Watch1. There aren't ever multiple offers, the listing agent is lying.
why ridiculous? because it is idiotic. When I list a property, what I want is it sold. period. Telling someone I have 25 offers, some over list is discouraging them from writing an offer. If I actually don't have any offers, it would make more sense to go out into the street, and throw all my money from my wallet into the air and walk away. that would cost me less than kicking a potential offer in the teeth, if I don't have offers.
2. The banks are fraudulently holding all the inventory back.
why ridiculousness? Well, you have obviously never worked with any banks... they are STUPID. they gave loans to the unemployed in 2006 to HELOC their homes... they lost tons of money by stupid lending, now suddenly they are brilliant? ALSO, keeping lots of homes without collecting anything in rent would go down in history as the worst business move in history. Would you start buying homes today, to let people live in them for free? basically, that is the supposedly brilliant business scheme you are accusing banks of. AND the 3rd reason this makes no sense whatsoever, is there isn't just one bank out there who can manipulate the pricing market. IF a bank could convince all the other banks not to foreclose, to drive home prices up, the best move would be to immediately foreclose and sell everything while all of your competition is sitting off the market...If this theory were possible, why wouldn't all car dealerhsips suddenly raise car prices $10,000 too? because they can't! their competition would simply sell more if they tried...
3. Listing below the market to get bidding wars is fraud. Grow up! you saw the home price was a good deal, what suddenly you are supposed to be the only buyer in the world that sees a relative value? hmmm, why did you pick that home? oh, cause it seemed like a screaming deal? surprise surprise others notice it is a screaming deal too? "it should have to be sold at the listing price..." good grief, what part of a free market to buy and sell homes to do you find so offensive? Some day, if you actually ever buy a home, you might want to sell it. I'll bet you suddenly see some value in trying to get top dollar when you sell. This argument reminds me of people who bitch about folks walking in the cross walk when they drive, and then bitch about cars when they are walking in the cross walk...
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In regards to #3, I do think it is fraud when you then go around paying for articles in all the newspapers that say a "Bidding war" is back. I think bidding is back, but would call is a "under-bidding war". Who can bid the least and find the distressed home that must sell. That is the new game and I know a lot of friends that are playing and some getting lucky.
As far as #1 and #2. Make the documents public and there might be some trust given to realtors and banks. Keep things a secret and not everyone lies but a good number will. Realtors lie, it is a fact. Your #1 says they don't do it because it would discourage people adding a bid. How about they do it to encourage a trigger hungry buyer to overbid? Maybe they have a bid for the list, and now they would like to get 100K more, so they say there are 10 bids and some above asking. If you don't think this happens then I think you are being naive.
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robertoaribas says
You are assuming a free market which in housing we don't have. Banks are not a business. They don't need to operate like regular business, if they are losing money guess what happens? Us taxpayers feel so bad for them that we fork over our hard working money to help them out. That is what is happening now. Read up on it. If they were forced to be accountable for the housing they have on their books, then I absolutely agree with you. They would do the right business moves. However, they actually benefit far greater by not doing it and then passing on the bill to us all. You are not viewing the whole bank picture. Banks don't stand by themselves.
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If banks have kept this so called shadow inventory on the books for 5 years to artificially inflate prices, they are entirely capable of keeping it on the books another 5 years while slowly releasing homes into rising prices. New construction is still dead.
So even if you believe this myth, it doesn't really matter.
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iwog says
Enter the election year and the national deficit. Opps, in walks unemployment. Banks do eventually answer to someone, just not regular business practices. When no more bailouts are possible you can guess what happens to the inventory if we haven't hit a rising price market. Yard sale!
It could happen.
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1. Realtor®s are diabolically evil in ways that mere mortals cannot comprehend. Every day, Realtor®s are sentenced for perfidies like lining up dead-end borrowers to buy their flips and cash out both ways, on the flip and on the kick back from the mortgage brokers. As long as there is a Realtor® in the transaction chain, you know something twisted is going down. It's like having one of the Mansons over for dinner. (By way of comparison, I've not seen ONE dentist ever arrested, arraigned, tried or convicted of dental fraud.)
2. The accounting rules were changed so the banks could ignore and keep dead notes on their books ad finitum and forgo foreclosure. Someone should track the Lis Pedens and see what proportion of them actually end in petition to foreclose. Patrick? The fact is banks are stupid but they know one big thing - how much REO they can carry as a proportion of their loans portfolio before they are considered dead and can be dechartered. All the biggies are dead and should be dechartered and their executives tried for treason and thrown out of helicopters over parking lots of their shuttered banks while the righteous and damned below cheer for their souls to be commended to hell.
