patrick.net

In regards to #3, I do think it is fraud when you then go around paying for articles in all the newspapers that say a "Bidding war" is back. I think bidding is back, but would call is a "under-bidding war". Who can bid the least and find the distressed home that must sell. That is the new game and I know a lot of friends that are playing and some getting lucky.

As far as #1 and #2. Make the documents public and there might be some trust given to realtors and banks. Keep things a secret and not everyone lies but a good number will. Realtors lie, it is a fact. Your #1 says they don't do it because it would discourage people adding a bid. How about they do it to encourage a trigger hungry buyer to overbid? Maybe they have a bid for the list, and now they would like to get 100K more, so they say there are 10 bids and some above asking. If you don't think this happens then I think you are being naive.

robertoaribas says

ALSO, keeping lots of homes without collecting anything in rent would go down in history as the worst business move in history.

You are assuming a free market which in housing we don't have. Banks are not a business. They don't need to operate like regular business, if they are losing money guess what happens? Us taxpayers feel so bad for them that we fork over our hard working money to help them out. That is what is happening now. Read up on it. If they were forced to be accountable for the housing they have on their books, then I absolutely agree with you. They would do the right business moves. However, they actually benefit far greater by not doing it and then passing on the bill to us all. You are not viewing the whole bank picture. Banks don't stand by themselves.

From what I understand, robertoaribas bought a few investing houses in Phoenix. He thought that he cannot lose money because the price/rent is low. Now the summer is coming and no one wants to rent houses there.

He doesn't understand that the house in a desert is cheap for a good reason. "rent" can be 0 in a desert.

I wonder rather buy the houses near Facebook area.

I mostly agree with your points 1 and 3. Maybe I would say that both issues would benefit from reform and oversight, but that would not significantly change the fundamentals.

However, as to point 2, it is a matter of fact that the banks are putting fewer houses on the market. I wouldn't call it fraudulent, although to the extent they are colluding in limiting supply they could be subject to anti-trust filings. And even if that does not happen (it probably won't) there is still the very fundamental point that the banks are accumulating a lot of houses on their books. At some point they will have to get rid of them, and that will be a negative for prices.

xenogear3 says

From what I understand, robertoaribas bought a few investing houses in Phoenix. He thought that he cannot lose money because the price/rent is low. Now the summer is coming and no one wants to rent houses there.
He doesn't understand that the house in a desert is cheap for a good reason. "rent" can be 0 in a desert.

Even if this is true, which I doubt, WHO CARES? It has absolutely nothing to do with his post. If you think he's wrong, how about you say what he's wrong about and why?

drtor says

And even if that does not happen (it probably won't) there is still the very fundamental point that the banks are accumulating a lot of houses on their books.

Do you have that data? I'd be curious to see REOs by month over the last 5 years. Not delinquent, just REO.

I don't think you are right Robert.

1) During the bubble this was a prevalent practice to get folks to compete. And I know that because I've heard that straight from the horses mouth. It isn't the smartest thing to do in today environment where buyers will just walk, but it still happens all too often.

2)You have to consider accounting rules, marking loans to the market, and more accommodative reserve standards under which banks have to comply with. By clearing inventory in order to free up reserves, and house price increases will be a long time in coming.

Bottom line in this market even though listing prices are up in some areas, sale prices are going down and will be moving toward the cash equivalent for several years even under Fed's strict policy of monetizing debt. Everyone knows there is an 800lb gorilla of poorly underwritten debt that is getting shuffled around still.

If you are worried about inflation you can always buy TIPS or possibly the floaters which Treasury is planning to start issuing. Or sadly just go with too big to fail, that cash cow is always going to be there.

tatupu70 says

drtor says

And even if that does not happen (it probably won't) there is still the very fundamental point that the banks are accumulating a lot of houses on their books.

Do you have that data? I'd be curious to see REOs by month over the last 5 years. Not delinquent, just REO.

It is hard to get good data. OCHousingnews had a very good analysis with some charts the other day. It is specific to OC but probably a lot of the phenomena are similar in the BA.

http://ochousingnews.com/news/8-7-years-to-clear-orange-county-distressed-inventory-at-stable-liquidation-rate

robertoaribas says

When I list a property, what I want is it sold. period. Telling someone I have 25 offers, some over list is discouraging them from writing an offer.

Telling someone you have ZERO offers is even worse, especially if it's the truth.

The fact remains that the agent has the means, motive, and opportunity to lie about the number of offers. There is no validation, which is a huge flaw in the current system. At a real auction, you can at least SEE the other bidders even if they might be shill bidders. In real estate, you can't see and have no documentation whatsoever about other bids on perhaps the biggest purchase of your life. You just have to rely on the famed honesty and integrity of realtors, who have a big financial motive to lie, but never do that because it would make them feel bad, right?

Don't agree with any of the points.

1) Realtors have a financial motive in every action they do. If so many realtors didn't do it, then I'd tend to agree and it would be a non-issue anyway, but the fact is a lot of realtors do it with the intention of creating imagined urgency to get higher and higher bids. Best and Final anyone?

2)Not sure how it is in Arizona, but here in California you can simply walk down the street and find homes with the "Chase owns this" or "BofA owns this" on the garage doors. I see it all the time, and none of these homes are on the MLS after sitting for months. Why?

