.

I know my math makes no sense above, I was just demonstrating the way people actually figure these things out.

[Doofrat]

Oh man, come on, don’t burst my bubble, I’m sure if there are any other expenses outside of my calculations like insurance or stuff, I can just write it off or something.

Seriously, I know people who have done this, so it must be pretty common. Without being too specific, they buy a place without really knowing the true cost or the future expenses and risks and end up with an “investment” that would require all the stars to line up in perfect unison to possibly break even. Why would they do this? Because they expect future price gains.

I know my math makes no sense above, I was just demonstrating the way people actually figure these things out.

[Doofrat]

Oh man, come on, don’t burst my bubble, I’m sure if there are any other expenses outside of my calculations like insurance or stuff, I can just write it off or something.

Seriously, I know people who have done this, so it must be pretty common. Without being too specific, they buy a place without really knowing the true cost or the future expenses and risks and end up with an “investment” that would require all the stars to line up in perfect unison to possibly break even. Why would they do this? Because they expect future price gains.

I know my math makes no sense above, I was just demonstrating the way people actually figure these things out.

[Doofrat]

Oh man, come on, don’t burst my bubble, I’m sure if there are any other expenses outside of my calculations like insurance or stuff, I can just write it off or something.

Seriously, I know people who have done this, so it must be pretty common. Without being too specific, they buy a place without really knowing the true cost or the future expenses and risks and end up with an “investment” that would require all the stars to line up in perfect unison to possibly break even. Why would they do this? Because they expect future price gains.

I know my math makes no sense above, I was just demonstrating the way people actually figure these things out.

[Doofrat]

Oh man, come on, don’t burst my bubble, I’m sure if there are any other expenses outside of my calculations like insurance or stuff, I can just write it off or something.

Seriously, I know people who have done this, so it must be pretty common. Without being too specific, they buy a place without really knowing the true cost or the future expenses and risks and end up with an “investment” that would require all the stars to line up in perfect unison to possibly break even. Why would they do this? Because they expect future price gains.

I know my math makes no sense above, I was just demonstrating the way people actually figure these things out.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[Doofrat]

If you have a range, it increases the chance that somebody will see it if they are searching for something in that range.
If you list it for 899,000 and somebody is looking for something for 799,000, they will not see your house in the search unless you use a range. (That’s what I was told here)

All the listings should just say: “It’s a free market, therefore, seller will take whatever a buyer is willing to pay if he wishes to sell the house.”

[Doofrat]

If you have a range, it increases the chance that somebody will see it if they are searching for something in that range.
If you list it for 899,000 and somebody is looking for something for 799,000, they will not see your house in the search unless you use a range. (That’s what I was told here)

All the listings should just say: “It’s a free market, therefore, seller will take whatever a buyer is willing to pay if he wishes to sell the house.”

[Doofrat]

If you have a range, it increases the chance that somebody will see it if they are searching for something in that range.
If you list it for 899,000 and somebody is looking for something for 799,000, they will not see your house in the search unless you use a range. (That’s what I was told here)

All the listings should just say: “It’s a free market, therefore, seller will take whatever a buyer is willing to pay if he wishes to sell the house.”

[Doofrat]

If you have a range, it increases the chance that somebody will see it if they are searching for something in that range.
If you list it for 899,000 and somebody is looking for something for 799,000, they will not see your house in the search unless you use a range. (That’s what I was told here)

All the listings should just say: “It’s a free market, therefore, seller will take whatever a buyer is willing to pay if he wishes to sell the house.”

[Author]

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