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Evil Buyers Display Extreme Cruelty to Distressed Sellers
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2007 Apr 17, 5:43am 34,315 views 547 comments
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My wife always some real mice for our cats as toys. But that would be too cruel. And too messy.
As Georgie says "that's not food, if it were it would be in my bowl"
Georgie has no desire to catch mice, Georgie is a very lazy cat.
sfbubblebuyer
2007 Apr 17, 8:32am
SP,
I meant to imply that checks got smaller as well as less frequent in the "commission checks coming down" remarks. :)
If buyers sense that prices will start falling, they will wait for lower prices. Which means n_o_b_o_d_y g_e_t_s p_a_i_d. This is the real reason that realtwhores and everyone else who benefits from the transaction (at the buyers’ expense) will do ANYTHING to hide the fact that prices are going down.
This is the buyer-seller standoff problem that's been brought up before. At some point, if buyers do not capitulate, the Realtors (TM) will turn to the sellers and ask, nay, beg them to lower their prices in order to get a sale.
I don't think we're close to that point in the "prime" Bay Area yet.
SpaceAce,
Thanks for the stats. Not to sound almost RE bullish, but one could argue prices in 1996 were below the historical trend for Bay Area housing prices, so the numbers are skewed low.
Either way, point well taken - there's potentially a lot of room for prices to fall. I still think the key is jobs/economy. Once the stupor from the Web 2.0 "the tech bubble is back" BS wears off, that will be the time point we're talking about. In turn, that relates to how much money continues to get pumped into the startups and larger public tech firms, which in turn depends on the overall economy. In that regard, the cracks are already starting to show...
HeadSet Says:
> Savers now get the chance to be evil.
> I’m going to lowball big time, and of course
> be turned down.
> Then when the house is still unsold months
> later, I will get a call seeing if I’m still interested.
You will get the call earlier if you give some friends the chance to be “evil†and offer even lower than your lowball offer (make sure they mention every bad thing about the house to sellers to plant the seed that they own a dump in a bad school district)…
"I still think the key is jobs/economy."
My point exactly, when did you ever see a BA economy that raised prices.
Not in my lifetime living in the BA. Detroit raised the price of Mustrang from 2500 first year to what today.. $20,000 or so. First PC was around $10,000 now down to $500 for laptop.
We dont have the pricing leverge to pay for employees high salaries and their bubbly homes. More recently, we had more acquisitions and mergers, employees loosing jobs than new start up going public (raising capital hiring new employees and expanding).
Thanks for the stats. Not to sound almost RE bullish, but one could argue prices in 1996 were below the historical trend for Bay Area housing prices, so the numbers are skewed low.
To make up for that, assuming 5% appreciation a year, $300k would be about $513k a year today.
DinOR Says "Now those are median prices in Minnesota."
Bear in Mind prices in New Jersey were the same as prices in SF South Bay. Yes they had snow in NJ while CA suffered a draught. That was back in 1976-79. Point being CA prices were no different than other parts of the nation. The stupid notion your paying for sunside was indeed stupid.
Randy H
2007 Apr 17, 9:08am
What FAB is referring to is framing. If you can get a collaborator to really do this it is *extremely* powerful int he seller's psyche. It turns them around from perceiving your $250K under asking offer as a quarter million dollar _loss_ to instead seeing your $50K over the last offer as a _gain_.
There are two problems:
1. Many sellers have a disgust barrier. Breaking their mental accounting through that barrier is the very definition of stickiness. It's hard to do. Many many sellers will say f-u to the first offer and just pull their listing if your second lowball comes in.
2. Getting a collaborator isn't easy. It's a *lot* of work for them. They have to be credible, which probably means they don't already have a house. They have to get pre-approved, make a earnest deposit, and make it look real. That always means there's a very small chance they end up with the house, also. (Of course then they could figure out somehow to let you take over the offer I suppose, but it would be messy).
Peter P
2007 Apr 17, 9:10am
What FAB is referring to is framing. If you can get a collaborator to really do this it is *extremely* powerful int he seller’s psyche.
Framing is a very interesting topic. Beyond Greed and Fear has some good discussion on it. Perception is everything.
An average 2000 sq ft TH I seen in 1997
was fetching for under $200K. Add 5%YoY
appreciation.
1997 200,000
1998 210,000
1999 220,500
2000 231,525
2001 243,101
2002 255,256
2003 268,019
2004 281,420
2005 295,491
2006 310,266
2007 325,779
That Same TH now is listed at $660K
Needless to say a 50% decline would
get you back to normal trend. You can
factor in Rent vs own and Income to price
you pretty much get back to LT averages.
