patrick.net

bc,

What did you get access to as a realtor that's not available to civilians via realtor.com or ziprealty?

HARM,

at least in British Columbia, what bc said would also apply - that is, most realtors are "salespersons" who work for "brokers". The broker has the license that allows the office to operate, the realtor has the sub-license that allows him to handle transactions.

Yes, expect to give 50% of the total gross commission you are entitled to earn to the "broker"/office.

What this means is, in order to live la vida loca, if you figure on an even split between the buying/selling agents, you need to be involved in $2,000,000 worth of transactions a year to clear $30,000. Or, to make the big money and rake in $120,000/yr, you would need to be involved in around $8,000,000 a year of transactions.

If you can get that kind of volume as a listing salesperson and manage to sell without getting a buying agent involved, you have hit the gold mine.

As you can see from the numbers above, in a falling market, it is going to get very difficult very fast for large numbers of realtors to make money, because no matter what the prices are, falling volume is poison to real estate compensation for the industry as a whole.

On the other hand, some brokers are going to benefit greatly from an uptick in foreclosure activity - but those will be the brokers, not the bottom feeding salespersons, by and large.

On a side note, I took and passed the British Columbia pre-licensing/sub mortgage course back in 1997. Very educational. I made the mistake of trying to get involved in the mortgage business during the last down market, without significant cash reserves to fall back on. A lot of realtors (say 50%) are about to find out the hard way that the good times do not last.

Hope they've been saving some of their green!

HARM,

Given the time, cost, and annoyance of having to go through getting a sales & broker license, joining a MLS board and paying their fees, and joining a local association and paying their fees...

Wouldn't it be better and more cost efficient to just find a seller (most probably with a selling agent), and then cut the buying agent's estimated fees off of the price and negotiate directly with seller/seller's agent via a personal RE attorney?

If it does become a hard-landing then I will follow that strategy. In a soft-landing, maybe your approach is better.

My understanding is that in excess of $60 billion was paid out to realtors in the form of commissions last year. However; the avg. realtor's income went down! With all of that "easy money" floating around it's bound to attract the "I was looking for a career change anyway" crowd. However; if you were in a field that might create a "natural market" for yourself like local insurance agent where you had already earned people's trust it might be a nice fit.

That is....... after the bubble implodes and all the flakes and posers have been run off! Rest assured that many of these folks will be long gone before we even flirt with the "bottom". Volumes (the life blood for realtors) are already drying up.

I think you'd learn more and have more fun moonlighting at Home Depot. With wage + employee discount on fixins for your new house, you'd probably earn/save about the same money and have a better long term knowledge return on the time spent.

@DinOR and Tsusiat,

I thought I'd made it clear in the thread intro (and hopefully funny as well), but I'm not looking to go into the Realtor biz --I just want access to the MLS and "insider" info for my own benefit as a buyer, plus to cut out the buyer's agent/broker from the equation.

As astrid & Randy H pointed out, this may not even be necessary, given the MLS's diminishing control over listings and the option of using a good RE attorney in lieu of a buyer's agent. Even so --as bc pointed out-- it certainly cannot hurt to have an agent's license from a consumer self-advocate POV, especially while they're so easy to get.

Speaking of good RE attorneys (representing the buyer), what's the best way to find one in your area?

HARM -

I could tell the tongue was planted firmly in cheek, just thought I'd point out how difficult it is to make the "big money". A lot of people go into real estate without even realizing they are deluded about receiving 6-7% of each transaction.

HARM,

Thanks and don't think for a minute that you or practically anyone else that posts here would seriously ever consider being a realtor! If someone here though feels an uncontrollable "urge to sit for the exam" (all 10 questionsof it) just contact me through the "normal channels" and I'll send in the "retention prevention committee". 100% guaranteed.

Speaking of good RE attorneys (representing the buyer), what’s the best way to find one in your area?

Referrals. If you know anyone you trust who has rental-income RE, they'll probably know some good RE attorneys.

