15
0

The Housing Trap


 invite response                
2012 Sep 18, 8:53am   211,268 views  261 comments

by Patrick   ➕follow (61)   💰tip   ignore  

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

  Realtors® 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 Realtor® 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


« First        Comments 101 - 140 of 261       Last »     Search these comments

101   RealisticOptimist1   2012 Sep 19, 5:47am  


Any restriction on where I can sell my own work is not acceptable.

I'm actually kind of amazed anyone puts up with it.

Patrick - I understand your concern. Keep in mind going through Amazon does reduce the chance of stolen copies getting out there, and its the most popular e-book platform out there.

102   Patrick   2012 Sep 19, 8:43am  

Woohoo, sales finally hit the 100 mark:

That's all physical copies, and I know at least some people have received them now.

103   Patrick   2012 Sep 19, 8:44am  

RealisticOptimist1 says

I wish this could go mainstream, but unlikely. Just this weekend I was out with friends and talk about the house next door (I rent) being up for sale for 350k with 10k in taxes was viewed as a "good price." I was trying to make a joke about it being a "bargain," but to my disappointment, they took it seriously. Keep in mind this house sold for 195k in 2001, and taxes have more than doubled since then.

This could go mainstream!

Just loan your copy to them for a while.

104   Vicente   2012 Sep 19, 8:55am  

Any chance of this being an iBook?

If not I'll order the dead-tree version on Amazon.

105   Patrick   2012 Sep 19, 9:43am  

Vicente says

Any chance of this being an iBook?

Yes! That's next.

I just finished the Kindle enrollment, and Elliemae was right that I could skip the exclusivity of Kindle "Select". So the Kindle version should be out within a day. The .doc format was really bad, so I left it as PDF, but that got a few formatting issues as well, like missing page breaks. But at least all the content is there.

Now for the iBook format... I will see if I can get that done tonight.

106   Patrick   2012 Sep 19, 9:44am  

Mandy Lifeboats says

I'm going to the Clark County Republican Central Committee meeting tonight in Las Vegas. The book should be arriving this afternoon, just in time for me to bring it with me to show it around.

Thank you! I think they'll like it, especially since Las Vegas had just about the worst bubble and crash of anywhere in the US except maybe Phoenix.

107   Patrick   2012 Sep 19, 10:43am  

Not available in stores!

I'd like for stores to carry it, but I don't have a distributor, and bookstores don't like to deal with each individual author.

Elliemae told me that she paid the $25 to createspace.com to have "expanded distribution" through stores and other online sellers, but all they did was undercut her price, bringing her profit to $0, so she doesn't recommend that that.

108   anonymous   2012 Sep 19, 11:46am  

Call it Crazy says

elliemae says

Women are emotional when it comes to home buying. And men have no ammunition against emotion.

It's not JUST home buying... they are emotional with every other issue of life!!

Humans are emotional beings. I used to generalize that it was "all the womens fault", until I experienced my assumptions in real life role reversals first hand, over and over again. It just seems to manifest itself differently, and we see it through our male eyes,,,,

109   Shaman   2012 Sep 20, 1:23am  

Both men and women are emotional, just about different things. Different triggers set us off, and they align by gender. Speaking as a man, what sets me off the worst is lack of respect. When a coworker maligns me or makes light of what I do/did, I get angry as hell. When my wife makes the mistake of belittling me or talking down to me, even if she has a point about something, I get mad! If she nags at me like I'm a child that needs to be told again and again, I get mad, and nothing productive is accomplished.
On the other hand I think that women are set off more by the presence of or lack of shown love. If I refuse to help my wife with something, that to her, shows lack of love and she gets upset. If I don't compliment or dote on her and make her feel like I want to be with her, again lack of love = meltdown. If I, heaven forbid, make a disparaging comment about her person, that is just asking for an estrogen bomb! Forgetting birthdays, anniversaries, v-day etc are all manifestations of a lack of love.
Guys might feel love for their sweetheart all the time, but she needs us to show it for it to be any good for her.