2. Getting a collaborator isn’t easy. It’s a *lot* of work for them. They have to be credible, which probably means they don’t already have a house. They have to get pre-approved, make a earnest deposit, and make it look real. That always means there’s a very small chance they end up with the house, also. (Of course then they could figure out somehow to let you take over the offer I suppose, but it would be messy).
Oh... I don't know. I imagine you could find a *few* willing parties like that on this blog (_whistles innocently, rolls eyes skyward_).
"To make up for that, assuming 5% appreciation a year, $300k would be about $513k a year today."
That would be Marin County in 1997. The only place where med prices were $300K. And I agree for today $500K for Marin county sounds reasonable, along with LAH, Woodside, Saratoga, a few others.
surfer x,
if no-down is your requirement, then you'd better get your foot in before the door is slammed. The lending requirements are changing very rapidly up here in BA, I was told by a friend who is in the middle of refinancing that his lender told him that he couldn't qualify for the full-doc rate, while 3 months ago this was not a problem at all.
If you think that you can save up $60K in the next 3-5 years, then you probably should hold off. I don't know about Ventura, but this is just the beginning of the housing bust. It will go much deeper than people expect because when a bubble of this scale deflates, the market will tend to overreact the other way. It doesn't sound like you and Mrs. X are the quality-of-life buffs who demand a nice home so that she can do some interior deco.
However, the upside of getting in right now is, in the worst scenario, you put nothing down, and can always walk under anti-deficiency protection, while saving some tax in the mean time.
Surfer-x serves as an important data point for the housing bubble. One more potential buyer caved in. I think Randy is going to buy soon because of QOL considerations.
I will use FAB as a yardstick for buying. When he buys, then we have hit the bottom and I can follow suit :-)
sfbubblebuyer
2007 Apr 17, 9:38am
Here's what 300k will get you these days.
It's a shame it has no picture.
Los Gatos Hills, in the middle of nowhere, a 680 sq ft 2/2 bungalow on 3100 sq ft of lot.
Awww, yah!
HARM,
In a heartbeat! Do people still get "pre-qualified" before putting in offers? I remember a time when realtwhores wanted to make sure you were pre-qual'd before they even drove you around! With as much as the deck has been stacked against the buyer the last decade I can't imagine any guilt over doing that!
SFBB,
that is not Los Gatos Hills, that is Los Gatos Mountains, very different concept. Los Gatos Hills refers to the Shannon road, Kennedy road area, or the Monte Sereno foothills with multi-million dollar mansions, the creme de la creme.
Los Gatos Mountains = Santa Cruz Mountains, most of which is sitting right on TOP of the major fault line. Many of those houses in the LG Mountains were built without proper codes. LG mountains is where the people in the valley used to have their vacation cabins.
Peter P
2007 Apr 17, 9:45am
I will use FAB as a yardstick for buying.
I am using my friend as a yardstick. She usually has good luck with big purchases. I need to borrow some luck from her. :)
sfbubblebuyer
2007 Apr 17, 9:46am
My bad. I meant mountains. :D
Nothing like living on a fault line in a shack for 300k!
edog,
I'm no huge fan of Zillow either. It shows the home I sold in DEC 2003 currently valued at $899,990 (kidding). They're so grossly inaccurate I can't imagine anyone getting bent out of shape about it? Besides who are appraise-whores to bitch! Oh they were a bunch of altar boys during this whole thing.
Getting a collaborator isn't that difficult, have your parents do it. Sign an agreement beforehand so that there are no tax implications, and then have parents from the wife's side collaborate (if your wife has changed her last name, that is).
"LG mountains is where the people in the valley used to have their vacation cabins. "
"Nothing like living on a fault line in a shack for 300k!"
Yes... LG ...Santa Cruz Mts back in the day listed for around $125K or so. Do it yourself Septic tank and propane! Dont forget the forest fires! Did i mention propane tanks!
" I just take the 10 year graph off of Zillow and fit it with a line and thats what it “should†be now."
Did the same after the recession and plotted the S&P bottom I got into the market spot on, never had a single regret catching the bottom. This is a Peter Lynch theory at play. Im doing the same with home puchase.
Space Ace,
where do you target in BA since you've been here so long? Anywhere in the South Bay with a high intrinsic value?