By the way, unrelated to the current thread, has anyone else noticed the sheer numbers of California bubble blogs? There must be 100's of them! Half of them are from the BA. I just did a search yesterday because I was curious, and the numbers compared to just a year ago are phenominal. I take this as a good thing. It can only mean that the top was reached a while ago, and all the people left out are PISSED, want changes, or want some sort of assurance that there's tons of others in their same predictment. They seem to carry the same themes as this one- people that sold and rent, renters who are priced out, and people who are planning on leaving the state. The last group of people seemed to be signifigant too.. not great to hear forme anyhow.

It was Abe Lincoln who said: "A man who represents himself has a fool for a client"...

As I have mentioned before listing agents will do everything in their power to sell a home without paying a fee to a selling agent. Since this is the case most desirable residential and investment property is sold by the listing agents (who keep the entire fee).

What I always do is get my foot in the door by letting the listing agent know that I am not working with a Realtor. Then I try and get in front of the Seller and make a deal with a quick close where the Seller cuts the listing agents fee since I am representing myself.

If HARM gets a real estate license and we both buy identical $1mm condos in Pacific Heights with the sellers getting $940K he will pay a lot more than me since he will pay more than half of his $30K commission to the govt. (Social Security, Federal, State, etc.) and pay about $350 more in property taxes the first year and have his property taxes go up by more than $7 more per year every year…

@FAB,

If I get the license but don't actually practice the trade/join an agency, am I legally obligated to represent myself as a buyer's agent (for commission/tax purposes) in my own private transactions?

If so, what if I just get the training but forgo taking the license exam? Do you think it's still worth it?

FAB,

Then you're getting the Seller to drop the $1M selling price to $970K or something in that ballpark?

I was talking to someone at one of the "exclusive" RE firms and they were complaining about a huge increase in just what you're describing...I think.

They were also saying that sellers were increasingly cutting out the selling agent entirely, instead using an attorney, and offering the agent a lump-sum "settlement" which (according to her) isn't worth their time or money to fight. Of course, these are more the $4M+ types of places she's talking about...rich people with lots of lawyers.

HARM
You don't have to represent yourself at all...but you do have to disclose that you are an agent.

This is from the DQ press release this morning...

"The median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $485,000 last month. That was down 0.2 percent from a revised $486,000 in March and up 9.0 percent from $445,000 in April a year ago"....

I couldn't find any press release that revised the median price to 486K for March from the 501K number announced earlier in April. Infact DQ news made a big deal about the median price with this headline on April the 18th....

"Southland passes half million mark"....

The median price gets revised but the sales volume doesnt. How
can that be? That too, such a big revision??? Whats going on?...

Wouldnt such a big difference affect the CA numbers too?

It is my experience that RE agents do have access to the best listings first...which will play an important role in this declining market. I know one agent who has been consistantly buying a house a year and renting them out for a good return.
He is selling several now. He has 4 kids approaching college age and he is a smart man, unloading now.
Many people have pushed for me to get "the license" but
I don thin so Lucy!
Between the sheeple and the slimy cutthroats and the orange haired big earringed smokervoiced bitchy realtwhores out there...
well...I would shrink like the wicked witch of the west into nothingness with only a vapor rising from what used to be a soulful being.
I do however have an avid interest in RE. I follow the market...have an excellent recollection of the numbers, listings and prices....
but I couldn't...
I just couldn't....

WWII,

I may have done some wreckless things in my time here but I have never accused you of being on thread! Just kidding. You bring up a good point though. I had NO IDEA that there were that many blogs in Cali alone! There is such a thing as the "investment letter index" which is kind...... of close. They track bullish/bearish sentiment on everything from the long bond to individual stocks. Now that's not to say the consensus opinion is always right but it at least it gives an idea where sentiment is! The sheer amount of bearish input from all corners of the media and decidedly negative articles may perhaps even be drowning out the blogs?