110   resistance   2012 Sep 20, 2:08am  

At the risk of getting called sexist, I think you're right about that.

Men are wired to be acutely aware of their position in the heirarchy, and respect is how they measure that. Women want to know they are personally valued by their mate so that they can count on his help when they need it. Maybe an overgeneralization, but I don't think so. It just follows from reproductive biology.

Having had roosters and hens, you can clearly see gender roles there. There is no political correctness in chickens. The roosters are cocky. The hens are good mothers who need that rooster around for protection and support. Roosters feed the hens sometimes, giving them bugs and such.

The attitude toward owning a house is partly just biologically different in men and women, IMHO.

111   Patrick   2012 Sep 20, 4:17am  

The Kindle version is now available!

http://www.amazon.com/dp/B009DRL91K

I'll make a separate thread about that.

112   leo707   2012 Sep 20, 4:35am  


Men are wired to be acutely aware of their position in the heirarchy, and respect is how they measure that. Women want to know they are personally valued by their mate so that they can count on his help when they need it. Maybe an overgeneralization, but I don't think so. It just follows from reproductive biology.

Yes, men and women are wired differently, but...it is not binary. There is a scale of behavior and while men tend to be grouped at one end and women on the other, depending on the behavior, there can be a lot of overlap.

There are probably many women who have felt pressured into buying a home by their "conspirator" husbands.

Also, these chapters:

Your Parents 27
Your Wife's Parents 27
Your Wife 27

Indicate that the book was written for men. Why not "Your Spouse's Parents" and "Your Spouse?"


Having had roosters and hens, you can clearly see gender roles there.

Humans generally have a much wider range of behavior than most other animals so it is a difficult comparison to make. I would wager that even with roosters and hens, if closely studied, you would see a "scale" of behavior.

113   exflirt   2012 Sep 20, 4:56am  

I’ll be buying the book. I’m a very happy renter but in the market to buy when the time is right – right house, right price.

And I’m picky about any house I might purchase so I’m contentedly hunkered down in my apartment with wood floors, new carpet, upgraded ceiling fans, 24 hour fitness center, black appliances, detached garages, totally awesome pool with 24 hour access that my daughter loves and I don’t have to maintain, and concierge services. Everything has an upside and I’m enjoying the positives at my apartment. Missing an attached garage with the ability to wash my cars at home and the opportunity to putter around the yard gardening, but heck, now I’ve got more time to read and sunbathe!

And leo707’s totally right about that “overlap.” The female in me would have appreciated reading a gender-neutral chapter titled “Spouse” because while I’ve always wanted a wife, someone to do all the things for me that husbands have always demanded and felt entitled to, I have no plans to acquire one! I’m a rational, logical, self-sufficient female who works on her own cars and houses and tends towards facts and analyzing. To me the most important and exciting part of a house is the garage – ha! I think things through thoroughly and figure if it doesn’t work out in the timeframe that it takes me to process something then that means it just wasn’t right to begin with.

One of the most perplexing criticisms I receive from men and women is that I don’t engage in the games females normally play, and tend to process things logically instead of emotionally. It seems that we’re usually expected to fill specific gender roles and it throws people off when I don’t fit in the “female” box. Of course I sport long hair and high heels to try to even things out, but I think that just annoys the women and confuses the men!

There’s just no winning…

114   Patrick   2012 Sep 20, 5:51am  

leo707 says

Indicate that the book was written for men. Why not "Your Spouse's Parents" and "Your Spouse?"

Because it really is the wife who wants the house much more than the husband, in general. Sure, there is overlap in gender roles, but the roles remain quite clearly distinct. The overlap does not make the fundamental differences irrelevant.

I was guessing before when I said that the pressure to buy is 2/3 from women and 1/3 from men, but after finding that article showing that 21% of sales are to single women and only 10% to single men, I'm pretty certain that I guessed right.

We should not let political correctness blind us to the reality in front of our eyes. I once had a debate with a coworker who claimed that there was no difference at all in capabilities between women and men. Zero. She did not have a good answer to the fact that there is no overlap at all in the world's records in weightlifting in the same weight class, for example.

