[FutureSDguy]

nevermind

[FutureSDguy]

Good point. I don’t think anybody is doing a very good job of it these days.

[FutureSDguy]

Many buyers will believe them when they say “its never been a better time to buy.” They will see that the prices fell a bit, and it just might go back up and prices will be even more unaffordable. Banks will continue to give ARMs with zero down to help these buyers.

[FutureSDguy]

The NAR will both predict and point out anything that has to do with “higher prices.” Yesterday there was a thread where they say that the market “has bottomed.” I Resent Realtors(R) with a capital R, and I am disappointed that such a mass of uneducated buyers and sellers are complicit to their propaganda and price fixing by putting in a system that prevents the free market from operating.

Even people here who have a lot of economic insight drink the Realtor(R) kool-aid.

Having said that, the market *is* sticky on the way down. Cookie cutter houses with small lots are still way overpriced, and I’m not seeing anyone “make a move” by offering properties at prices what buyers can afford.

[FutureSDguy]

I agree. I just think it’s better to have that 3% ready for either the broker or the buyer. It’s a fixed overhead of the sale. If the buyer asks and receives, buyer feels like they’re getting a discount and is more likely to buy.

Also, earlier, poway is basically saying “sellers need brokers because they price their property too high otherwise.” I don’t buy that logic. Just go to the county, get comparable sales, and then price accordingly. If you want to be greedy, you can with or without a broker to assist you, but if you want to price smartly, you don’t need to be spending a big chunk of your profit margin on a broker to tell you what that price ought to be. It’s a waste of $$$!

[FutureSDguy]

If the seller needs to impress his cocktail party fellows, he can package the 3% deduction into the sales price and then rebate the buyer afterward. You can cook things any way you want. The impact on the seller and the buyer remains the same, just two less brokers walking away with a profit.

By the way, I appreciate reaing your thoughts on this thread and many other threads, powayseller!

[FutureSDguy]

“Did I mention that I am liberal agnostic/buddhist living in a conservative area (Murrieta) so that makes finding local friends even more of a challenge.”

I am quite conservative. As long as you treat others as human beings and respect differences in world view I don’t see why a conservative and a liberal can not enjoy each others company, friendship, and enrichening conversation. As long as you seek to find others to agree with you before you are willing to socialize with them, you put up a wall that prevents a bond from forming. Respect for other people’s opinions goes a long way–you can’t be as picky with people as you can with say, toilet paper made of recycleables or organic canned tomatoes. Sometimes when you finally respect a person from the inside out and you actually listen to their views, 180 apart from yours, your eyes open a bit more about the world around you.

[FutureSDguy]

Such a messed up system. I think the MLS with the buyer and seller commission figured in upfront is only there to protect the interests of the agents involved.

So homes typically have the 6% commission built into the price. A seller representing himself shaves 3% off the price to be more competitive. In negotiations the buyer can say “I want to represent myself, can you knock off another 3%,” to which I would say sure! (Because I would have been prepared to pay an agent anyway.)

Powayseller, the scenario in which I get to pocket that 3% and still sell at the same amount is the same scenario in which I increased the ask price by the same amount and gave the buyer the 3%. Either way, buyer pays the same, seller receives the same, hence the marketability stays the same (except for the fact that the buyer won’t know that’s built into the ask price until he asks the seller).

I don’t buy the part about realtors doing double the work. (They double the amount of paperwork on their own, actually.) Any seller has to prepare the same amount of prerequisite paperwork, and any buyer likewise. Whether someone chooses to hire an agent to do their respective part of the paperwork doesn’t affect the other side.

I’ve only done an FBSO where both buyer and seller were self-represented, not where one side is represented. Am I blowing smoke here or am I hearing FUD from the RE industry. (FUD = Fear Uncertainty Doubt).

