[sdrealtor]

Steve,
You seem to be singing a different tune of late. Last month, you said prices werent going down and this month you seem quite a bit more pessimistic. What have you seen that made your perspective change?

BTW, I think davidson is toast too.

[sdrealtor]

PS,
Do you really believe we could see rates between 15 and 20%? When rates hit those levels during the Carter Era lots of people I know (including my parents)put everything they had into CD’s and turned a few hundred K into millions in cash.I would love to see it as I could retire today if rates were that high.

[sdrealtor]

At a GRM of 10 my home would be sell for 20% less than what it cost to buy new in 1998. I have a hard time seeing that happening.

[sdrealtor]

Doofrat,
Do you really believe that someone who bought a house in 1997 for 300K and watched it go to 900K in 2004 will sell it for 600K in 2010? They tasted the 900K price once and I think they wont be so quick to sell particlarly when they know they can rent it out for $1000+ positive cash flow.

[sdrealtor]

I’ve been predicting this for a couple months. Mid-December is when it will all get real. Double digit declines should strike fear in people’s gut and will lead to another 10% decline over the next 12 months.

[sdrealtor]

Thank you for the compliment. I think the system sucks and would love to see it changed. I would be more tahn happy to work for lower fees if there was more volume. If clients would agree to pay me $100/hour for my time which I believe is fair, i would do cartwheels. I bust my tail for clients for months only to have them walk into an open house and buy something for the agent thinking the listing agent will give them a better deal (which they usually dont as their fiduciary responsibility is to the seller). Last year I had clients whose house I sold a few years back and got them a great property below market before it went on the market through my network call me to list their home. We were good friends and they constantly told me I had changed their lives for the better financially as well as putting them in a house they loved on a street they loved living on in a neighborhood they never would have known about or considered. Before I got there, a neighbor whispered in their ear that they needed the marketing muscle of some slimy Realtor that advertises how great they are, they called them and the house was listed with another agent an hour before our appointment. For the record, he let them overprice their home which sat on the market and cost them $50K.

Intelligent people make incredibly bad RE decisions all the time. I get great personal satisifaction when I can truly help someone achieve something that makes a difference in their life and their families life. I take pride in my work and always try to put my clients best interests first. For this, I and the rest of my colleagues deal with the majority of clients that are disingenuous, have no loyalty to us and end up shooting themselves in the foot. When it works, its a great business but most of the time it’s pretty cut throat and brutal.

[sdrealtor]

I haven’t looked at any charts but My Yahoo homepage tracks about 100 stocks on a daily basis. I’ve consistently seen a helluva lot more green than red since Spring.

[sdrealtor]

I haven’t looked at any charts but My Yahoo homepage tracks about 100 stocks on a daily basis. I’ve consistently seen a helluva lot more green than red since Spring.

[sdrealtor]

You sound like a lawyer. The point is missed if you are focusing on the percentages. lawyers work for contingency fees based upon performance just like Realtors contrary to JES’s point.

I’m not here to protect the system or scare anyone into anything. Its a system that has been in place for a long time and has worked pretty well IMHO. Understanding what really goes on in this business on a daily basis I just have a hard seeing it go away.

[sdrealtor]

Lawyers do work on a percentage basis and it is a much higher percentage. Contingency fees on lawsuits run around 33% so Realtors taking your listing for 4 to 5% is a bargain in comparison. I also think you comment about paying a “non-college educated” realtor $X was out of line. I know plenty of Ivy league educated individuals that are complete failures and plenty of high school educated individuals that are stunningly successful in all types of business endeavors (i.e I’m not referencing RE).

I think the answer is that you are paying for the relatively efficient system of buying and selling homes that Realtors have created. If there were no Realtors the selling of homes would be far less efficient and prices would be substantially lower. Many would argue that this is a good thing until the time comes to sell their home. I am prepared for whatever comes down the pike and just have a hard time seeing the demise of this system because I have seen how it operates and how efficient it is. Believe it or not JES, I have a dormant CPA credential from about 20 years ago among many other things as well as two Master degrees in Business. I have and will continue to shift my focus toward entrepreneurial endeavors and currently have two business ready to launch outside of RE. I have no agenda to protect and no axe to grind

I would love for houses to be cheaper and for honest hardworking people to be able to afford to live in the types of neighborhoods they deserve to. However, i think too much emphasis is on how much Realtors are paid in my opinion as most of you perceive its alot higher than it really is. If the pay were lower you wouldnt attract the calibur of individual that do it well and will only attract the low level that is so prevalent right now because there are no barriers to entry.

[sdrealtor]

Interesting friends. I dont know anyone that got on a bus to AZ.

[sdrealtor]

You got it backwards, the Target cashier should ADD the value of the benefits they recieve not subtract them. As an independent contractor I pay for everything that employees receive as part of the compensation and genereally dont value.

The average realtor does not have 10 sales they have 2 to 4 which is part of the problem. With very low barriers to entry, agent productivity is very low. I would gladly work for less per transaction if the volume was there. To say 90% of my time is spent marketing is not accurate. Alot of my time is spend learning and identifying opportunities for clients to beat the market. That is what I get paid for. To say 05 should be spent marketing is very naive. All business require a significant marketing effort, at least all successful businesses.

[sdrealtor]

I rented a beautiful 2BR/2BA condo in Rancho bernardo in 1996 for $800 per month. This was the bottom of the market before things picked up. They were one of the early condo conversion and were selling for about $130,000 in 1997. At the time HOA fees were about $150/month and a 5/1 ARM with 700+ fico scores was around 8%. There was no piggyback mortgages available and you had to pay PMI which ran about $125/month. Do the math and tell me this was breakeven.

[sdrealtor]

Small problem Kev,

“Here is an example of one I was just looking at: MLS# S442558

Guy wants $464k for his 3bedroom, ZEstimate is like $571k so he has already priced $100k below appraisal. he bought this property just over a year ago for $432k so any lower and he is going to get burned.”

The Zillow Zestimate is pretty arbitrary and is not an appraisal. NOT EVEN CLOSE! He is priced $32K above what he paid HOPING to get out whole after paying his transaction costs. Selling after 1 year for what you paid is not getting burned, it is bearing the cost of making a bad decision. Selling at $375K or even $400K would be getting
burned.

BTW, I do agree that the Moody’s figure is completely absurd.

[sdrealtor]

I agree that an agent that tries to justify their value because of the high cost of E&O insurance is a liar or uninformed. They are also incompetent and not worth what you pay them. I never made this claim and never have made this claim. This was something that was fabricated by PC and JES as an argument against me. The funny thing is that I still see 6% thrown around when it is not commonplace nor has it been common place for at least 3 years. It is something from the past that discount brokers like Help U Sell (and yes even SD Realtor on his website) use to claim they are saving people a specific amount of money. It turns my stomach every time I see a HelpUSell ad with a client claiming they saved $10,000 by not paying 6%. Virtually no one pays 6% and it is downright misleading and bordering on fraud for them to claim that people are saving this. They cover themselves by putting in fine print that the savings are based on a 6% commission rate.

My value is protecting my clients best interest and helping them to beat the market. If you looked at my track record it would be pretty clear that I have no problem justifying my earnings. Based upon what I see and have seen people pay for garbage I know this is not what you get from all agents.

BTW, good E&O insurance cost about $1300/year. I have seen numerous high quality agents that have been in the business over 10 years with the highest level of skills and ethics get pulled into mediation and arbitration every month.

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