We are animals and necessarily have the gender differences of animals. Not that they have to dominate everything, but they cannot be wished away or simply ignored either.

115   happycamper   2012 Sep 20, 6:05am  

Got the book, and I am reading it now. My favorite concept is still...you rent the money, or rent the space. And at this point in my life, renting the space is much better for me...and is just as equally, my "home"!

116   Patrick   2012 Sep 20, 6:09am  

happycamper says

Got the book, and I am reading it now. My favorite concept is still...you rent the money, or rent the space. And at this point in my life, renting the space is much better for me...and is just as equally, my "home"!

Please send me feedback on how to improve the next edition!

One thing I need to do is add a disclaimer saying I know it's not always the wife who is the one who wants to buy...

117   leo707   2012 Sep 20, 6:10am  


Please send me feedback on how to improve the next edition!

Also, don't forget to write a review on Amazon.

118   Patrick   2012 Sep 20, 6:42am  

happycamper says

My favorite concept is still...you rent the money, or rent the space.

Yes, and even if you own outright without any debt, you're still renting the space via the opportunity cost and risk of loss. You're giving up alternative uses of and income on the money, and taking on the risk of falling equity. That's a little subtle for most people to get though.

119   happycamper   2012 Sep 20, 6:51am  


Yes, and even if you own outright without any debt, you're still renting the space via the opportunity cost and risk of loss. You're giving up alternative uses of and income on the money, and taking on the risk of falling equity. That's a little subtle for most people to get though.

Agreed. Even if you pay off the mortgage, there is still the matter of taxes, ins., repairs, etc. and hoa fees, it you are lucky enough. So, you are correct...even if you "own" , there are still costs involved, not to mention the alternative uses of $$ and risk of falling equity you mentioned. Really, there is no such thing as owning it free and clear when you look at it from a broader perspective.

120   KILLERJANE   2012 Sep 20, 7:04am  

There is a fallacy here. This 'owning outright' all depends on
1. What would it rent for
2. How much cash paid
3. Get a HELOC but avoid using it unless you are super smart about it

If you do 1 and 2 well then,

4. You have an investment that earns income and will also gain value over time

If you do 3 right, then
5. You have liquidity.

Investing in the stock market is very risky and there is no box left to move into if you don't get it right.
Maybe use the worthless certificates to build a nest?

121   Patrick   2012 Sep 20, 7:16am  

KILLERJANE says

4. You have an investment that earns income and will also gain value over time

Not necessarily. House prices in Amsterdam are the same as they were 350 years ago, in terms of years of work to buy a house.

And prices in Japan have been falling for what, maybe 22 years now?

But yes, I agree you have to look at what it would rent for and how much you have to pay for it. If the rent is high and the price is low, sure, then it's a good deal and you should buy it. See http://patrick.net/calculator.php

122   37108605   2012 Sep 20, 7:43am  


KILLERJANE says

4. You have an investment that earns income and will also gain value over time

Not necessarily. House prices in Amsterdam are the same as they were 350 years ago, in terms of years of work to buy a house.

And prices in Japan have been falling for what, maybe 22 years now?

But yes, I agree you have to look at what it would rent for and how much you have to pay for it. If the rent is high and the price is low, sure, then it's a good deal and you should buy it. See http://patrick.net/calculator.php

Ironic, you read my mind just now reading another thread on both issues! Japan is the PERFECT example.

123   37108605   2012 Sep 20, 7:45am  


you're still renting the space via the opportunity cost and risk of loss. You're giving up alternative uses of and income on the money, and taking on the risk of falling equity.

PRECISELY.
You do realise you are now going way over the heads of many around here.

124   KILLERJANE   2012 Sep 20, 7:46am  

You just have to be smart and cover your bases and have a back door plan. That goes for many areas of life.

125   Patrick   2012 Sep 20, 7:48am  

Vicente says

Any chance of this being an iBook?

If not I'll order the dead-tree version on Amazon.

Well darn, it's harder than I thought. iBooks demands a brand new ISBN for the digital version, which would cost me $125 (what a scam!)