3. Realtor®s will stop at nothing to create an artificial scarcity they can mine for maximal commissions. These are pre-clinical psychopaths who view every single moment of customer interaction as an opportunity to advance the cause of maximizing the sacred commission and there is no telling what they'll do or say, what twisted deceptions they'll craft to advance that end. It's like leaving a vampire in the maternity ward.
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RentingForHalfTheCost says
I hate banks as much as anyone but I'm sorry it's not going to happen. There's a reason banks paid back all their bailout money early and with interest. They operate in a rigged game.
I think the weakest bank is still BOA but you can forget about the rest having a bankruptcy sale anytime soon.
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DIE!
DIE!
DIE, BofA, DIE!
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From what I understand, robertoaribas bought a few investing houses in Phoenix. He thought that he cannot lose money because the price/rent is low. Now the summer is coming and no one wants to rent houses there.
He doesn't understand that the house in a desert is cheap for a good reason. "rent" can be 0 in a desert.
I wonder rather buy the houses near Facebook area.
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I mostly agree with your points 1 and 3. Maybe I would say that both issues would benefit from reform and oversight, but that would not significantly change the fundamentals.
However, as to point 2, it is a matter of fact that the banks are putting fewer houses on the market. I wouldn't call it fraudulent, although to the extent they are colluding in limiting supply they could be subject to anti-trust filings. And even if that does not happen (it probably won't) there is still the very fundamental point that the banks are accumulating a lot of houses on their books. At some point they will have to get rid of them, and that will be a negative for prices.
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xenogear3 says
Even if this is true, which I doubt, WHO CARES? It has absolutely nothing to do with his post. If you think he's wrong, how about you say what he's wrong about and why?
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xenogear3 says
Hahahahahahahahahahahahahahahahahahahahahahahahahaha!
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha!
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha!!
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drtor says
Do you have that data? I'd be curious to see REOs by month over the last 5 years. Not delinquent, just REO.
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Having both sets of numbers would tell you the story.
How many notes by all metrics really dead.
How many properties from that pool actually foreclosed.
The answer is obvious as to why - they don't want to bank to appear dead on paper. Good for the criminally nonfeasant bank to be in collusion with a criminal government to jigger the accounting.
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I don't think you are right Robert.
1) During the bubble this was a prevalent practice to get folks to compete. And I know that because I've heard that straight from the horses mouth. It isn't the smartest thing to do in today environment where buyers will just walk, but it still happens all too often.
2)You have to consider accounting rules, marking loans to the market, and more accommodative reserve standards under which banks have to comply with. By clearing inventory in order to free up reserves, and house price increases will be a long time in coming.
Bottom line in this market even though listing prices are up in some areas, sale prices are going down and will be moving toward the cash equivalent for several years even under Fed's strict policy of monetizing debt. Everyone knows there is an 800lb gorilla of poorly underwritten debt that is getting shuffled around still.
If you are worried about inflation you can always buy TIPS or possibly the floaters which Treasury is planning to start issuing. Or sadly just go with too big to fail, that cash cow is always going to be there.
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robertoaribas's website
xenogear3 says
100% rented, and I'm buying 3 more homes... because in Phoenix, the prices are rising already. Go recheck case-shiller, housingtracker.net etc.
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tatupu70 says
It is hard to get good data. OCHousingnews had a very good analysis with some charts the other day. It is specific to OC but probably a lot of the phenomena are similar in the BA.
http://ochousingnews.com/news/8-7-years-to-clear-orange-county-distressed-inventory-at-stable-liquidation-rate
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robertoaribas says
Telling someone you have ZERO offers is even worse, especially if it's the truth.
The fact remains that the agent has the means, motive, and opportunity to lie about the number of offers. There is no validation, which is a huge flaw in the current system. At a real auction, you can at least SEE the other bidders even if they might be shill bidders. In real estate, you can't see and have no documentation whatsoever about other bids on perhaps the biggest purchase of your life. You just have to rely on the famed honesty and integrity of realtors, who have a big financial motive to lie, but never do that because it would make them feel bad, right?
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Don't agree with any of the points.
1) Realtors have a financial motive in every action they do. If so many realtors didn't do it, then I'd tend to agree and it would be a non-issue anyway, but the fact is a lot of realtors do it with the intention of creating imagined urgency to get higher and higher bids. Best and Final anyone?
2)Not sure how it is in Arizona, but here in California you can simply walk down the street and find homes with the "Chase owns this" or "BofA owns this" on the garage doors. I see it all the time, and none of these homes are on the MLS after sitting for months. Why?
3) This is the "auction" model. It's the reason why people never really get good deals on eBay. It's a means to create competition, and if you have "competing" buyers, it's always a good thing for sellers, and NEVER a good thing for buyers.
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drtor says
So it's down 12% YOY?
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Patrick says
How do you figure. 1 offer accepted = big payday. Kicking an offer away = no sale and no payday.
