patrick.net

LOL. I was being sarcastic.

The seller and buyer should exchange information only as it pertains to: 1. the property in question, and 2. the financing of the deal. That information must be fully transparent and independently verified. The rest of the "data" is nobody's business.

By the say.. did anyone catch the San Jose Merc Sat Edition RE Section.
There was a graph on page 4 ....
For July 07 it shows 36 percent of homes are selling above asking....
the peak in 2005 showed nealy 60 perc selling above asking.

Hum... makes you think twice regarding the the Multiple offers the realtors are crowing about. .... yet the med is still screwed up.

OK I understand Brand...

StuckInBA- I like to buy the lady a drink... she is actually advocating putting more inventory on the market. If 8% of x is selling .... hardly think more homes will help prices...

Oh well ... we all know realtors arent that bright anyway.

"How serious am I? From 2005 to 2006 we lost 13% value. From August 2006 until now we’ve lost another 18%! Many of you have lost more than $100,000 and it’s getting worse."

Turn on evil Buyer mode....well honey someone will save 100K... and if they wait and see say 20% decline... that makes my day... but hey...
we saw prices increase 3-4x over 9 years so why not another double digit ..... bahahahahah!

I feel so much like Smiley Whip Lash!

How you finance the deal is always available to the Seller. In fact, after you close it is available as a matter of public record. Of course your own personal financial position isn't, but the transaction is.

As a Seller I can reject you (or select a different bid in a multiple situation) purely based upon your financing. It is relevant to the risk of failing to close, and unless you are willing to mitigate that risk by providing more information, I can discriminate based upon how you structure your purchase.

I have been on both sides of this. We selected 2nd highest bid on our 2002 sale because they had a conforming loan with 35% some percent down. We had a Seller renege on our contract because he got a late all-cash offer for almost $100K less than our offer, but he wanted out fast (he was a builder/renovator). We had a jumbo with only about 40% down.

I'm with svcausguy in agreeing that the perhaps most important and currently lacking aspect of transparency is related to the closed and non-public nature of the bidding process.

Overall, I think the most important aspects of transparency are

1. listing transparency
2. bidding transparency
3. sale transparency
4. financing transparency (information about the seller)
5. related-party transactions disclosure (in roughly the Sarb-Ox sense)

If the data pertaining to the above items are openly available in a timely fashion, it goes a long way to take the guesswork and intentional misrepresentations out of the housing transactions. It should of course be a federal crime to submit fake bids or forged data. Non-arms-length bids by associates or industry insiders must be disclosed.

I'm not real keen on the use or dissemination of personal financial data. And I don't think it is really needed to create an orderly market. On the other hand, such data is often available to industry insiders and would create an unfair advantage if not publicized.

Having said all this, I still cannot help but feel that we should perhaps be careful what we wish for. I can only imagine how the exploitation-crazed Palo Alto soccer moms would go wild with all the data and create a new bubble all by themselves (1/2 ;)).

Was not the stock market bubble in the late 90s fueled in part by online brokering and online instant data availability? And is not the internet access to MLS data partly to blame for turning real-estate speculation into a national pasttime?

Hate to be the bearer of bad rumours, but the jungle telegraph is saying Bernanke is going to do something more tomorrow to prop up the financial sector. The banks have served notice that they can't keep up with the maturing repo obligations.

Exactly what he will do is the subject of much speculation. Monkeys on tv are chattering about a rate cut, others are saying it will be less public than that.

SP

Needless to say, none of that was investment advice. Just rumours.

SP

Brand,

buying and selling a house is a business, and as in all business matters, you dig up as much information as possible on the other party to up your leverage. As long as the information is obtained and passed around legally, whoever that has his research skills sharpened the best will have an upper hand. Why do we need store ratings? Why do we need user ratings on ebay? How a store treats its other customers doesn't necessarily translates into the way that it treats you. If all the potential buyers know that the seller took on a suicide loan which is about to reset in 3 months, why would anyone make an offer now? Buyers should all hold off until 3 months later. However, if all the buyers can take advantage of the seller like such, the seller should have never bitten off more than he can chew to begin with, and we would all be living in a better world.

I am for all the transparency that an aggregator can offer, for a fee.

Mjdundon,

I liked also your idea on reporting requirements and procedures. But again, it could add fuel to the fire. I can see the ECPASM (loc cit) going wild with it.

hmm, interesting:

http://en.wikipedia.org/wiki/Panic_of_1837

The banking panic of 1837 was followed by exceedingly disturbed economic conditions and a long contraction to 1843 that was interrupted only by a brief recovery from 1838 to 1839. This Great Depression is particularly interesting for our purposes. It is the only depression on record comparable in severity and scope to the Great Depression of the 1930's, and its monetary concomitants largely duplicate those of its later mate. In both, a substantial fraction of the banks in the United States went out of existence through suspension or merger --around one quarter in the earlier and over one-third in the later contraction--and the stock of money fell by about one-third. There is no other contraction that even closely approaches this dismal record. In both cases, erratic or unwise governmental policy with respect to money played an important part.