And they're demanding I give them a credit card number to sell my own book, nothing to do with my getting a new ISBN. Weird and slightly disturbing.

And they won't accept my PDF file, but require that I figure out how to reformat it to the ePub format.

Finally, it looks like you can just read Kindle books on the iPad:

http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000490441

So maybe I should just recommend that if people want to read the electronic edition that they use the free Kindle reader for iPad?

126   coriacci1   2012 Sep 20, 8:53am  

Quigley says

When my wife makes the mistake of belittling me or talking down to me, even if she has a point about something, I get mad! If she nags at me like I'm a child that needs to be told again and again, I get mad, and nothing productive is accomplished.
On the other hand I think that women are set off more by the presence of or lack of shown love. If I refuse to help my wife with something, that to her, shows lack of love and she gets upset. If I don't compliment or dote on her and make her feel like I want to be with her, again lack of love = meltdown. If I, heaven forbid, make a disparaging comment about her person, that is just asking for an estrogen bomb! Forgetting birthdays, anniversaries, v-day etc are all manifestations of a lack of love.

sounds like you married the wrong girl!

127   curious2   2012 Sep 20, 9:33am  

Amazon e-mailed me today that my copy shipped. They collected sales tax, even though I placed the order last week, so I guess we're doing our part to finance the drug war, the medical-industrial complex, and Marcus. Anyway I look forward to the book :)

128   Patrick   2012 Sep 20, 9:59am  

I'm still waiting for my own copies! I have not seen a physical copy of the final book yet.

But several people wrote me that they got their copies, so it's coming.

129   leo707   2012 Sep 20, 10:01am  


But several people wrote me that they got their copies, so it's coming.

Yeah, I got an email from Amazon today with tracking number. Also, with tax...

130   Patrick   2012 Sep 20, 10:05am  

The damn sales tax thing is one reason I'm not selling it myself. The state wanted my address, bank account number, SSN, driver's license number, and much more besides, and that's just for a "seller's license", to be allowed to collect the sales tax.

Sheesh. Sales tax is the first tax that should be eliminated in favor of a land value tax. It would be the same amount of revenue, but the paperwork and harm to commerce would be far less.

131   PockyClipsNow   2012 Sep 20, 10:11am  

land value tax is interesting.

I prefer my idea of 'why dont they just print all the money they need and eliminate ALL TAXES'.

half the federal budget is printed up money now via fed reserve buying bonds the chinese wont buy. fast forward 10 years they will be printing up 80% of the fed budget. The feds can simply cut checks to the states OR BETTER YET the fed reserve can buy up any and all gov bonds with printed money!

132   curious2   2012 Sep 20, 10:21am  


The damn sales tax thing is one reason I'm not selling it myself.

Reorganize PatNet as a church, you may become exempt. I'll join, especially if it scores me an exemption from ObamneyCare (currently only the Jehovah's Witnesses, Christian "Scientists," and certain Baptist sects are on the list of IRS-approved religions). One caveat though, tax exemption isn't automatic; Romney's cult has it, but Tom Cruise's cult continues to struggle. Wishing you a Happy Festivus, solstice, comet, or whatever :)

PockyClipsNow says

half the federal budget is printed up money now via fed reserve buying bonds the chinese wont buy. fast forward 10 years they will be printing up 80% of the fed budget.

If the Fed and Treasury continue on that path, the American Dollar will go the way of the Zimbabwe Dollar. Every government that discovers it can print "free" money fools itself as if it were the first to try that, and the story always ends badly. A fiat currency is like fire: an extremely useful invention when used properly, or a disaster if it falls into the wrong hands.

133   JodyChunder   2012 Sep 20, 10:25am  

PockyClipsNow says

I prefer my idea

Funny -- I preface nearly every other sentence with those very words...

