patrick.net

Din, no offense taken. Please don't misunderstand viamently disagreeing with someone as lacking respect on a personal level.

Headset,

I don't want to say that "all" military types fit the bill but G.I's are USED to haggling! It's what they do all day. I'm not sure it's reasonable to expect some single mom in Des Moines to get down and negotiate with some shark realtor that does this stuff for a living? Am I wrong here.

Hi_there,

How am I doing? Any pointers that might help me get my point across like bodgering the language or other helpful tips? O.K, I'll try that. Thanks,

DinOR

Malcolm,

I get the impression you think people who rail against NAR practices are also railing against our form of capitalism. Am I correct?

I think that is it in a way. I believe the court system should determine if particular business practices violates the law. If they do you will find me right along side of you, but I'm not going to sit back and nitpick businesses I don't care for because I don't see value in their servie. I think most of them are useless and the market cleans them up.

DinOr (aka dino) says:

"And I want people to know I was outta line when I said I was going to put Malcom’s life’s work next to the…"

Gee, I thought you meant it would be in the "Library," as to read when nature calls. You know, next to the Tom Clancy novel and the Playboy.

No Boston, not at all. Some of their logic though does seem to lead down that path. My hackles instantly go up when people for instance imply that the state or society can just waltz in and start tearing down people's IP.

Boston, thanks for actually asking instead of telling me what I believe.

You know, next to the Tom Clancy novel and the Playboy.

You know, you can always listen to the Tom Clancy audio book while reading the Playboy and at the same time watching CNBC for the next investment idea.

It's not a long manuscript so you only get a few wipes.

Malcom,

No seriously, I apologize. I mean that.

Malcolm

Because the MLS is organized as a consortium of local boards, which "collaborate" (or collude depending upon your judgment of the legality) to continually skirt rulings like the one I just posted. Whenever a ruling like this hits it targets a single MLS board, not all of them in aggregate. Any attempt to address the larger organization is politically defeated by lobbies. So case-law is difficult to bring to bear in these cases, which are most often settled (as this one was).

Meanwhile many hundreds of other MLS boards out there continue on business as usual.

And agents do break MLS board covenants all the time. They will do whatever it takes to get their commission. So long as they keep a low profile, they can just violate the MLS board agreement and get away with it. But they also don't mind the anti-competitive MLS because it's a source of high-commission transactions where they are assured their counterparties will "play by the same rules".

Without IP I say we have no free market, and innovation comes to a grinding halt.

"You know, you can always listen to the Tom Clancy audio book while reading the Playboy and at the same time watching CNBC for the next investment idea. "

Would that be on the big screen in your bathroom? No sushi bar in there, too?

I only read magazines in the bathroom. No electronics other than laptops.

I can't wait for LCD paint. Your whole bathroom wall can be a photogallery.

And I thought Peter P was the imaginator of dream bathrooms

Headset,

people's circumstances differ, and their strategy of taking advantage of the housing downfall may differ too. I bought a year before you did, and I was just out of grad school. If I didn't get assistance from family on dp, I would not have had time to save enough dp to take advantage of that bottom. If I graduated 3 years earlier, and I understood the bubble as well as I do today, I would have jumped in EVEN knowing that the price might go down further, because I might just want to get into a particular neighborhood at a semi-bargain price while I could still borrow, and I expected my pay to rapidly increase afterwards.

Therefore, I don't think there is an one-size-fits-all strategy for everyone. Someone may buy before it bottoms, and he knows it, someone may just wait for the perceived bottom. There are many reasons why one can't come up with a dp, and I don't want to speculate on it. If someone doesn't think for whatever circumstances he can come up with enough dp, then getting in just before the bank closes its door is not a bad thing.

Another consideration is the weakening of the dollar. I have more than enough to pay off my mortgage balance, but I choose not to, because I can make higher return on my savings than sinking it into a dollar-denominated loan that will only get cheaper to pay off as dollar tanks. Therefore, if you know what you are doing, acquiring a dollar-denominated loan and locking the rates down is the right thing to do, provided that you have that amount of money to begin with, and you can shift your own money to more lucrative uses. Money will one day get much more expensive, if there's some way that you can lock down the cheap rates of today and profit from money getting expensive in the future, why not?

I don't think one can universally determine if debt is bad (tax shield, arbitrage, dumb people pricing risk badly so that you get a good deal). Debt is a good thing if you know how to take advantage of it. Apart from FBs, there are also people who strategically get into debt as a financial tool to profit, and right now the window for getting ridiculously cheap debt is still open, that is all I am saying.

I only read magazines in the bathroom. No electronics other than laptops.

Probably smart from an electrocution standpoint.

Excellent debate, BTW to all.

You're very welcome. My observation is that almost everyone is remarkably considerate on this board.

Randy H,

Exactly, b/c MLS can provide a "base level" for some very good commissions they tolerate the rules just enough to keep from getting the boot.

And as much as it pains me to admit it, Malcom is correct that NO industry operates efficiently when the least significant player dictates the terms by which the game will be played.