(Much as I hate quoting) Milton Friedman

Thanks SP.

I don't really support the reporting scheme I mentioned at present. I, too, would have to be convinced that lack of accurate sales information was a substantial cause of bad market behavior before I would like to see a big new regulation imposed -- and as I suggested I think rather the contrary is true. People had a correct knowledge of, but unwise interpretation of, market conditions, and an unrealistic projections as to future market trends (in both credit and home prices).

As much as I'd love to take credit for "re-buying your house" I know for a fact that little gem was Surfer X's. However... it's a concept I hardily endorse! I agree with SP that in effect if you haven't taken cash out, yes, it is just sound financial planning in a decreasing int. rate environment. I will go on to say though (as long as you haven't re-set the term). If you've set the clock back to a NEW 30 year obligation... "I" believe you have in effect "re-purchased" your home. That's just me.

"buying and selling a house is a business"

With the "high stakes" in play these days I can see how people would get that impression. Perhaps that's what this thread is more about? Not so much about transparency, but IS... selling "your private single family primary residence" a business? When we break down each word within the quotation marks individually most of us would answer with an emphatic NO!

But that isn't the reality.

Peter P,

I wish! I leave for Iceland on Wednesday, but a month long visit to Scandinavia would be nice!

AP
U.S. Foreclosures Rise Sharply in July
Tuesday August 21, 8:19 am ET
By Alex Veiga, AP Business Writer
U.S. Foreclosures Rise Sharply in July With Nev., Ga. and Mich. Accounting for Highest Rates

LOS ANGELES (AP) -- Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Nevada, Georgia and Michigan accounting for the highest foreclosure rates nationwide, a research firm said Tuesday.

The filings include default notices, auction sale notices and bank repossessions. The figures are the latest measure of the ailing housing market, which has seen defaults and foreclosures soar as financially strapped borrowers have failed to make payments or find buyers.

In all, 179,599 foreclosure filings were reported during July, up from 92,845 in the year-ago month, according to Irvine-based RealtyTrac Inc.

A total of 164,644 foreclosure filings were reported in June.

The national foreclosure rate in July was one filing for every 693 households, the firm said.

What asset class will perform best over the next 12 months?

Cash 20%
Stocks 50%
Bonds 13%
Commodities 13%

REITs 6%

54529 Votes to date

Patrick posted a great article by Barbara Ehrenreich (author of "Nickel'd and Dimed") called "Smashing Capitalism" that really hits home. Of course she puts her focus on the min. wage crowd but it's not a stretch to see the same impacts on middle class people.

Most FB's we know that are facing down some pretty ugly financial circumstances aren't there b/c of pay-day loans and "Rent2Own" schemes, but the principles are the same. We couldn't afford our living expenses... so we financed them! The difference is though (and I wish she would amplify on this) is that as long as our homes were "appreciating" we were o.k with stagnant wages and eroding benefits.

SP, could this be what you were referring to?

Effective immediately, the Federal Reserve Bank of New York’s Open Market Trading Desk is making the following temporary change to the System Open Market Account (“SOMA”) securities lending program:

The minimum fee rate is decreased to 0.50 percent from 1.00 percent. All other program terms remain unchanged.

OO had a brilliant point in that these are the critical things to know about the seller:

1) Owner loan terms (toxic loan? When is the reset date?)
2) Owner name (so that I can do a background check on him)

Owner name should be public record, but how can anyone legally find out the loan terms for a given property?

It would be great to know who's swimming naked even before the tide goes out completely.

Patrick

We need transparency via a free and independent and functioning media to be an actual democracy and functioning capitalist society. Obviously we didn't have that in the past six or so years with regard to either politics or the real estate market.

Interestingly, this was from Saturday:
http://youtube.com/watch?v=D1R3ztkL5-c
Apparently, if you are concerned about the US economy you are a 'lefty' and 'anti-American'.

Monday I was driving back to SF from Oregon listening to Sirius radio. Literally every news or talk channel except Fox was talking about the liquidity and mortgage meltdown in the US and the coming repercussions in the real estate market. I finally turned to an alternative/punk station and sang along to the Ramones back to the city.

"great to know who's swimming naked"

Not surprisingly this information is traded like a commodity amongst REIC insiders. Mortgage brokers get "comp'd" for throwing business at title companies in exchange for loan information. "Give me all your 2/28 ARM's from 2005 for Zip Code 97XXX and I'll throw the closes your way!"

