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Talking about Realtors(tm) and Mercedes. I once rode with a realtor(tm) on her supposedly brand-new Mercedes. I asked when she bought it, just to humor myself (and bracing for some hot airs about to blow by). As predicted, she said she'd just bought this car last week, brand-new. The car indeed looked clean, but when I glanced on the odometer, the reading was 23,500 something miles.
Must've been lots of trips back and forth Phoenix and Vegas.
_smile_
Of course there are good realtors. Deb over at Ben's is a good example.
Sales, in general, is a grueling business and cause psychosis in the most reasonable of chaps. A hack playwright made a name for himself by writing a piece on the topic, condemning us all to an endless stream of his humorless droning morality tales, all released to embarrassing shrieks of praise from the Times.
I wonder how much dislike there is on this board stems from a previous observation that many people here are either engineers or engineer-like, and given to analysis. There is a comical tension between sales ("These engineers turn out shit and think they are so smart") and engineering ("These jackasses are just empty suits, promising shit no one could build. And they get paid more!") Engineering is driven by mathematics and rationality, while sales is driven by emotion, usually fear or greed.
In any event, ScottC, for his hyperbole, seems like a reasonable enough guy to have a beer with.
Besides. Engineers smell.
Cheers,
prat
The world may one day lash out at these know nothings and expunge them form the process. They must expiate for their wrongdoings!
It's happening right now...... The worst time for a realtor is not the bust itself but the time just before the bust when it just starts to get slower. This is the time when all efforts fail...when advertisment and footwork expenses are wasted because the seller is still thinking up and the buyer is thinking down. You know this time right away when you read an article where a realtor recommends "pricing it right". They now have to drive virtually potential buyers around only to get a lowball offer......wasting their gas and they're almost sure that their buyer is just going to lowball....but that have to play the game anyway. No sales......they just keep bleeding financially and try so hard to convince the sellers that they need to lower their price.......why? So they can make money for themselves....but sellers are very hesitant to lower their prices especially the amount that would actually attract true potential buyers. I see this with my Mothers neighbors house which they were finally convinced to cut $50k off the asking price.....and even though their house is much better than the house across the street(that needed a shitload of work) that sold 3 months ago for $750k, it is priced $50k less and only had 1 offer $600k....and since they are not taking that, I'm sure the next offer will be much smaller.
This bust will be the worst any realtor has ever experienced in their entire life because of the magnitude of the runup. Hopefully for themselves they were smart enough to put away their massive boom profits for the long slow dry season they face.
I think TIM's post is very true:
The trouble with this “profession†is that honest people sink and sharks thrive.
In order to flourish, you have to be able to lie with a straight face, which not many people are able to do.
This holds true for almost all sales jobs.
Whilst some realtors probably start off with an ounce of honesty, they have to lose it to stay employed.
Yes...you must convince the buyer that they must buy. Buyers will usually ask questions regarding a piece of property. I have dealt with many in my time and I always hear stuff like....."It's a great investment"....and "It will be worth alot more in a couple of years". Now...would you think a realtor would say...."this house really isn't worth what they're asking" or "Now is a bad time to buy real estate",....What would you do if they did say that? You'd say "Ok.... See ya" and nothing would be sold....they would be broke This is why our friend ScottC won't answer the question I asked, "Is there ever a bad time to buy?".
Bottom line is if you were to be an honest real estate agent, you would have an alternate job for when it truely is a bad time to buy so you don't have to lie or misinform. Real estate is a seasonal job! For those who do it as there only source of income, you can't really blame them when the market isn't good any more than you can blame a homeless man for shoplifting.
Well, we tend to see what we want to see.
...
Scott has shown through many many posts to be extremely knowledgeable about the industry, and probably knows a lot more about the ethical standards of RE agents in a rational market. But an irrational market skews the data.
_applauds_
Cheers,
prat
Realtors have no reason to exist, they are intermediators, and technology is about disintermediation. I won't use a realtor for selling my home, my wife will take the exam to get the licence and get ourselves listed at MLS. 3 of my friends get the realtor licence themselves just for pocketing the commission when selling homes themselves. Realtors don't know anything else I don't know when it comes to homes and area, they can't negotiate better than I do, what do I need them for?
Do it yourself, get a licence, it is educational for ourselves too. Pay the annual licence fee so that you get the same marketing exposure to MLS, and save yourselves tens of thousands of dollars.
@ TWIT: Do you post at Ben’s? If I may ask, under what name?
I don't much anymore. I do lurk there though. Perhaps I'll start up again. SQT, do you ever toss in with the underclass over there? Cause I'll be honest, I'm here for two reasons: the housing bubble and the chicks. And it looks like we are almost out of housing bubble.
I always enjoy your posts.
_smile_ Thank you very much.
Cheers,
prat
While we are talking about ben's, they have a nearly patrick.net epic thread going on gold/housing:
Personally, I hate gold almost as much as I hate real estate. It just sits there, arrogantly doing nothing to make anyone's life better. Mocking us. Thinking that being pretty (pshaw, as if it even *realizes* how gaudy it is) is good enough to get it through life.
Oh God I hope it asks to the prom.
