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The Housing Trap

By Patrick (230/230 = 100% civil)   2012 Sep 18, 8:53am   ↑ like (15)   ↓ dislike   1 link   142,696 views   272 comments   watch (1)   share   quote  

http://www.amazon.com/Housing-Trap-Buyers-Captured-Yourself/dp/1479156213/?tag=patricknet-20

It's $12.50 so that if you buy two (makes a great gift!) then you don't have to pay any shipping charges.

Here is the table of contents:

Trapped! 8
  Can't Sell 9
  Can't Pay Off Mortgage 10
  Must Keep Obeying Boss 10
The Conspirators 12
  Your Agent 12
  Your Mortgage Broker 18
  Your Bank 18
  Fannie And Freddie 19
  The Federal Reserve 20
  Newspapers 21
  The NAR 23
  Congress 24
  The President of The United States 25
  Current Owners 25
  Your Boss 26
  Your Parents 27
  Your Wife's Parents 27
  Your Wife 27
Fallacies and Fantasies 30
  Appreciation 30
  Building Equity 32
  Renters Throw Money Away 34
  Tax Deduction 37
  Real Estate Is Local 39
  So Little Supply 40
  So Many Buyers 40
  Foreigners 41
  House Prices Don't Fall To Zero 41
  Supply And Demand 42
  Land Shortage 44
  Fundamentals Don't Matter 44
  Commissions Don't Matter 45
  Agents Don't Care What You Pay 46
  My Neighborhood Is Different 46
  You Have To Live Somewhere 47
  Rentals Not Available 48
  Rentals All Suck 48
  Owners Can Remodel 49
  But The Newspapers Say... 50
  But The Appraiser Said... 51
  Home Sweet Home 52
  Status 53
  Affordability Is Good Now 53
  Owning Limits Your Monthly Payment 54
  People Buy On Emotion 55
  Baby Needs House 55
  I Just Want It 56
Scams and Dirty Tricks 58
  RealtorsĀ® Claiming They re "Free" 58
  Claiming That You Need An Agent 60
  Showing You The Ugly Dogs First 61
  Underpricing 62
  Missing Price 64
  Missing Address 64
  Renting Property Without Permission 65
  Straw Buyers 65
  Faking Comps 66
  Faking The Dimensions 67
  Faking The Sale 67
  Erasing Price History And Relisting 68
  Faking Higher Offers 69
  Hiding Your Low Offer 69
  Taking Bribe To Hide Your Offer 70
  Hiding Offer To Get Double Commission 70
  Hiding Offer To Get Seller To Take Loss 71
  Photoshop 71
  Advertising Agent Instead Of House 71
  Kickbacks 72
  Bribes 72
  A Trick Of Your Own 73
What Should You Do? 75
  Be Paranoid 75
  Never Sign Any Agent Agreement 75
  Never Reveal Your Price Limit 77
  Hire Your Own Independent Inspector 78
  Favor FSBOs 78
  Do Not Rush 80
  Do Not Overpay 81
  Deliver Offer To Seller Personally 83
  Pay Cash 84
  Long Term Lease 85
  Walk Away 85
  If You're A RealtorĀ® 87
Calculating Fair Price 88
  Two Kinds Of Rent 89
  Borrowing Does Not Help 91
  Downpayment Doesn't Help Much 91
  Conventional Mortgage 92
  Deduction Doesn't Help Most People 93
  Appreciation Is Uncertain 95
  Taxability Of Gains 96
  What About Leverage? 97
  What About Inflation? 98
  Rules Of Thumb 99
  Anything else? 101
Long-Term Solutions 102
  Call Housing Inflation What It Is 102
  Help Correct Reporters 103
  No Public Guarantees For Private Debt 104
  No Mortgage Interest Deduction 105
  Public Bids On Housing 107
  Legally Binding Offers To Sell 108
  Eliminate Comps As Meaningless 108
  No Empty Houses 109
  Publicly Financed Elections 110
  End Proposition 13 In California 111
  The Georgist Land Value Tax 112
  Spread The Word 113

#housing

« First     « Previous     Comments 233-272 of 272     Last »

233   Patrick (230/230 = 100% civil)   2012 Nov 2, 2:04pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

SFace says

would you really want to upgrade the kitchen or bathroom knowing you are leasing the place?