After what's been said today, I doubt I can meaningfully contribute to the debate. However, here's an interesting link:

http://www.ftc.gov/opp/workshops/comprealestate/index.shtm

Click on the "Workshop Transcript" link if interested. It's hefty, but seems like (on cursory pass-through) a very interesting and relevant read.

And now in this group hug, I have to say that you guys have solid points about MLS business practices.

Whether MLS is a monopoly doesn't matter, in this world we are moving to more transparent information. Realtors need to show me apart from MLS data what other service they can provide, and what they can provide won't overlap with other alternatives I have (researching on the internet, advertising on craigslist, attorney, etc.).

If realtors cannot come up with a distinctive raison d'etre, they will become extinct fairly soon, or their commission structure will change drastically.

In both Japan and Hong Kong, after the bust, the realtor's commission structure came down significantly. In Hong Kong, for example, when I was growing up, BOTH buyer and seller used to pay realtors 2-2.5% for the transaction amount. Now, the standard has become 1%, and you can easily negotiate it down to .5%, in a buyer's market, the buyer doesn't need to pay, in the seller's market, the seller doesn't need to pay.

RE: the link I referred to, pages 263-267 of the meeting transcript are useful summaries from the FTC/DOJ representative at this meeting. I have to manually retype the PDF, so here's a brief excerpt (sorry about any typos):

*****

“Coming from and enforcer’s perspective, I believe that the single overarching story line of our program for many years probably has been this: From time to time conventional, full-price brokers have taken collective action to disadvantage innovative, reduced-service, lower-priced brokers. The particular actions that they have taken have changed over time, but the same intent resurfaces…

Dating back to the late 1980s and early 1990s, we brought cases involving local MLSs that were refusing to list houses that were being sold under “exclusive agency” contracts, or were treating such listings on disadvantatgeous terms. The underlying MLS rules were a form of private agreement, and we thought the agreements were anti-competitive on that particular point."

I have one modest request: when you use an acronym that can be translated multiple ways, please define it at least once.

Ex: is "IP" "internet protocol", "information provider" or "intellectual property"?

When there are no buyers around, all anti-competitive measures will just break down. The only reason why they are able to play the dirty games they play today is because there are too many buyers with too much cash flowing around.

If you leave an organized group of wolves to themselves with absolutely nothing to feed on, they will start chewing each other up.

OO,

Good analogy! I think we're already seeing that in markets like LV where buyers have cleared out faster than you can say "free buffet"!

It just seemed so bizarre b/c in an era of increasing transparency and ever better technology, NAR declared "full speed astern!" Thanks for taking a "little" of that frustration out of the equation for me.

Does anyone know the current status of the housing market in Atherton? A friend is going to list her house in Atherton next week. The realtor told her most places are going over asking, $500k or more over asking. I see 28 homes listed, with 2 sale pending. Just curious...it's not a market I track at all.

OO,

It's not just an over-supply of buyers. Aside from any anti-competitive underpinnings of the NAR, there is the issue of fear factor in the buyer and seller. Of course, it sounds like a great thing for discount brokers, FSBO and the like to gain traction, but when it comes down to brass tacks, most buyers and sellers will go to an agent. They fear being screwed by not using an agent to advocate for them in the RE transaction.

Whether or not this advocacy is needed, this psychology clearly exists. As a result, discount brokers and dissolution of the MLS as we know it will be long in coming, but when it does, it will accelerate and transform very quickly as the mass psychology changes, IMO.

Hum! Prices down 8% in 30 days.

http://www.housingtracker.net/askingprices/California/SanJose-Sunnyvale-SantaClara/

Hum! Prices down 8% in 30 days.

Ur... I believe this was due to the apparent data glitch on 03/19/2007. Check out the inventory and/or price data on that day.

Here is a great story of obsolescence. My friend goes and gets his real estate license. His neighbor across the street is also a real estate agent. Another neighbor on the street decides to sell his house. He asks the more experienced realtor
"hey I want to sell my house can you make a deal with me?"

The agent says "I'm not doing anyone any favors."

So my friend gets the listing, and the other agent is left watching a newbie walk in and make $7,000 which would have been easy money. That was just the listing side.

skibum,

You would think so wouldn't you? Maybe full service brokers were telling buyers that these discounters had gone out (or would soon go out) of business? In 2005 alone $60,000,000,000 in commissions were generated by NAR.

(I'll bet there are a lot of people that wish they could have some of that back now!)

We are heading into some bad times.

The US dollar situation is disturbing.

We need a rate hike. Fed rate should be in the 6% range at the minimum.

We are heading into some bad times.

We as in conservative people.

No boundaries. The economy is going to suck this year. I see all sorts of commercial for lease signs. I think this housing situation is really going to be a big burp for the economy. I am really encouraged by the thought of getting off of foreign oil though, that will help loads.

GC, normally anything which increases costs on the providers of a commodity results in corresponding price increases.

www.USHomeAuction.com
S. Calif auction coming up for 300 foreclosed homes

No but being a former landlord I can just help with the concept. Even the landlords with fixed costs enjoy a movement like interest rates because competitors have to react to them so the price moves accordingly. Also lines of credit are affected.