Cheers,
prat
>> Engineers can “do things.†Creeptors / Realtors don’t know how to mow a lawn, fix a broken pipe, fumigate, fix a door jamb
Excuse me, may I call BS?
I know a realtor who have personally helped fixing up a house to get it ready for moving in - and I am talking about the BUYER’s agent! Helping the buyer!
Not helping the seller to get the house ready for a sale!
How many realtors does it take to screw in a light bulb?
Peter P
2005 Nov 28, 12:17am
TWIT is back!
I am under the impression that most realtors are honorable people.
Prat, my swing is falling apart!
SQT, how was your thanksgiving?
I think there is still money to be made in real estate. As ScottC claims, people will still buy and sell houses.
Problem is, it is so hard to make a sale at this time.....When you are paying money to advertise, gas, phone calls, paperwork, etc. and not making sales, it puts a drain on your finances. Some realtors have to even lower their commission just to make a sale. That is how desperate the market gets. ScottC doesn't sell real estate along the coasts.
And I asked my self why some chick from a family of three needs 7 bathrooms?
The tv crew did a fine job capturing the echoes in that house.
The other couple with the 11,000 sqft home were hilarious--and how in afterthought they wished the home was larger.
Many excellent observations posted here!
The ill advised notion of going through the motions to get a realtors lic. to complete one transaction just won't die! The same mindset for those that on-line/daytrade their own investment accounts. Subscriptions for just a few research sources can run into thousands per year (if making informed decisions is important to you). This is usually spread out over an entire client base, not the burden of one person.
Still and all, I'm the last person to rush to the defense of Realtors. Many that claim to be in the bus. for 10-15-25 years have actually been doing it "part-time" for that period. I don't want to beat this to death but I truly feel that any Realtor that has long term goals in the industry should embrace the "Crash". Get over the whole ego thing and bring value to your clients by presenting low-ball offers that will put them in a place (as buyers) where profitability is short term. Not burying them upside down where they might be stuck for 3, 5 or even 10 years before they can break even.
With friends like this who can afford foes?
How many realtors does it take to screw in a light bulb?
They don't screw light bulbs, they screw buyers.
I have to agree with Allah, I know a RE agent who helped my friends run drainage, install new windows and told them why one home was a total piece of $hit and another was overpriced. Of course this guy is a salesman and he did try to push up some houses more than others - that's his job. But he's still working. He also didn't give people the "now is the best time to buy" BS. As none of my friends or I have sold a house yet, I have no experience with selling a house.
The RE agents I hate the most are the selling agents who purposely list a house at a price way under other comps to generate a bidding war. I know a pair of women in the East Bay who did this very well in the boom cycle. I will never buy any home from this pair. I hope these two suffer in the coming dowturn.
Most of the posters and readers of this blog have never been through a real estate crash. I have. And it was a hell of a lot worse than the price depreciation we’re likely to see over the next few months.
ScottC,
I can't speak from experience about the South Texas RE crash, but I can about the CA crash in the early 90's. Nominally, prices here dropped some 21% from peak (87-88) to trough (96), and it took roughly 15 years for prices to recover to their bubble levels --just as in S. Texas.
And what makes you so sure it won't be just as bad or even worse this time? I see plenty of evidence it will be worse --prevalence of I/O neg-ams, higher estimated levels of speculation, RE constituting a greater share of job & economy, etc.
You guys are all a bunch of wussies to me.
Beware of painting with too broad a brush, Scott. Many on this board, myself, SQT, Peter P, etc., have consistently defended your right to express you opinions and have valued your input, even where we disagree.
This thread topic was obviously meant to be a bit cheeky and provocative a-la "Jealous Bitter Renters". But consider the last sentence:
Will the ethical RE agents be the one’s left standing?
ScottC Says:
"...I’d like to meet a Californian who can stand in an unairconditioned repossessed home in South Texas for 20 minutes. It’s like standing in a 120 degrees oven, while writing a list of repairs. You guys are all a bunch of wussies to me..."
I'm from San Jose, but live in Phoenix. I did live in Arlington Texas for a year and can say, hands down--especially during Monsoon season where it's both ungodly-hot and torridly-humid--Phoenix is hands down hotter than Texas.
Maybe even be hotter than hell itself!
I haven't met an honest realtor yet (and I have two of them in my family!).
btw, here's an article from CATO that might give you a different perspective on deflation.
The same greed that motivates people to buy huge McMansions, eating up our prescious natural resources because for some reason, they need 7 bathrooms is the same greed that motivates RE ... It's the American way. Everything, even a spiritual holiday, is geared toward buy, buy, buy, consume, consume, consume.
NAR report this morning: sales dropped significanly across the board. NE leads by 7.5% sept to oct. Prices are still all lower than they were this summer.
Checkout this article As Prices Cool in California Markets, Defaults Rise
from the "As Prices Cool in California Markets, Defaults Rise" article:
"As interest rates rise, we'll see an end to the price boom of the last several years," said Ms. McGee (foreclosures.com pres.). "But we won't see a price crash like we did in the 90s. The high inventory just isn't there.
Funny things people say.
