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Eight groups who lie about the housing market


By Patrick   Follow   Sat, 11 Jul 2015, 1:03pm PDT   1,822 views   24 comments
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  1. Buyer's agents lie, because they get nothing if there is no sale.
    Buyer's agents get paid only if their clients buy, no matter how bad the deal is, which
    is the exact opposite of the buyer's best interest. Agents
    take $100 billion dollars each year in commissions from
    buyers. Agents claim the seller pay their
    commission, but fail to mention that the seller gets that money from the
    buyer. Think about it: who brings the money to the table - the seller or the
    buyer? All money comes from buyers. No buyer, no money.

    Real estate in America is all about preventing the buyer from getting information. There is no free market because
    bids on houses are never published and you have no way of knowing whether bids are faked to get you to
    think you have to pay more. There should be a law to make all bids public and
    validated by a bank, but the NAR is one of the largest lobbyists in Congress, so
    don't expect any changes soon.

    Quote from a patrick.net reader: "When I'm told that the seller has
    multiple offers, I tell the broker that we've also put offers on several other
    houses. Fear of loss works both ways..."

    Another reader:

    Never trust a word from the realtor. They are constantly lying that
    "I heard there's another offer, make your highest offer" or
    "The bank has a verbal with someone, but if you come in with a strong offer
    they might take it." They don't seem to understand that I want a deal,
    there's no reason to get in a bidding war over any particular property in
    this market, and if one owner isn't willing to consider a low bid,
    there's a house right down the street for sale too. As
    soon as I told one agent I didn't want to make an offer if there was a
    second bidder, that bidder mysteriously disappeared and he claimed he
    mis-heard the information and there wasn't anyone else.

    If a house is a really good deal, agents have a big financial motive to buy it first and flip it to you.
    Great quote from patrick.net reader Linda:

    Realtors ALWAYS GET FIRST DIBS AT EVERY HOUSE even before it is listed.
    Realtors always have a shot at the best deals. In fact, IF A LISTED HOUSE WAS
    NOT ALREADY PURCHASED BY A REALTOR OR one of their buddies---that means IT IS A
    BAD DEAL. If it were a "good" deal---they would have bought it. Under the
    REALTOR / MLS monopoly system--- prospective buyers only get to look at the junk
    left over that Realtors and their "friends" do NOT want.

    This means that your best chance of finding a good deal is by looking at the
    listings the MLS is not showing you: FSBO sites, Craigslist, foreclosures,
    builder inventory. It's also productive to talk to people you know who might
    want to sell, or send out postcards in a certain area. Avoid the agents
    to avoid commissions and to get a more complete view of the market.

    Why should you give up nearly two years of your life working to pay an agent
    who is not even really helping you? That 6% commission means 6% of the 30 years
    of work it takes to pay off a house. That's 1.8 years donating your labor to
    a real estate agent! Just find a house on your own, hopefully a house for sale by owner,
    and get a real estate lawyer by the hour to draw up the offer and complete the
    sale.

    There are agents who really believe they are helping the buyer, but
    they're in denial about their conflict of interest. Author Upton Sinclair had a
    great explanation for this: "It is difficult to get a man to understand
    something when his salary depends on his not understanding it."

    Seller's agents are not necessarily much better. A famous study by economist
    Stephen Dubner pointed out that agents get higher prices when selling their
    own houses than when selling clients' houses.

  2. Mortgage brokers lie, because they take a percentage of the loan. They
    want buyers to take out the biggest loan possible to maximize their commission.
    Even worse - mortgage brokers get paid according to how bad the deal is
    for the buyer. The worse the deal is (higher interest rate, points, fees, etc)
    the more the mortgage broker gets!
  3. Government agencies like Fannie, Freddie, and the FHA lie, because
    their own existence (read "executive salaries") depends on guaranteeing private
    loans with public money. These agencies are perhaps the largest scam ever
    devised. Most people will borrow as much as they possibly can to buy a house.
    The existence of Fannie and Freddie just make it possible to borrow yet more
    money by pushing lending risk onto taxpayers, benefiting bankers with larger
    interest payments, and harming buyers with higher housing prices. Ironically,
    Fannie and Freddie drive up the price of housing in the name of "affordability".
    The public is unlikely to ever understand this. The perfect crime.
  4. Banks lie, at least when they can get origination fees and then sell
    the mortgage, because in that case they do not care about the bankruptcy of
    borrowers. Banks sold most loans to the government agencies Fannie Mae or
    Freddie Mac, and now use the FHA the same way. The conversion of low-quality
    housing debt into "high" quality government debt was the main support for the
    housing bubble. Fannie and Freddie already imploded, and the FHA is now on the
    edge.