DinOR, zillow used to be a bit out of line in the Ventura area, but I have found lately that most of the recent sales have been within 5k of the "zestimate". Going thru the realtor dance is fascinating, what a bunch of shills, they are just information hiders, nothing more, nothing less. An open MLS and more accurate zillow and they are out of business.
"lets fee them". and so it was law
Tuesday afternoon cat and mouse blogging...I like where this is going.
Peter P
2007 Apr 17, 10:03am
Tuesday afternoon cat and mouse blogging…I like where this is going.
Remember, Friday is the cat-blogging day.
What is the best way to remove loose fur from a cat?
A cat brush. tinyurl.com/34y9ut
It's Georgie approved. Just be sure to give the wrist a slight flick when exiting the cat. It gets the underfur. Don't be shy, press down hard, they like it.
HeadSet
2007 Apr 17, 10:12am
"if no-down is your requirement, then you’d better get your foot in before the door is slammed."
Yipe! It sounds like you just gave Reators their next pitch:
"Better buy now, even as prices are falling. Why? Because if you delay, loan tightening will shut you out forever!"
Peter P
2007 Apr 17, 10:12am
A cat brush.
Cool. We have several brushes but one cat is very picky.
Peter P
2007 Apr 17, 10:14am
SP, certain types of luck tend to stick around, unless a person throws them away.
Peter P
2007 Apr 17, 10:14am
Because if you delay, loan tightening will shut you out forever!
LOL!
HeadSet
2007 Apr 17, 10:19am
British "Estate Agents" have been making due with 1% commissions for some time now. Full service also, including ads and driving around buyers.
SP Says:
I have a colleague who was at Sun from ‘95 to ‘98, then at Yahoo from ‘98 to ‘04 and now at Google since ‘04, just pre-IPO. I am keeping a very close eye on where she goes next, so I can follow - and am hoping her luck holds for one more move.
I would skip your friend and follow where this guys is going... "Midas Man"
He is miles ahead of everone. The rest of the crue arnt bad either
We have several brushes but one cat is very picky.
Georgie is a very crabby tabby, she looks just like the cat in the picture above. Once the brush comes out, she auto-purrs. I did not know that auto-purr* was possible.
*auto-purr: spontaneous purring without actual contact from human slave.
Peter P
2007 Apr 17, 10:22am
RE: British “Estate Agentsâ€
Even those with double-oh designations?
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Sadistic, Greedy Buyers Toying with Sellers Like Cats with Prey*
Copyright © 2007 UnReality Times®. All Rights Reserved.
by David Lereah, Leslie Appleton-Young and John Karevoll
As the alleged real estate bear market enters its second year of hitting bottom, some buyers out there are clearly enjoying this one-time market aberration --perhaps a little too much. Is deriving sadistic glee from other peoples' suffering a nice thing to do? The Germans have a word for this: schadenfreude (and we all know what cruelty the Germans are capable of!).
According to Donald Parisi, president of the Realtor Association of the Fox Valley (IL), buyer cruelty is reaching grotesque proportions:
This view is further clarified by Jim Fox, manager of Realty One in Canton, Ohio:
Even more to the point than Mr. Parisi, Florida Realtorâ„¢ Becky Troutt gets right to the heart of the matter:
Now, that's telling 'em like it is, Becky!
While the unbridled greed and glee exhibited by these sadistic buyers (and the American Dreamâ„¢-hating press) are stomach-turning awful, they are not the primary causes of this upside-down market. The real culprit for this most unnatural and unhealthy market condition, is well understood in the industry:
Clearly what's needed here is massive government intervention to protect homeowners and rekindle the normal 20%/year appreciation. This might take the form of a distressed homeowner mortgage buy-down, or federal underwriting for all the kindhearted subprime lenders who generously enabled low-income Americans participate in the American Dreamâ„¢ (often mischaracterized by Gloom'n'Doomers as a "bailout").
To proactively tackle this looming crisis, the NAR and CAR have teamed up with the MBAA (Mortgage Bankers Association of America) to sponsor the Save the American Dreamâ„¢ Act of 2007. Says NAR Chief Economist, David Lereah, "We are urging people to sign our online petition, and write, call, email and beg their Senators and Congresspersons to support this badly needed piece of mercy legislation. Home ownership is as American as apple pie --only you (and Uncle Sam) have the power to save it! Please do your patriotic duty and support the SADA. God bless."
[*Note: while the offset quotes and links are real, this 'article' is a parody]
#housing