[no_such_reality]

Pc, no, you don’t take a lower rate. In fact, you justify your rate based on identifying three comparable homes in the area that renting. The HUD representative validates the rentals and comparable-ness. And authorizes the rate.

So basically, you get fair market rent and the Government guarentees it. The people in the program don’t want to lose it, so they are going to pay their part. Which is limited to 30% of their income. The Section 8 program makes up the different between their 30% of income payment and whatever your FMR is up to 120% of the HUD determine FMR for bedroom count in area.

For example, Say the family renting the OP’s house makes $18,000 a year. Their income is $1500/month. The max contribution from them is $500/month.

The landlord will get a $500 check from the family and a $1300 check from the government.

do you think the family is going to find a way to get the $500 and not bother you too much? I think so.

http://www.hud.gov/offices/cpd/homeless/library/sro/finalguidepdf.pdf

[no_such_reality]

Hmm, we need a condo familiar Piggington member to do a site visit and report back on the condition of the condo.

[no_such_reality]

Even in the most boring development (from any era), almost all homes have distinguishing characteristics.

Maybe that’s the key point SDcellar. It is the land of tract homes and compared to the unique older homes I see, they are very similar. One may face west, the other south, one on a cul de sac end will others are on the lane in, but, essentially the same. The interiors may vary, sometimes dramatically, tile, versus wood floors, tan granite versus dark granite, Maple cabinets versus old cabinets or dark cabinets. But…

All that is trivial.

In fact, most if it, is often going to be replaced by me, it’s a matter of when. The difference is I look at floorplan, location, and lot. Those are the biggy items you aren’t changing.

A $30,000 kitchen upgrade means nothing to me if they’ve used dark cherry and dark granite or maple and tan granite, I like maple and dark green granite. So the interior with cherry and dark granite is worth significantly less than it’s upgrade. In fact, the tract home that has cabinets and countertops that need replacing and has the price discounted or rebate for their replacement attached is probably more attractive.

If I look for a home that has the floorplan, location and lot I want and a previous owner that shared my sense of style, it isn’t happening. Nor should I limit my looking homes that are close, the big challenge is floorplan, lot and location, the rest is correctable. Heck, even floorplan can be somewhat modified. It’s a matter of cost, so if you have the floorplan I want, in the right location, on an acceptable lot, I could buy your home. I still have to make it MY home.

Even if I buy a gorgeous home, I still have to make it MY home.

[no_such_reality]

I got a good price but this house is not something I really love.

That is the inherent problem with real estate.

[no_such_reality]

Garbage in, garbage out.

[no_such_reality]

Chrispy, I tried to correct that with an edit, but something got lost and it errored me out.

my rinse cycle was the advice to check the public records to verify last sales price and the outstanding loans and liens against the property.

Many of the homes we’re starting to see, literally, can’t be sold for less than their asking price, the sellers are upside on the loan. They aren’t motivated, quite the opposite, they may be desperate, disgruntled, angry, and irrational due to the stress of their financial trap, but not motivated by anything less than their asking price, because they literally can’t close the deal at less than the price. About the only thing that gets them out of the house is foreclosure or the return of price appreciation.

It’s why prices get sticky going down. Sellers that can afford to sell don’t because prices are falling and the market is flooded while those that are trying to sell, can’t afford less than their asking price or less than the built in negotiating room on their price (10%)

[no_such_reality]

Most sellers need to realize that their home is pretty much cookie cutter.

Personally, I think most sellers won’t play nor their agents. If you look at the agent offer forms, they are really about protecting the agent, their brokerage and their commission commitment. They aren’t about protecting the buyer or investor.

If three homes are similar enough that you like them all and they are the basically the same, same neighborhood, same floorplan, etc.