Also note that the paperwork on the sale is pretty much the same no matter what the value of the house is. So sellers who don’t want to the paperwork can have it done for a flat fee. “Oh no, it can’t work that way.” Yeah it can, but until then there needs to be more education and less anti-competitive practices revolving around the MLS.

And if someone says “my gosh, you sure are a cheapskate.” Selling RE is hard partially because finding the fair price for a property is difficult. 1% movements matter, especially as the price of the house increases. Plus the seller has a fixed obligation to the bank, so any 1% increase the overhead of the sale comes directly out of the seller’s pocket.

Look at it another way 6% is a whole years worth of appreciation (in a normal market, at the risk of the seller) spent on what could be as few as 4-6 hours of agent time doing paperwork that is routine for them.

I know it’s a rant against the commission system. I do think buyers and sellers do need agents if they don’t want to do the work. But for those who want to be closer to the metal in the overhead costs, they’re excluded from the market, hence the title of this thread. Agents boycott FSBOs.

[FutureSDguy]

Actually, I don’t think realtors are worthless. I think clients need them to various extents. But I also think that buyers and sellers don’t know enough about the process of a RE transaction to accurately judge whether representation is really needed.

Buyers are protected through a sellers disclosure form. I would certainly demand one, if it isn’t already required by law. Both buyer and seller is protected by the purchase agreement which specifies the deposit, contingenices (i.e. inspections and previous house sale), extra items that go with the house, and of course the timeline towards closure. Escrow protect the money and the title transfer itself.

Things can go wrong along this course, but there’s risk in lots of transactions. In RE, billions of dollars are changing hands to mitigate a risk that doesn’t occur that often, especially when buyer and seller are acting in good faith–and much of the time I believe they are.

I bet a good portion of the risk seminar involves the risk of not getting a commission, or a client feeling that s/he is not being properly represented. I think the relationship between client and agent is just as complex as the RE transaction itself, so there’s a risk of a lawsuit in that alone.

My expr. with FSBO as a buyer was actually pleasant. We both sat down, verbally negotiated all the terms, and I drew up a purchase agreement with contingencies and a timeline. We helped each other through the process because we knew that most of what needed to be done was just stuff dealing with escrow, the title company, and the clerk’s office.

[FutureSDguy]

Still feeling roudy after some good friday night bar hopping? I think you over generalize by inferring that all bubble blobs are visited by disenchanted people. The population who post here are not all just waiting for the best time to buy (which would include me). They are also realtors who have an interest in knowing the pulse of the market, and recent sellers who did make a killing and are offering their experiences. The people who dominate in these forums are rather smart in the area of real estate economics–sour pussies they are not. I think you’re feeling insecure about someting and need to go on an attack. My guess is that you’re resenting the fact that buyers are not buying into your “real estate always goes up” mentality and you’re about to lose money, so it may be you who is the bitter one (1).

(2) You’re not being very coherent here. People make purchasing decisions based on what their needs and abilities at the time–no one can control interest rates, and in most cases you can’t time your decisions on it. You appear to argue that ARMs are a bad idea. Yes, most people say the same thing, especially in light of the fact that people foolishly gave up their 5 or 5.25 fixed loans for teaser rates that would reset in a rising interest rate market. But this forum is not populated by people commisserating on their ARM loans–in fact they’re probably more focused on either selling their homes or fixing their finances, not blogging.

(3) I am assuming you’re talking about down payment. Appreciation is relative to the purchase price, not the down payment. Other than PMI avoidance, you make a larger down payment so the bank charges you less interest, and that you have more cushion to keep yourself from going upside down on a loan.

(4) True, you can’t predict bottoms in advance, but you can know that you’ve already past it (with various degrees of certainty) and can still make decisions accordingly.

You seem to hold people who take financial risks in high esteem and look down on people who really work hard for the money and thus don’t have the disposable income to gamble with. Risky behavior in the stock market, on average, loses money.