    The other way for banks to dump the risk of loan default has been the Wall
    Street market for private mortgage-backed securities. When mass foreclosures
    eliminated the loan-resale market, the Federal Reserve bought private
    mortgage-backed bonds in huge quantities, using newly printed cash. The Federal
    Reserve is nothing short of a criminal conspiracy to protect the banker class at
    the expense of the rest of us.

  5. Appraisers lie, because they are paid by mortgage brokers and banks,
    so they are going to give the appraisals that mortgage brokers and banks want to
    see, not the truth. Appraisers that kill a deal by telling the truth do not get
    called back to do other appraisals.
  6. Newspapers lie, because they earn money from advertising placed by
    real estate agents, lenders, and mortgage brokers. Papers are pressured by that money
    to publish the real estate industry's unrealistic forecasts. Worse, agents
    have a near-monopoly on actual ask and bid information, and newspaper reporters
    never ask agents hard questions like "how do we know you're not lying
    about those prices?" The result is an endless stream of stories reporting that
    the real estate agents say it's a good time to buy. Asking
    real estate agents about housing is like walking into a used car dealership and asking the
    salesman if today would be a good day to buy a car.
  7. The Federal Government lie, because everyone in Congress gets
    bribes (oops -- I meant campaign donations) from the NAR and from the
    banks. So every Federal law will be aimed squarely at increasing commissions for
    the NAR and increasing interest payments to banks. Buyers lose, because they
    have no lobbyists in DC. The very laws of our country have been corrupted to
    squeeze more profits out of you.
  8. Current owners lie, because they do not want to believe they are going
    to lose huge amounts of money. Anyone who owns is likely to encourage you to buy
    too, to prop up their own house value via comps, and so that they can feel that
    they are not alone in their sinking boat.

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Next Page: 37 bogus arguments about housing




The Housing Trap


You're being set up to spend your life paying off a debt you don't need to take
on, for a house that costs far more than it should. The conspirators are all
around you, smiling to lure you in, carefully choosing their words and watching
your reactions as they push your buttons, anxiously waiting for the moment when
you sign the papers that will trap you and guarantee their payoff. Don't be
just another victim of the housing market. Use this book to defend your freedom
and defeat their schemes. You can win the game, but first you have to learn how
to play it.

115 pages, $12.50

Kindle version available

Discuss the book

Comments 1-24 of 24     Last »

DieBankOfAmericaPhukkingDie   Sat, 11 Jul 2015, 1:10pm PDT   Share   Quote   Permalink   Like (3)   Dislike     Comment 1

Mortgage brokers have one duty:

Teach the buyer how to lie in a way he can overlook on a mortgage application.

In 2008, the FBI found that like half of all the mortgage frauds they looked into, the signatory was instructed how to fill in the application with bogus data by brokers and realtors.

In a just world, the buyers would be foreclosed and punched in the face and the professional co-conspirators would be stuck in the cartoid or femoral artery and left to bleed out while the buyer watched.

Strategist   Sat, 11 Jul 2015, 4:39pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 2

Patrick says

Eight groups who lie about the housing market

I want to know who I should believe.

Patrick   Sat, 11 Jul 2015, 4:48pm PDT   Share   Quote   Permalink   Like (2)   Dislike     Comment 3

Strategist says

I want to know who I should believe.

don't believe anyone who is selling you something - especially not anyone in the real estate industry - until you understand the situation very clearly for yourself.

they have a whopping huge financial motive to lie to you. here's a good question for your agent: gosh mr realtor, if this house is such a good deal, why didn't you buy it yourself and flip it for a profit already, or rent it out?"

bob2356   Sun, 12 Jul 2015, 4:01am PDT   Share   Quote   Permalink   Like   Dislike     Comment 4

Patrick says

Strategist says

I want to know who I should believe.

don't believe anyone who is selling you something - especially not anyone in the real estate industry - until you understand the situation very clearly for yourself.

they have a whopping huge financial motive to lie to you. here's a good question for your agent: gosh mr realtor, if this house is such a good deal, why didn't you buy it yourself and flip it for a profit already, or rent it out?"