“As interest rates rise, we’ll see an end to the price boom of the last several years,†said Ms. McGee (foreclosures.com pres.). “But we won’t see a price crash like we did in the 90s. The high inventory just isn’t there.
Funny things people say.
She doesn't want people to think there is a crash....only that there will be more foreclosures....she has to play two sides...if she led people to believe that there was a big crash coming, people would wait it out instead of looking for foreclosures right now. She has a vested interest to protect....remember, she runs foreclosures.com.......Alexis is a saleswoman.
Shes right though...the high inventory just isn't there.....................yet!
Shes right though…the high inventory just isn’t there…………………yet!
Well, to be right she needs to be specific enough to prove or disprove her statement. I can't be sure if she spoke about inventory in the Bay Area, LA, San Diego, or possibly some market where RE is going strong. All the same, it struck me as blissfully hopeful.
Downside Bull,
You might be interested in this thread from August:
"Strategies for profiting off of a housing bust"
Go to the main blog page, find the links on the right-hand side & click on:
Archives
August 2005
@PeterP: "Prat, my swing is falling apart!"
That is the nature of swings. My driver decided that duck-hooks off the tee were the most appropriate way to torment me, and my scores shot up 20 strokes for a month. Isn't this game grand?
@Ha Ha: "Traffic is decreasing to this blog — posting is not that fast and furious."
And thank goodness. I prefer a leisurely read after work to the all-night chugs that were going on a few months ago. It was impressive, but exhausting.
@ScottC re Texas v California.
Like, whatev. You wouldn't last five minutes in an afro-fusion-cuban-thai-vegan restaurant with absolutely *awful* Chablis and a maitre d' whose icy scorn could freeze hell. I mean, really, like he's even that cute in those chartreuse crushed velvet pants. Sooooooo last week.
ta,
prat
I’m a whiskey man.
You, my friend, are in luck. I present...
PERFECTION ITSELF: http://tinyurl.com/da446
Cheers,
prat
I prefer bourbon to Scotch, Scotch is something old ladies like to conceal in a glass of milk.
Well, old ladies and that sissy Churchill.
Cheers,
prat
There are still a few party go’ers that refuse to call it a night.
Hasn't had any effect on the millions of for-sale signs that are still blossoming like spring flowers.
...and while that is going on, have a look at the article RealtyTrac survey sees increase in foreclosures
[snip]
"New foreclosures increased in October to their highest level so far this year," said James J. Saccacio, chief executive officer of RealtyTrac. "Some of the increase can be attributed to foreclosure activity ramping up again in Louisiana and Mississippi after being disrupted by the recent hurricanes. But it's possible that increasing interest rates and other economic factors are beginning to move foreclosures closer to their historic levels."
but I have yet to meet one Californian who would stand in an unairconditioned repossessed home in South Texas for 20 minutes.
Actually, I'd prefer to sit. With a cool drink, I can weather anything short of a fire.
but I have yet to meet one Californian who would stand in an unairconditioned repossessed home in South Texas for 20 minutes.
I'm sure anyone can if there is money to be made.
I wouldn’t waste five minutes in an afro-fusion-cuban-tai-vegan restaurant. There’s no money it.
I prefer banks myself, but the food usually sucks.
Hmmm... "Last hurrah", dead cat bounce, or genuine evidence that this bubble still has legs?
/biz.yahoo.com/ap/051129/home_sales.html?.v=4
New Home Sales Hit Record Level in Oct.
Tuesday November 29, 10:09 am ET
By Martin Crutsinger, AP Economics Writer
Sales of New Homes Soar to Record Level in Oct. in What Could Be Last Hurrah for Housing Market
WASHINGTON (AP) -- Sales of new homes soared at a record pace in October in what could be a last hurrah for the booming housing market.
The Commerce Department said that sales of new single-family homes shot up by 13 percent last month, the biggest one-month gain in more than 12 years. The increase pushed sales to an all-time high seasonally adjusted annual rate of 1.42 million units.
The increase confounded analysts who had been predicting that new home sales would decline by 1.8 percent, reflecting continued increases in mortgage rates. It was possible that the unexpected surge reflected a final rush by buyers to get into the market before mortgage rates climb higher.
The rise in new home sales was accompanied by an increase in prices, with the median price increasing by 1.6 percent from September to $231,300 in October.
Same article did have a couple of caveats though:
The nationwide jump in new home sales was the one bright spot for housing last month. Sales of previously owned homes fell by 2.7 percent, the National Association of Realtors reported on Monday, and construction of new homes and apartments also fell during the month.
Re: New Homes Sales
y-o-y and broken down by region, the report tells a more interesting story:
Northeast -16.5%
Midwest -19.8%
South 27.5%
West 8.8%
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There have been no shortage of would be realtor's who have entered the housing market in recent years. We've all heard the rallying cry of "Now is the time to buy." And of course everyone's favorite, "Real Estate never goes down."
But is this the talk of a "real" RE agent, or have they become sterotyped into the used car salesman mold because of the housing mania. Did we always look at RE agents as untrustworthy or is this a new phenomenon?
What do you think will happen as the market cools and jobs dissappear? Will the ethical RE agents be the one's left standing?
#housing