In general, I think you’re stuck on the delusion of grandiousity in that “this market can do no harm” and “prices are high simply because they are.” I believe all markets have cycles. The fundamentals support this also: the population isn’t changing (except for immigrants from the south who aren’t participating much anyway), and incomes aren’t either. The market you see started from extra cash floating around (investors moving away from the stock market, and low interest rates), and was continued by panicky buyers afraid of being left out of the game. What happened next is that the 1. cycle naturally ended 2. interest rates went up and 3. way too much supply as a result of builders building too many houses and people leaving San Diego. This is a perfect storm that is causing more hurt for people who bought recently than the ones who sat out. The people who sat out and rented instead aren’t putting their families in financial jeopardy, so you may want to think through your pompous criticism of this class of people.

The mistake made in this market has not been buyers being too chicken, but rather the other way around: buyers borrowing money they could not repay.

Yes, there is fear in the market. And like a shark you smell blood and go in for a kill because it satisfies your juvenile ego. If you think having balls and partaking in a risky market is a noble thing, then someday your luck will run out, and it will be the careful planners who will be able to retire in comfort while you are standing in line for your next social security check.

[FutureSDguy]

What is a typical commission arrangement for when a buyer discovers and, possibly in addition, previews a FSBO home, and the seller already figured in 3% for the buyer’s agent. In interest of fairness due to reduction in service, my personal opinion is that the agent should be rewarded with 2% in the form of a 1% rebate to the client.

What if the seller won’t cover the commission–then buyer must pay the agent directly. Then in my case, I’d just do all the paperwork myself (and maybe get a real estate attorney to loook it over). This scenario would probably not go over very well the agent has already invested into the process. What’s the typical solution here?

[FutureSDguy]

Either she’s not sane, or it’s a hoax.

[FutureSDguy]

What’s worse for an economy: a lack of affordable housing, or failed loan commitments?

[FutureSDguy]

You’re right, I am associating HOAs to condos when many new communities of any sort have them (everything has to get more expensive, one way or another). And by the way, I do support rules that help keep up the appearance of the neighborhood to protect investment and quality of life. I don’t know where one draws the line on what should and shouldn’t be, but I do think streets should not be used as salvage yards. This does entail some HOA oversight, but that can be done without dues.

I am also biased towards buying a property that needs renovation. Buying upgrades upfront, as discussed earlier in another thread, involves paying more than doing the work yourself and going with someone else’s taste. A better financing plan is to do this on a home equity loan, but of course that depends on having equity to start with.

[FutureSDguy]

I purchased a townhome whose community was under development, the HOA dues was something like $50/month (7 years ago, can’t remember exact amount). At the time I didn’t really know how much HOA dues *should* be, and $50 didn’t look like anything to be worried about. Well, buyer beware. It went from $50 to $248 in 4 years, because 1. the HOA didn’t cover what needed to be covered. and 2. the community went through litigation due to defective building (on which we prevailed).

Lesson learned: HOA dues may be set artificially low on new communities so as to not scare away buyers, but will later get inceased at the discretion of the homeowners board according to the actual bills that need to get paid.

They didn’t fully finish my lot either. I happened to be the only lot that had a slope that was landscapable, but wasn’t landscaped, and of course it wasn’t irrigated. So when I did the work myself (getting permission from a president who then resigned), the association raised hell. So while I underwent harrassment from the neighbors while I wheelbarrowed two yards of dirt around the building, carried heavy landscaping bricks through my unit, and constructed retaining walls to finally complete my project. Took a while to bury the hatchet with the neighbors, and some of them actually told me I did a great job. I compromised by not promising to manually irrigate the new area (but hopefully the future owner will discover the irrigation valve and quietly start watering it off of the community system.)

Living in condos is nice for some, but you sure lose a lot of self-autonomy in the process–I’ll never do that again. People who actually *like* living in places like this are not expecting renegade neighbors such as myself and prefer HOAs to tend to every detail of their house.

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