People do, especially in expensive markets. It's fairly standard with high-end rentals in NYC.

234   Patrick (230/230 = 100% civil)   2012 Nov 2, 2:23pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

SFace says

An established neighborhood like Menlo Park, especially for SFH, median ownership is likely around 20 years.

No, pretty sure it's nowhere near 20 years. Houses turn over here constantly. Just drive around and you see for sale signs all the time. I certainly see them.

In fact, I usually get a kick out of biking around and noting all the houses I've seen the inside of when they were for sale. There are only a very few people I know of who've been in the neighborhood longer than I have (13 years now).

235   SubOink (3/3 = 100% civil)   2012 Nov 2, 4:10pm  ↑ like   ↓ dislike (1)   quote   top   bottom   home   share  


than I have (13 years now)

You yourself prove me right. Haven't moved in 13 years...

I rest my case.

236   Patrick (230/230 = 100% civil)   2012 Nov 3, 12:12am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

I rent though.

237   toothfairy   2012 Nov 3, 12:45am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

Buying a house is a tricky thing most people go through a few before they finally settle down.

238   taxee   2012 Nov 7, 9:35pm  ↑ like (3)   ↓ dislike   quote   top   bottom   home   share  

Cut expenses while you are working. Save half your income. Buy with cash when you retire. Use a lifetime of learning to make the biggest purchase of your life.

239   bubblesitter   2012 Nov 8, 12:15am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

taxee says

Cut expenses while you are working. Save half your income. Buy with cash when you retire. Use a lifetime of learning to make the biggest purchase of your life.

But then you will miss the lifetime experience of speculating!

240   taxee   2012 Nov 8, 2:10am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

bubblesitter says

But then you will miss the lifetime experience of speculating!

Youth is a kick even without spending a lot. Go for the surest thing and maybe have a dignified old age.

241   PockyClipsNow (8/8 = 100% civil)   2012 Nov 8, 8:58am  ↑ like   ↓ dislike   quote   top   bottom   home   share  


SubOink says

Remodel to your liking, restructure to your liking.

Maybe inside, if you get planning permission and all. Outside, much harder to get permission.

And who says landlords won't allow improvements? They love improvements.

SubOink says

if you buy at the right price...

Yes, that's my whole point and only point really. So you agree.

SubOink says

I don't know ANYBODY that has owned and moved within 6 years

And nonetheless it's a fact that the median ownership length is 6 years. Look it up.

Flippers have skewed the owership average a lot. They shouldnt count a less than one year of owning but they do.

242   zesta   2012 Nov 8, 9:39am  ↑ like   ↓ dislike   quote   top   bottom   home   share  


There are only a very few people I know of who've been in the neighborhood longer than I have (13 years now).

I'd love to see a rough rent/buy calc for over the 13 years that shows you have been better off renting vs buying for those 13 years.

Not saying it's not possible, especially with a great rental deal, but hard for me to fathom without seeing the numbers.

243   The Professor   2012 Nov 8, 10:11am  ↑ like (2)   ↓ dislike (1)   quote   top   bottom   home   share  

PockyClipsNow says

Flippers have skewed the owership average a lot.

What a great description of having a mortgage, "owership".

244   Biff Baxter   2012 Nov 20, 10:14am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

I saw Patrick's ad for his book today. I hope he sells a lot of them. I only wish he provided more details about what is in the book.

Biff

245   The Professor   2012 Nov 20, 10:48am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

Biff Baxter says

I saw Patrick's ad for his book today. I hope he sells a lot of them. I only wish he provided more details about what is in the book.

Biff

Buy one and find out. Buy two and get free shipping!

246   BayArea (21/21 = 100% civil)   2012 Dec 3, 10:06am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

SFace says

My SFH in Hercules, probably 1-2, lol.