Lowball one. The price you want to pay minus 10-20%. If they don’t negotiate, move on. If they counter, counter back, if you think you can get to the price you want. If not, move on to property two after a week or so. Repeat. Move on to property three. Let them sit a couple months, meanwhile, find three more homes you like, repeat. If still no sale, if move one or go back to property one now that they’ve had a chance to make another three or four monthly payments and had a couple looky-loos breeze through, submit your original offer minus 9-12% (the current monthly fall rate of sold homes.) They’ll probably brush you off, move on, repeat.

[no_such_reality]

WH, that’s just mean. Must be why I love it.

I’ve been thinking while I look at all the homes in my neighborhood, that several of them would be good homes, once they get back to half their current price.

Maybe I should just get off my butt, and put the offer in now for the price I’ll be able to buy it for in 2009 or 2010 before they have a chance to trash the house.

[no_such_reality]

I popped into the discussion forum, looks like the lenders are tittering over defaults, collection agency non-performance etc.

The company uses a rather bizarre habit of turning accounts 1 month past due over to the collection agency… Non-performance

I suspect the defaults will come in higher than the typical Credit Agency reported defaults. If the numbers come in much higher than traditional, say 20% (i.e 3.3% default rising to 4.0% default, you get a good dent to about 10% ROI.

With traditional default rate, the sweet spot appears to be tbe C credit group with a FICO in the 650-680 range. Default adjusted return is 11.50%. The others all drop below 10% when you head to the traditional upper default curve. BUT … yeah big but, that’s based on a debt to income ratio of less than 20%. These are unsecured loans, honor system documentation other than credit score…

I suspect you’ll have significantly higher write-offs.

You add in the risk of underperforming account collection, fiduciary loss (Prosper.com goes under) or something else and I think you’re looking at under 10% best case.

[no_such_reality]

Yeah, I didn’t know they had popped up either. But…

I suggest you understand the default rates, that site is less than a year old. Take a look at how manyof their loans made in Q1 of this year are 1-3 months late already.

Coming Defaults

What amount of the 10% that’s late is going to go default is too much to tell. Honestly, I’d geuss at least half which puts a big dent in the earnings.

[no_such_reality]

On the way down, RE is sticky. Prices come down very slow

Look at my other post about my 3 neighbors chasing down the market. None of them shaved off 10%

None of them have sold either. A person that is putting up a ‘if they’ll pay me this, I’ll sell” isn’t really part of the market. It’ll be interesting when people start to pull comps this winter and start seeing recent sales taking bigger hits.

I think the biggest percentage drops will come in spring 08, as sellers realize that the spring 07 rebound did not happen, and RE is dead.

I’m wondering if SD will see RE as dead this winter if YoY numbers come in bad. OC & LA seem to be lagging SD by a year.

[no_such_reality]

“to see if there’s something from God or not.”

Apparently his God isn’t in favor of 5700% return in 2 years.

[no_such_reality]

Wow, what a biased article. It’s totally slanted so everyone that sold appears to have done wrong even if they recovered and bought something that is now worth 2 million in their estimate…

[no_such_reality]

50 cents on the dollar. (50% drop)

After two more years, I suspect we’ll be in the inflation noise part of the trough, I suspect the most damage will be done quickly this time because of what is propping the housing market up. Our curve is going to look flat in ’06, falls of a cliff in the first part of ’07 and ’08 and then flattens.

However I don’t know if you’ll ever see those numbers published. I think you’ll be able to get a home for half of today, but I think the numbers that are published will be fudged in a variety of ways to keep the appearance of the bubble collapse from being apparent.

After seeing the change from the association on affordability, I’m comfident there are many ways for them to distort the numbers.

Things such as switching from median to average (mean). Using a “seasonally” adjusted price… etc.

Also, the realtors are starting to push sellers to offer “comps”, not comparables, complimentaries as a way of lowering the cost while maintaining the “price”.

[no_such_reality]

A bigger concern as cited in the article is the Fed trying to “fix” it or “soften” it.

To me that says one thing… inflation.

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