134   Oxygen   2012 Sep 20, 2:01pm  

Quigley says

When my wife makes the mistake of belittling me or talking down to me, even if she has a point about something, I get mad! If she nags at me like I'm a child that needs to be told again and again, I get mad, and nothing productive is accomplished.
On the other hand I think that women are set off more by the presence of or lack of shown love. If I refuse to help my wife with something, that to her, shows lack of love and she gets upset. If I don't compliment or dote on her and make her feel like I want to be with her, again lack of love = meltdown. If I, heaven forbid, make a disparaging comment about her person, that is just asking for an estrogen bomb! Forgetting birthdays, anniversaries, v-day etc are all manifestations of a lack of love.
Guys might feel love for their sweetheart all the time, but she needs us to show it for it to be any good for her.

http://www.youtube.com/embed/hPIxrzmatq0

135   RealisticOptimist1   2012 Sep 20, 2:28pm  


RealisticOptimist1 says

I wish this could go mainstream, but unlikely. Just this weekend I was out with friends and talk about the house next door (I rent) being up for sale for 350k with 10k in taxes was viewed as a "good price." I was trying to make a joke about it being a "bargain," but to my disappointment, they took it seriously. Keep in mind this house sold for 195k in 2001, and taxes have more than doubled since then.

This could go mainstream!

Just loan your copy to them for a while.

They'd never read it, which is why I don't even bother engaging in discussion. :/

136   elliemae   2012 Sep 20, 5:38pm  


Elliemae told me that she paid the $25 to createspace.com to have "expanded distribution" through stores and other online sellers, but all they did was undercut her price, bringing her profit to $0, so she doesn't recommend that that.

Anyone can be an online seller - so if you pay for the "expanded distribution," that means not only can bookstores order it but also the Amazon online booksellers can too - only they receive all the profit.

So, when you pull up a book on Amazon and there are a bunch of options (a few of which undercut Amazon by less than a buck and one that sells it for $60 (!), most of the time these sellers are ordering from Amazon the same way as if you ordered directly from Amazon - only they're reping the profits. Does that make sense?

I put my book up for $16.95 plus s&h; and believe me - it's a bargain considering people pay thousands out of pocket when they qualify for Medicaid, or they hire a case manager to assist with placement when they still have to make the decisions anyway - but some asshole listed it immediately for $16.19.

I learned alot about the publishing angle. Let's get real - if my book sells enough that a publisher is interested in it, I can deal with it at that time.

137   JodyChunder   2012 Sep 20, 5:50pm  

RealisticOptimist1 says

hey'd never read it, which is why I don't even bother engaging in discussion. :/

10K in TAXES!!!...you must be TEXAS!

138   Patrick   2012 Sep 21, 2:44am  

elliemae says

I put my book up for $16.95 plus s&h; and believe me - it's a bargain considering people pay thousands out of pocket when they qualify for Medicaid, or they hire a case manager to assist with placement when they still have to make the decisions anyway

I agree your book is really valuable to the right crowd (people in need of good nursing home advice), but that crowd is rather sparsely dispersed through the general population. So general advertising is probably not going to be very effective, and maybe even word of mouth will be difficult because the people who need it probably don't even know each other.

Somehow you have to advertise right to the audience that is in need of nursing home info. Maybe people here have ideas on how to do that?

139   crazydesi   2012 Sep 21, 3:08am  


I'm still waiting for my own copies! I have not seen a physical copy of the final book yet.

But several people wrote me that they got their copies, so it's coming.

I got the book on 17th and finished reading the book on 17th night itself. One thing I did not like is about the spouse pressure, it is little exaggerated. My wife got mad by reading that page (btw she always tells her friends to read patrick.net before going with a realestate agent to see homes).

Overall its a great book, but a small one.

140   Patrick   2012 Sep 21, 3:58am  

crazydesi says

the spouse pressure, it is little exaggerated

Is it better to just delete or neuter that part of the sake of political correctness and inter-gender harmony, or to keep it for the discussion and controversy value?

I believe there is truth in it, but I can also see how it can be perceived as offensive.

crazydesi says

Overall its a great book, but a small one.

Thanks. Part of the idea is not to waste any words.

« First        Comments 101 - 140 of 261       Last »     Search these comments

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   random   suggestions   gaiste