Just another "perk" for the cartel.

You can see everything you need about loan terms in PropertyShark, etc. Brokers can do title searches if you can find one who has access. I don't think you can get the specifics of the loan like the rate. But you can see the amount, if there are additional loans, and whether the rate is fixed or variable, whether the loan is standard, and if the loan is conforming.

Why do you need anything else beyond that? Like someone else pointed out earlier, you can make a lot of guesses about the seller. But in the end you don't really know what their situation is financially. I have a friend who lives in Strawberry. Their title documents will show you they are major league FBs with a couple million in debt on multiple variable loans. If you were buying their listing you'd be tempted to think they'll cave once their ARMs reset. What you don't know about them is that the husband father is a very wealthy retired law partner of some dated notoriety back east, and there is effectively 0% chance they'll default -- they'll just keep taking daddy money.

SFWoman

I finally turned to an alternative/punk station and sang along to the Ramones back to the city.

Hopefully not on 1st Wave. I hate that station (except on Sunday nights).

Patrick,

I just looked up a neighbor a few blocks away on PropertyShark (I signed up for the free service) and found that he bought his place in 1995 for $1.3 million, his wife is not on the deed, and has a $1,040,000 loan though Citibank that is listed as variable and as conventional.

It seems like a fair amount of information.

Randy,

I think that was it. I had never heard that station before and was actually delighted to hear songs I hadn't heard in 20 years! I guess you won't want to be taking road trips with me? I do sing out loud.

SFWoman

Better me, yours, than you suffer my singing. You'd be desperately fumbling for the techno trance channel (which is impossible to sing to).

I’m not real keen on the use or dissemination of personal financial data. And I don’t think it is really needed to create an orderly market. On the other hand, such data is often available to industry insiders and would create an unfair advantage if not publicized.

BINGO: Give that man a cigar!

The fact that industry insiders --and elite well connected buyers/sellers-- trade and negotiate all the time based on such supposedly "private" information makes it imperative that the rest of us get our hands on as much of it as we can for our own best interests.

Personally, as a guy who likes the concept of having some reasonable privacy protections, I'd prefer regulations that delineate exactly what IS and is NOT 'fair game' to share and forces REIC insiders stick to it under credible threat of prosecution. Until such time, it's not about "fairness" or "privacy". It's about me not getting screwed by information asymmetry --by people who know more about what I ate for dinner last night than I do about how they financed the house on which I've submitted an offer.

Financial "privacy" should apply equally BOTH WAYS or be abolished.

As the Great DinOR just said:

“great to know who’s swimming naked”

Just another “perk” for the cartel.

As much as I’d love to take credit for “re-buying your house” I know for a fact that little gem was Surfer X’s.

Oops, sorry X. I've seen this gem re-used so many times I forgot who originally coined it.

I finally turned to an alternative/punk station and sang along to the Ramones back to the city.

I hope the song was "I wanna be sedated." Seems appropriate for the current market upheaval.

HARM,

As we've all repeated time and time again, information is a commodity in many transactions, RE transactions included. You basically go to a lawyer, doctor, accountant, plumber, car mechanic because they possess knowledge about a specialized area you don't have. The Realtor (TM) wants to give the impression of having that special knowledge, like neighborhood values, comps, school districts, etc., but that's artificial, particularly in this day and age of Property Shark, zillow, etc. (although zestimates leave a lot to be desired).

That's why the Realtors are so f'ing desperate to hold onto that false aura of having information and skill you the consumer do not have. The truth is, they have become nothing more than middlemen and gophers. Their cartel has been keeping their system alive for much longer than it should have been. We should'a pulled the plug long ago.

@skibum,

Amen, brother.

Has anyone else seen the latest? Chris Dodd (Sen, CT, Dem) is trying to strongarm Bendover Ben into using ' "all of the tools at his disposal'' to restore stability in financial markets roiled by the subprime mortgage crisis.'

Bernanke is truly bending over for that doofus Dodd. Not that I would have ever voted for Dodd, a total hypocritical populist "common man" advocate, but that pretty much seals the deal for me. That toolbag should be taken out back and beaten with a large stick.

Congress will try to weaken the Fed independence. All those who have criticized the Fed as some "private" bank that controls the fate of millions may come to regret the US under a Congressionally controlled monetary policy. Imagine a world where inflation spikes into the high teens the year before every major election.

"We had a Seller renege on our contract because he got a late all-cash offer for almost $100K less than our offer"

I hope that the loan fallout will allow cash to speak so loudly again

I wish! I leave for Iceland on Wednesday, but a month long visit to Scandinavia would be nice!

Sorry... I somehow thought Finland = Iceland. Temporary insanity on my part. :)