That's just silly. If they had to money to buy a house and flip they wouldn't be selling real estate in the first place.

Anyone that would incur a house sized debt without carefully researching first deserves whatever they get.

DieBankOfAmericaPhukkingDie   Sun, 12 Jul 2015, 4:11am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 5

bob2356 says

That's just silly. If they had to money to buy a house and flip they wouldn't be selling real estate in the first place.

Realtor racketeers have separate incorporated entities with long-standing relationships with banks to finance their speculations. They're in and out in a matter of weeks or days to get the biggest chunk of the gain on properties in play. One of the most frequent charges leveled at the profession during the melt-down was creme skimming listings. Realtors directly or through captives or straws would play a property and squeeze whatever juice was available out of the opportunity.

The fact is that Realtors have a half dozen lines of business at any one time, playing every angle and screwing every market player at every opportunity. Lying to every buyer they encounter is just one of them.

If they could make money doing it and not get caught, Realtors would spend their days shooting into basinets at maternity hospitals. These aren't normal people. They're criminal pathologies with toupes.

bob2356   Sun, 12 Jul 2015, 5:18am PDT   Share   Quote   Permalink   Like   Dislike     Comment 6

DieBankOfAmericaPhukkingDie says

bob2356 says

That's just silly. If they had to money to buy a house and flip they wouldn't be selling real estate in the first place.

Realtor racketeers have separate incorporated entities with long-standing relationships with banks to finance their speculations. They're in and out in a matter of weeks or days to get the biggest chunk of the gain on properties in play. One of the most frequent charges leveled at the profession during the melt-down was creme skimming listings. Realtors directly or through captives or straws would play a property and squeeze whatever juice was available out of the opportunity

Yea sure right. Most realtors are part timers who sell 1-2 properties a year maybe. Seems like you should become a realtor and make the easy money big bucks.

SoftShell   Sun, 12 Jul 2015, 6:02am PDT   Share   Quote   Permalink   Like (3)   Dislike     Comment 7

The exact opposite is true.
If I wanted to flip houses for a living I would become a realtor which would give me the inside access needed to guarantee success.

bob2356 says

That's just silly. If they had to money to buy a house and flip they wouldn't be selling real estate in the first place.

SoftShell   Sun, 12 Jul 2015, 6:18am PDT   Share   Quote   Permalink   Like (2)   Dislike     Comment 8

i think buyer and seller are responsible for funding the realtors.
the seller is the stupid one agreeing to give up 6% of the purchase price to sell their house.

for less than 1 grand the seller could
* hire someone to create a 1 or 2 page website for marketing the house, complete with pictures and all relevant data. just copy the formatting of a zillow or trulia page to get it right, or buy one of the thousands of html templates for selling a house for less than 50 bucks and fill in the details.
* purchase web site space and a url for your site
* put a sign on your lawn, put your url out into cyberspace sites like fsbo, craigslist
* make a sheet of paper advertising your house with tearoff tabs on the bottom, put in local supermarket bulletin boards and such.
* all advertisement should point to your url as the final destination for information.
* show your house by appt as needed, and bring 2-3 friends with you for security each time.
* line up a real estate attorney to do the paperwork when a sale is executed.
* on 250k sale, maybe spend 1-2% of the sale price to execute the above.

Patrick says

Agents claim the seller pay their

commission, but fail to mention that the seller gets that money from the

buyer. Think about it: who brings the money to the table - the seller or the

buyer? All money comes from buyers. No buyer, no money.

Call it Crazy   Sun, 12 Jul 2015, 7:34am PDT   Share   Quote   Permalink   Like (3)   Dislike (2)     Comment 9

SoftShell says

i think buyer and seller are responsible for funding the realtors.

the seller is the stupid one agreeing to give up 6% of the purchase price to sell their house.

for less than 1 grand the seller could

Exactly spot on!!

I did all those similar things when selling the majority of my past houses. One thing to add to your list, there are flat-rate realtors who will put the house on the local MLS site for a couple of hundred bucks. This way, the listing will also populate to Realtor.com and into many of the national realtor web sites too.

I also had agreed, depending on the private buyer who came to look at the house, to pay a flat rate amount to their buyer's agent if we accepted a deal. Some buyers need their hand held to get thru the process and use an agent.