@SFace so true. My folks own a home in neighboring Pinole, and the turnover we've witnessed in this neighborhood has been alarming... Neighborhood was built in 1990 and is in the ballpark of less than 10% of original owners remaining. That makes for a neighborhood where you don't want to meet your neighbors since they are sure to bail in no time.

Patrick, how many copies you up to?

Test: @BayArea

247   FunTime   2012 Dec 4, 2:18am  ↑ like (3)   ↓ dislike   quote   top   bottom   home   share  

Bought it and my wife immediately picked it up and started reading. Surprising since she loathes another rant from me inspired by patrick.net.

248   Patrick (230/230 = 100% civil)   2012 Dec 4, 2:37am  ↑ like (2)   ↓ dislike   quote   top   bottom   home   share  

BayArea says

Patrick, how many copies you up to?

472 sold now.

249   BayArea (21/21 = 100% civil)   2012 Dec 4, 7:43am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Awesome, climbing steadily looks like.

250   bubblesitter   2012 Dec 5, 1:38am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Now, who are those bulls that posted negative reviews?

251   BayArea (21/21 = 100% civil)   2012 Dec 5, 2:17am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

Patrick, just left you my own 5-star Amazon review.

bubblesitter says

Now, who are those bulls that posted negative reviews?

One is someone that took offense to the wife section. I knew this would get some flack but I can't argue with Patrick on this one. Perhaps version II should go a touch more PC and note "spouse" instead as was already covered.

The other is someone that's simply overly critical.

But I do wonder, Patrick, was it still cheaper for you to rent where you are then to have bought the same thing in 2009-2011 when the Case-Shiller index in Nor CA dropped to below 125 (2002 pricing levels)?

252   Patrick (230/230 = 100% civil)   2012 Dec 5, 9:50am  ↑ like (2)   ↓ dislike   quote   top   bottom   home   share  

BayArea says

But I do wonder, Patrick, was it still cheaper for you to rent where you are then to have bought the same thing in 2009-2011 when the Case-Shiller index in Nor CA dropped to below 125 (2002 pricing levels)?

Yes! It is still far cheaper to rent where I am (94025), though the difference had declined a little.

It's still nuts here. Kind of like NYC. People pay amounts way beyond the fundamental value of a house or apartment just to impress their friends.

253   BayArea (21/21 = 100% civil)   2012 Dec 5, 10:18am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

Interesting!

I do think that the number of homeowners that know how to value a property and compare cost to own vs rent is staggeringly low if I had to guess.

For many, buying is just something you do as a inexplicable progression in ones life (or ones mind at least).

And to be fair when I bought in 2007, I had no clue on the topic of valuation and cost to buy vs rent.

254   Bellingham Bill (12/12 = 100% civil)   2012 Dec 5, 10:24am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  


just to impress their friends

and be *with* their friends. Location, location, location.

I wouldn't mind getting a doomstead over the hill from you in the San Lorenzo valley, but who the hell will come and see me???

255   bg   2012 Dec 5, 3:44pm  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

bubblesitter says

Now, who are those bulls that posted negative reviews?

There is only one. What do they know anyway. I teach classes of 40-100 people. I don't get too worried when one person gives me a scathing review.

256   Patrick (230/230 = 100% civil)   2012 Dec 6, 12:16am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Bellingham Bill says

I wouldn't mind getting a doomstead

ROFL! I like the term "doomstead". Never head it before but I know exactly what you mean. A place to wait out the coming cannibal anarchy.

257   bubblesitter   2012 Dec 6, 12:50am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  


Bellingham Bill says

I wouldn't mind getting a doomstead

ROFL! I like the term "doomstead". Never head it before but I know exactly what you mean. A place to wait out the coming cannibal anarchy.

AF would be the right person to add some flavor here. :)

258   Macropodia (30/32 = 93% civil)   2013 Feb 20, 12:24pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

how about getting it digitally on the Nook??

259   Patrick (230/230 = 100% civil)   2013 Feb 20, 12:26pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

I like paper really. It sticks around much better than bits do.