A realtor friend of mine calls her RE office
'face lift central'
Seemed appropriate.
Maybe they have their face surgically altered to have those idiotic smiles permanently implanted?

@Randy H,

Don't know if you already saw my post in the last thread, but I wanted to know on what data you were basing this statement:

This is propelled by both fundamentals and financial reasons, not the least of which being (in the BA) wage inflation, rent inflation, and job growth.

At best I've only seen evidence that wages & rents are tracking (real) inflation --approx 5-6%/yr. Even that infamous March-April asking rents spike (/) trolls love to trot out is now petering out and falling back to earth. As far as job creation goes, it seems pretty anemic outside RE/construction/mortgage related industries, and those sectors are already reversing course.

Are you going bullish on us, dude?

WW2
I googled housing bubble blog
and , yes, Patrick is still #1!

LILLL,

I don't want you to even worry about! The retention prevention committee has been called up and are on their way. I do ask however that until they arrive to disconnect the phone, unplug the TV and block all your e-mail! I will talk you through this, focus on my voice right now O.K?

OK

How about we call it the
retention prevention intervention
committe?
Sound good?

Dinor,
I just hope that in a few years, we can come back to a blog like this one and chuckle to ourselves. " boy- remember back when buying anything in California SUCKED? ha ha.. good thing things arent like that anymore....

WW2 -

Personally, I dream of Charles H Smith's historically supported Bay area SFH median target: $315,00.00 - now that would be SWEET!

http://www.oftwominds.com/blogmay06/shiller-housing.html

HARM,

"Are you going bullish on us, dude?"

Firstly let's not go off the deep end alright? In regard to the HUGE RENT SPIKE I'd be more focused on WHY rents are likely to raise. If rents are moving up (however slight or much) IMHO that is something of a BULL capitulation! When unlimited upside is no longer the order of the day Mr. Specuvestor sits down and says to himself. "It was never my plan to be "stuck" with this property that long". I don't have the resources to fill this hole month after month. I suppose many have tried to do yet another re-fi and been turned down so they are playing out the only option left. This may even be true where "management" companies are involved.

However, regarding bubbles, Charles H Smith should not be referring to a "hockey-puck ascent to unsustainability", but rather a hockey-stick ascent to susustainability.

Oh well, metaphors can't always make sense...

/
__/ This is a hockey stick graph

( ) This is a hockey puck graph

WWII,

And we shall, and we shall. As far as my personal finances are concerned I know I'll feel a lot better at a neighborhood cook out when people in 2007/2008 ask me how long have I lived there? Then I get to tell them we're still moving in and I just stopped over b/c Mrs. DinOR hasn't unpacked the plates yet. I'll be getting mileage out of the "still moving in" line in 2009 and beyond.

This whole "rent spike" thing seems to be something cooked up by realtors and the like as fodder to pitch to current renters. " If you won't buy, well you'll be priced out or renting too! ha ha! Baloney. Rents will never come close to being the same as buying at this level except the few exotic high rises in SF. The day they even come to being within 20%, that will be when prices on housing has already fallen a considerable amount.

*ALERT TO SURFER X*

My folks back at corporate just sent me an e-mail. PBS is going to be airing a special tonight on "Boomers, finances and why they're screwed!" Now I wouldn't want you to miss that!

If rents are moving up (however slight or much) IMHO that is something of a BULL capitulation!

DinOR, we must do something immediately to prevent end-game bear capitulation! You're the expert on these matters, so you can be in charge. We could call it the "housing bubble blog bear retention prevention intervention committee" (HBBBRPIC for short).

To repeat my earlier point, rising asking prices for rentals does not necessary imply rising rents. If Patrick is reading this, I'd sure love it if he could produce asking volumes to go along with his prices graphs. Volumes have to be greater than 2000, but I have no idea if they've dropped since, say, 2003.