Anyone who agrees to paying 6% to sell their house needs their head examined!

DieBankOfAmericaPhukkingDie   Sun, 12 Jul 2015, 7:50am PDT   Share   Quote   Permalink   Like (3)   Dislike     Comment 10

bob2356 says

Yea sure right. Most realtors are part timers who sell 1-2 properties a year maybe. Seems like you should become a realtor and make the easy money big bucks.

http://www.phillymag.com/news/2015/04/02/bucks-county-realtor-charged-with-643k-fraud/

I typed Realtor into Google news and this is what came up:

A multi-party scam in which Realtors were lying to buyers, sellers, HUD, banks and municipalities and registries of deeds all at the same time, every single party and counterparts, without exception.

This is all Realtors do. Game everyone at the table and size up every situation for maximal opportunity for themselves and, if they can't avoid it, their co-conspirators.

Between 2008 and today, thousands of realtors have been indicted for every kind of fraud against every bank and government agency in the states.

The only organized crime gang with a record even close to NRA is the Medellin Cartel.

carrieon   Sun, 12 Jul 2015, 8:01am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 11

Yup, buyers can expect to be playing against a stacked deck today when dealing with real estate professionals. All realtors and attorneys are;licensed to list the properties and transact the order, but yet none of them are ever investigated or have their licenses removed for fraud?,

tatupu70   Sun, 12 Jul 2015, 8:06am PDT   Share   Quote   Permalink   Like   Dislike     Comment 12

SoftShell says

i think buyer and seller are responsible for funding the realtors.

the seller is the stupid one agreeing to give up 6% of the purchase price to sell their house.

This can actually be shown pretty easily by comparing the sales prices of similar homes that are sold with realtor vs. sold for sale by owner. Realtors sell houses faster, but I don't think they get 6% higher prices. It's mostly the seller that pays the 6%.

jvolstad   Sun, 12 Jul 2015, 8:09am PDT   Share   Quote   Permalink   Like (2)   Dislike     Comment 13

You're missing one group. House Inspectors. After the inspector kills a couple of sales for the Realtor, that inspector will no longer be on the agent's "preferred" vendor list.

I once watched an inspector being trailed by a Realtor, with the Realtor questioning the problems that the inspector was finding.

Call it Crazy   Sun, 12 Jul 2015, 8:11am PDT   Share   Quote   Permalink   Like (2)   Dislike (2)     Comment 14

tatupu70 says

Realtors sell houses faster, but I don't think they get 6% higher prices.

Realtors don't "sell" anything....

If the house is priced right and worth the value, it sells.... Period...

Call it Crazy   Sun, 12 Jul 2015, 8:39am PDT   Share   Quote   Permalink   Like (1)   Dislike (2)     Comment 15

tatupu70 says

Realtors sell houses faster, but I don't think they get 6% higher prices. It's mostly the seller that pays the 6%.

They don't get higher prices. I sold my last two houses myself. In both cases, I spoke with realtors who were experienced, sold many houses and knew the local market. These "experts" recommended a list price that was at least $20K below what I thought in was worth. Needless to say, I didn't use them and went my own route and listed/sold both houses.

Had I used these "expert" realtors, I would have sold the houses for $20K less and on top of that, would have paid an additional 5%-6% commission on top.

Most realtors just are looking for an easy sale and a quick, give away deal. They don't give a crap about the owners.

tatupu70   Sun, 12 Jul 2015, 8:59am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 16

Call it Crazy says

Most realtors just are looking for an easy sale and a quick, give away deal. They don't give a crap about the owners.

This is true and why all the stories about fake offers to make buyer raise their price is nonsense, IMO. Realtors want a quick and easy sale. They don't care about an extra $100 in commission.

I've had 3 occasions when buying that I was told there were multiple bids. In each case, I didn't raise my bid and someone else got the house. Which was fine with me. When I sold my house there were multiple bids and I saw them all. They were real.