3) This is the "auction" model. It's the reason why people never really get good deals on eBay. It's a means to create competition, and if you have "competing" buyers, it's always a good thing for sellers, and NEVER a good thing for buyers.

drtor says

It is hard to get good data. OCHousingnews had a very good analysis with some charts the other day. It is specific to OC but probably a lot of the phenomena are similar in the BA.
http://ochousingnews.com/news/8-7-years-to-clear-orange-county-distressed-inventory-at-stable-liquidation-rate

So it's down 12% YOY?

Telling someone you have ZERO offers is even worse, especially if it's the truth.

How do you figure. 1 offer accepted = big payday. Kicking an offer away = no sale and no payday.

Who risks $30K to gain $500??

xenogear3 says

From what I understand, robertoaribas bought a few investing houses in Phoenix. He thought that he cannot lose money because the price/rent is low. Now the summer is coming and no one wants to rent houses there.

He doesn't understand that the house in a desert is cheap for a good reason. "rent" can be 0 in a desert.

I wonder rather buy the houses near Facebook area.

Well that's a very interesting theory.

FortWayne says

Bottom line in this market even though listing prices are up in some areas, sale prices are going down and will be moving toward the cash equivalent for several years even under Fed's strict policy of monetizing debt. Everyone knows there is an 800lb gorilla of poorly underwritten debt that is getting shuffled around still.

Wrong. SALE prices are up in Phoenix. They are still heading down elsewhere, though.

I have been looking for a house for more than an year. Multiple offers do come but:

1. They don't mean house will sell for more than asking.
2. House has to be in turn key condition.

I wrote at asking on an house listed for 525k. House was in turn key condition. Seller had spent close to 80K on the house he had bought at about 425K.. He got 13 offers. Mine was 10th on the list. Highest offer was 551K. I can confirm they got 13 offers because listing agent did give us the list of offers and conveyed us that we lost the bid.

On the other house which too was in move in condition, listed for 515K, I wrote 505K, they got 4 offers and house went for 510K. Below asking. But I am not sure if they really got 4 offers because selling agent was a cheat.

robertoaribas says

There aren't ever multiple offers, the listing agent is lying.
why ridiculous? because it is idiotic.

Bottom feeders. This is true for low end properties. If the agent says he has 10 offers already for a million $ property then he is BSing.

robert is correct again as always.

I would say agents lying about other offers is rare.

Also often they will say 'other buyers are interested' this is only a sales tactic to get you to buy as all homes will get a coupla showings/phone calls. and its probably interpreted by noobs as 'multiple offers'

If you people are so certain of what is going on in the RE industry i dare you to go out and work in that field while keeping a day job (you can do it, i did it, Robert is doing it now).

So I would say me and robert have more of a reliable knowledge than the typical complainer on this complaint site.

PockyClipsNow says

robert is correct again as always.

I would say agents lying about other offers is rare.

Also often they will say 'other buyers are interested' this is only a sales tactic to get you to buy as all homes will get a coupla showings/phone calls. and its probably interpreted by noobs as 'multiple offers'

If you people are so certain of what is going on in the RE industry i dare you to go out and work in that field while keeping a day job (you can do it, i did it, Robert is doing it now).

So I would say me and robert have more of a reliable knowledge than the typical complainer on this complaint site.

I know of a place that just closed for $1.299 MM, there were 5 offers. The winning bid was all cash and had a quick close with few contingencies. It sold for the asking price and only one bid was below asking price. Some agents lie, most don't because it does not benefit them in the mid or long term. Why not? Because the best clients you can get are from personal referrals. There are a lot of misconceptions aired here by people who haven't bothered to do their homework or the math. "Agents get 6%" is my favorite. It's a 4 way split between 2 agents and 2 brokerages in most cases, half the normal sales are listed at 5% and short sales usually pay 4%.

robertoaribas says

2. The banks are fraudulently holding all the inventory back.
why ridiculousness? Well, you have obviously never worked with any banks... they are STUPID.

If banks are stupid, what does that make us?

The reason that banks hold property is that it makes their books look better and makes the chance of recouping there losses better over time.

If we are talking about neighborhoods with low vacancy and where owners are keeping up there homes, then yeah a bank will sell its assets there.

But in areas where this is not the case, they are holding a, for example, 600k asset that in reality is a 200k asset which, if sold, may get other owners in said neighborhood to walk away and give up -- in those areas I guaranfuckingtee you the banks are "managing" their inventory. This is not some urban myth.

I have two friends who work for Wells Fargo. One is dealing specifically with this stuff. He told me 4 years ago that it would take 10 years to clean this stuff up. Last week he said things were looking better and they may be slightly ahead of schedule.

Just curious, any homeowners thinking of selling?

Tom Stone says

"Agents get 6%" is my favorite. It's a 4 way split between 2 agents and 2 brokerages in most cases, half the normal sales are listed at 5% and short sales usually pay 4%.

1/2 of 1/2 is still way too much for the slime. $250 tops for them to drive me around. Considering the skill level needed, anything above that is unfair to all other professions, including McDs

Who are you working for? And why do you want this site shut down?