Remember when Amazon was revoking books from people's Kindles without their permission? That kind of shit just can't be done with paper.

260   Macropodia (30/32 = 93% civil)   2013 Feb 20, 12:30pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

True...but I'm all set up for the Nook!
Nook HD+....Nook reader on the galaxy s3....both home and work computers...can get at all books/mags anytime anywhere...the convenience factor is overwhelming...
I'll give you $ 12.50 and you email me the original manuscript!! I gotta have it in 'bits'!

I like paper really. It sticks around much better than bits do.

Remember when Amazon was revoking books from people's Kindles without their permission? That kind of shit just can't be done with paper.

261   Macropodia (30/32 = 93% civil)   2013 Feb 20, 12:31pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

well, i can probably download the kindle reader for everything and get it there...

262   Patrick (230/230 = 100% civil)   2013 Feb 20, 12:31pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

I'll mail you a paper copy. Email me where to send it.

263   Macropodia (30/32 = 93% civil)   2013 Feb 20, 12:47pm  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

Thanks for the offer...but i've ordered the digital copy...
Your frontpage advertisement finally wore me down!!

264   New Renter   2013 Feb 20, 1:14pm  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  


It's $12.50 so that if you buy two (makes a great gift!) then you don't have to pay any shipping charges.

Buy one as a gift for Iwog and the other for Roberto

265   JodyChunder   2013 Feb 20, 1:49pm  ↑ like (2)   ↓ dislike   quote   top   bottom   home   share  

No matter which side of the fence you're one, it's an excellent reference, and gets the juices flowing. I bought one a few months back and have shared it with a couple of people. I need to buy another one for my son, who's about to strap himself to a millstone.

266   Macropodia (30/32 = 93% civil)   2013 Feb 20, 11:09pm  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

They won't read it voluntarily....
but this blog software can be upgraded to track and append paragragh after paragraph of the book in a linear fashion every time they post....Forced assimilation!!

New Renter says

It's $12.50 so that if you buy two (makes a great gift!) then you don't have to pay any shipping charges.

Buy one as a gift for Iwog and the other for Roberto

267   Alex Rademacher   2013 May 14, 1:48pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

It all comes down to is it cheaper to rent or is it cheaper to buy ..

if you can Rent the home you'd love to live in for less than you would pay to buy it. why would you buy it? and vice versa.

for me the home i really wanted to live in was cheaper to buy, so i did. Using the Rent vs buy calculator came back with 17% more value to buy.

one thing that confuses me is that the rent vs buy calculator on this site ignores equity built up (or i'm just not seeing it)

also for me.. i just couldn't find a house with a full acre to rent. i could find houses with small back yards and 3 car garages , that were less than a stone throws from the neighbors. and i ended up buying a house with a 2 car (i have 4 vehicles + a trailer) but with a full acre parking is rather easy. :D

268   jvolstad (9/9 = 100% civil)   2014 Sep 25, 9:12am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

How are sales going? Is release two coming out?

269   Diva24   2014 Sep 25, 9:50am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

toothfairy says

I can leave one half open for when I want to stay there and rent the other half.

If the city says something I'll pay the fines.

That's the landlord I want....
NOT!!

270   Diva24   2014 Sep 25, 9:53am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

zesta says

There are only a very few people I know of who've been in the neighborhood longer than I have (13 years now).

I'd love to see a rough rent/buy calc for over the 13 years that shows you have been better off renting vs buying for those 13 years.

Not saying it's not possible, especially with a great rental deal, but hard for me to fathom without seeing the numbers.

8 years in a rental purchased by owner for $405k.
Move in rent = $1,480. Move out rent = $1,630
Current asking price = $375K

Humm...

271   Nika   2015 Oct 23, 7:06am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

You are actually advocating being a life long renter?!

272   Newbie123   2015 Oct 25, 3:04pm  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  


BayArea says

Patrick, how many copies you up to?

472 sold now.

I bought one and it is worth every penny. Its easy to read and it helped me to avoid making a huge financial mistake. Thanks Patrick!

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