CaptainShuddup   Sun, 12 Jul 2015, 9:12am PDT   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 17

You forgot the buyers also lie to them selves. People pressured into buying into neighborhoods that they know damned well they can't afford.
Since the fall of classic enonomics where savers are rewarded, and savvy consumers buy a house with in their means. Then through time and equity eventually move up.
New homeowners are comming right out of the box, as wanting their move up dream home from the get go.
When they know they don't have funds, the job, nor the whereital to carry such a high mortgage to a 30 year fruition.
It would kill them to live where the lawns don't grow because the residents are too poor to shrug off city hall's no irrigation order.

turtledove   Sun, 12 Jul 2015, 2:37pm PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 18

I find it quite shocking what bankers aren't taught or are trained to ignore. I bought a house last Thanksgiving. When I was going through the mortgage application, I supplied them with everything they asked for. While they were reviewing everything, I was putting together all the documentation we would need for being self-employed, expecting that they would ask for all that next. They never asked for it. They treated us as if we were employed. Now, I never lied to them. They were supplied with paystubs (which showed absolutely no withholding, as he was a partner, not really an employee), tax transcripts, which showed that all our income was filed through the s-corporation. For whatever reason, they insisted on seeing us as regular w-2 wager earners. I wanted the house, so I wasn't about to make a big deal out of it and cause delays... But, I'm an accountant. I WOULD notice immediately if you had a paycheck that had no withholding. I would want to know why a supposed regular employee pays no withholding. At the very minimum, I'd want to make sure that you had enough money (in addition to all the money you need to buy the house) but also enough money to cover your quarterly tax payments. Given all the stories you hear about banks making it very difficult for self-employed people to get loans, I was truly surprised by how much they DIDN'T want to classify us as self-employed... Even though from a tax perspective, that's exactly what we are. The evidence was right there, but either they don't know what they are looking at... Or they are choosing to look the other way... Very strange.

carrieon   Mon, 13 Jul 2015, 4:20am PDT   Share   Quote   Permalink   Like   Dislike     Comment 19

turtledove says

Even though from a tax perspective, that's exactly what we are. The evidence was right there, but either they don't know what they are looking at... Or they are choosing to look the other way... Very strange.

Loan officer's typically ask to see tax returns from the self-employed. That loan officer sounds new, because any experienced loan officer would of asked for it?

CaptainShuddup   Mon, 13 Jul 2015, 1:00pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 20

turtledove says

Given all the stories you hear about banks making it very difficult for self-employed people to get loans, I was truly surprised by how much they DIDN'T want to classify us as self-employed...

Don't ask don't sell.

Strategist   Mon, 13 Jul 2015, 3:04pm PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 21

Call it Crazy says

Had I used these "expert" realtors, I would have sold the houses for $20K less and on top of that, would have paid an additional 5%-6% commission on top.

Most realtors don't know crap from shit. They say you need a realtor to negotiate a better deal, but all they do is play messenger.
Pointing out the obvious like "this is the kitchen" Filling out forms, and bullshitting is all that is required to earn a massive commission.

DieBankOfAmericaPhukkingDie   Mon, 13 Jul 2015, 3:20pm PDT   Share   Quote   Permalink   Like (2)   Dislike     Comment 22

The only way to reliably communicate with a realtor is to approach them in complete silence and beat them unconscious, piss on their faces and walk away.

Entitlemented   Wed, 15 Jul 2015, 2:38pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 23

Patrick says

Government agencies like Fannie, Freddie, and the FHA lie, because

their own existence (read "executive salaries") depends on guaranteeing private

loans with public money. These agencies are perhaps the largest scam ever

devised. Most people will borrow as much as they possibly can to buy a house.

The existence of Fannie and Freddie just make it possible to borrow yet more

money by pushing lending risk onto taxpayers, benefiting bankers with larger

interest payments, and harming buyers with higher housing prices. Ironically,

Fannie and Freddie drive up the price of housing in the name of "affordability".

The public is unlikely to ever understand this. The perfect crime.

This summary of the conflict of interest of institutions / government is all true. We dont need more bad laws on these conflicts of interest, rather as many have noticed the laws dont adress the root cause of the housing bubble which was conflict of interest, greed, and a hyperinflated interest in helping the poor turned into a cash cow for the listed groups.

A law needs to be written to mitigate these conflicts (Glass Stegall may have address some of them).

Heraclitusstudent   Wed, 15 Jul 2015, 5:12pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 24

Patrick says

Buyer's agents lie,
Mortgage brokers lie,
Government agencies like Fannie, Freddie, and the FHA lie,
Banks lie,
Appraisers lie,
Newspapers lie,
The Federal Government lie,
Current owners lie

So most Americans lie, and the best that can be said about it is that they lie to themselves...

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