Likewise, consider the drop in median prices is San Mateo (as reported by this realtor's site:

http://www.creeksiderealty.com/bay_area_real_estate_market_newsletter/statistics_graphs/houses.htm

When this is coupled with the dramatic increase in inventory, it implies a drop in the market that is much worse than the drop in median prices alone. In either a rental or housing market that is flooded with inventory, the best houses will be the ones to go first. This implies superior product moving at inferior prices.

Or, I confess, it could imply crazed buyers grabbing the cheapest POS they can find... ;-)

We need to move away from using median statistics (median price, median income, median rent, etc). They are meaningless especially when we try to understand their inter-relationships.

We should understand the situation using:

1. same house price trend
2. same house (or comparable house) rent versus price
3. cost of housing versus income in the same household

Dinor,
Oh boy! I wouldn't want to miss that piece on boomers. Funny that PBS would air something like that since their core programming and audience are boomers anyway. On 2nd thought, maybe that's why they're airing it.
Actually, I thought I'd mention that while at the library last week, I saw this book: http://www.amazon.com/gp/product/0312326408/102-9353934-4868103?v=glance&n=283155
Anyhow, I couldn't help but wonder why you would need to write an entire book on defending boomers. hmmmm...

Dinor,
you should also read some of the rather long-winded reviews of that book. One of them- the longest one is really amusing. did you write that?

The Greater Generation : In Defense of the Baby Boom Legacy (Hardcover)
by Leonard Steinhorn

From Publishers Weekly
Baby boomers have been vilified as noisy, self-centered, childish, elitist and self-indulgent. Steinhorn forcefully and gracefully defends his age cohort against these stereotypes in a paean to the generation that has forever altered the face of American culture. The so-called "greatest generation," he says, imposed a cultural complacency whose worst elements included racism, sexual inequality and anti-Semitism. Boomers rebelled against their parents' values, striving to create an inclusive society that would recognize the contributions of all of its members. Defying and denouncing authority, the baby boomers protested against an unjust war and challenged an unethical political system. Even after the clamor of the 1960s quieted down, boomers refused to tolerate environmental violations, continued to challenge racial and sexual discrimination, rejected religious intolerance and defied racial and sexual taboos. And despite an apparent conservative turn in America, says Steinhorn, boomer values have in fact permeated our society to the point where a younger generation takes them for granted. This powerful book by Steinhorn, a professor at American University's School of Communications, reminds us that boomers continue to provide the methods and the impetus that are moving many young people today to challenge political arrogance, deceit and jingoism.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

OMFG! Someone please locate a barf bag for me... or two.

My source is the CA EDD.

* CA unemployment (overall) has fallen to equal the nat'l average.
* All non-farm classifications but one posted job gains
* Information posted modest declines (1800 jobs) mostly due to publishing and telecoms cutbacks.
* Farm jobs, even when seasonally adjusted, continue to shrink

* Most new jobs were created in Leisure and Hospitality, with half of those in food services.
* Tourism has recovered to pre 9/11 highs, and is on track for a record in 2006.

* Manufacturing gained about 1%; mostly in chemical mfg.

* Professional Business Services posted 21st consecutive month of job growth, mostly in professional, scientific and technical services.

* Unemployment in the BA is FALLING by 16.6% annualized; one of the fastest recovery rates in the country.

Yes, Boomers can take credit for all of the following:

--modern civil rights movement (started in the 1950s --at least)
--womens rights movement (started as far back as 19th century)
--landing a man on the moon (F-- you to WWII vets & Werner Von Braun)
--and end to "political arrogance and deceit" (Yeah, none of that in TODAY's world --especially around Berkeley uber-liberals. All my shrill left-wing activist friends just *love* to hear my opinions on illegal immigration, free ridership and personal responsibility. And they all listen SO patiently.)
--increased sexual promiscuity and accompanying rise/spread of STDs (oh, wait... actually they can take credit for that)

* Most new jobs were created in Leisure and Hospitality, with half of those in food services.

Food service... :-P