Who risks $30K to gain $500??
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Scottsdale, AZ
xenogear3 says
Well that's a very interesting theory.
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Scottsdale, AZ
FortWayne says
Wrong. SALE prices are up in Phoenix. They are still heading down elsewhere, though.
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Fremont, CA
I have been looking for a house for more than an year. Multiple offers do come but:
1. They don't mean house will sell for more than asking.
2. House has to be in turn key condition.
I wrote at asking on an house listed for 525k. House was in turn key condition. Seller had spent close to 80K on the house he had bought at about 425K.. He got 13 offers. Mine was 10th on the list. Highest offer was 551K. I can confirm they got 13 offers because listing agent did give us the list of offers and conveyed us that we lost the bid.
On the other house which too was in move in condition, listed for 515K, I wrote 505K, they got 4 offers and house went for 510K. Below asking. But I am not sure if they really got 4 offers because selling agent was a cheat.
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realitycheck says
That's exactly correct. People hear multiple offers & automatically ASSume that it will sell for over asking. You're not going to catch a fish if you won't cast that net.
When agents tell you that 3 are over asking, that doesn't mean much. They could be over by $100-$1,000. Don't ASSume.
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robertoaribas says
Bottom feeders. This is true for low end properties. If the agent says he has 10 offers already for a million $ property then he is BSing.
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Los Angeles, CA
robert is correct again as always.
I would say agents lying about other offers is rare.
Also often they will say 'other buyers are interested' this is only a sales tactic to get you to buy as all homes will get a coupla showings/phone calls. and its probably interpreted by noobs as 'multiple offers'
If you people are so certain of what is going on in the RE industry i dare you to go out and work in that field while keeping a day job (you can do it, i did it, Robert is doing it now).
So I would say me and robert have more of a reliable knowledge than the typical complainer on this complaint site.
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Scottsdale, AZ
PockyClipsNow says
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Sebastopol, CA
I know of a place that just closed for $1.299 MM, there were 5 offers. The winning bid was all cash and had a quick close with few contingencies. It sold for the asking price and only one bid was below asking price. Some agents lie, most don't because it does not benefit them in the mid or long term. Why not? Because the best clients you can get are from personal referrals. There are a lot of misconceptions aired here by people who haven't bothered to do their homework or the math. "Agents get 6%" is my favorite. It's a 4 way split between 2 agents and 2 brokerages in most cases, half the normal sales are listed at 5% and short sales usually pay 4%.
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Ross, CA
robertoaribas says
If banks are stupid, what does that make us?
The reason that banks hold property is that it makes their books look better and makes the chance of recouping there losses better over time.
If we are talking about neighborhoods with low vacancy and where owners are keeping up there homes, then yeah a bank will sell its assets there.
But in areas where this is not the case, they are holding a, for example, 600k asset that in reality is a 200k asset which, if sold, may get other owners in said neighborhood to walk away and give up -- in those areas I guaranfuckingtee you the banks are "managing" their inventory. This is not some urban myth.
I have two friends who work for Wells Fargo. One is dealing specifically with this stuff. He told me 4 years ago that it would take 10 years to clean this stuff up. Last week he said things were looking better and they may be slightly ahead of schedule.
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Just curious, any homeowners thinking of selling?
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Tom Stone says
1/2 of 1/2 is still way too much for the slime. $250 tops for them to drive me around. Considering the skill level needed, anything above that is unfair to all other professions, including McDs
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No, no, no, Realtor®s are VICTIMS! They are worth 10x what they make in commissions, 100x! Legally, no real estate can be sold in America without their permission - just ask them - and without real estate America would disappear! If they asked for 60% permissions it would be a bargain at twice the price - just ask them!
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Tarzana, CA
Who are you working for? And why do you want this site shut down?
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1) when we were searching in the South Bay, I forget how many offers we made, probably around 10. I think all but 2 had multiple offers. There were a couple we didn't offer on because we were told they had x many offers above list and we weren't going to go above list. Unlike most stories on here, we didn't get a call back begging us to resubmit an offer - the house sold.
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Scottsdale, AZ
David9 says
What?
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Tarzana, CA
GUAB says
I just think it is so obvious the CALIFORNIA real estate market is being manipulated, that is what came to mind.
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tiny tina says
Stay cool, be persisting and keep making offers.
I have similar experience. The house not necessary goes to the highest bid, but to the highest “stand out” offer, means all cash. Understanding your competition thinking and gaining experience you be a happy owner someday.
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Scottsdale, AZ
David9 says
He's said multiple times what he's doing. So the comment doesn't really make sense.
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Tarzana, CA
GUAB says
Sorry to hear that. But since I am and have been a high paid Analyst my whole life, I obviously make sense to some people.