patrick.net

If they're bidding, we walk. Multiple bids are proof there is still more money (or at least more debt) than sense chasing houses.

Where I don't see anyone calling bills**t in this whole deal is the owner bought only in 2000. It's not like they lived there 30 years & built a generation's worth of emotional attachment.

Better still, THEY PAID $549K AT THE PEAK of the previous bubble. These owners then ponied up for granite counters, etc. They may be losing money even before backing out 6% commission from $635K. (Or their break-even point may be right in that area...)

Run away, run away!

I am again seeing many people taking 5 ARM's and buying up homes at 3.99% APR.I can't believe this is happening again.
God help America !

What is the RUSH, Do many of you think that Bay area Prices are going to higher in the next five or ten years? I sure don't... I am betting you will be able to buy that house in 2014 for 250K maybe even 200K we are in for some real slow times here folks, and with Ca.'s budget issues, and our USA economy in shambles and the U.E. Rate is going to at least 11.4% and likely 12.1% late 2010 and stay over 10% for years, and yada yada... you see where I am at... lets revisit this post in 5 years and see?

A major facilitator for the behavior of the Agents is the behavior of the buyers themselves. More specifically buyers like Yellowstone. This stupid fool has bid $ 650K for a home that he knows is less than $ 599K. Consider that with what I did in a similar situation. The home was a REO in Houston, where there was no bubble. It was a 2006 construction. The builder was still selling the same model in the area at a base price of $ 179K. The list price was $ 159K, which itself was a great bargain and Zestimate was an outrageous $ 389K (which I never really believed, but over a period of 1 yr it has adjusted to more realistic levels). For the record, I still value zestimate inspite of noticing such discrepancies. I did my rent/own math and bid $ 135K. I figured that if I landed the home at that price, I would be able to rent it out and the rent would pay my mortgage and ALL other taxes and insurance. My agent came back with usual story that there are multiple bids and advised me to upgrade the bid. I asked her to stuff it and walked away. Surprise of surprises, I get a call a few days later from her saying that the other bidder who supposedly bid higher than me had actually put in a bid simultaneously for another home also and he wanted to buy that home, and was pulling out his bid for this home, so leaving me the highest (and sole) bidder for this home! I had the right to say stuff it at that time or even lower my bid. But I had done my research and knew the home was a good investment opportunity and would never be underwater at my price. So, I went ahead and bought the home!

:)

Teddy, you didn't buy a home, you bought a house - especially if you are renting it out. Houston is the pits - good job not overpaying for a box there.

cashmonger says

Teddy, you didn’t buy a home, you bought a house - especially if you are renting it out. Houston is the pits - good job not overpaying for a box there.

Hey, I used to live in Houston. The traffic was a nightmare (and the reason I moved), but the people were cool.

I agree that the people in Houston are cool. I have lots of family there, but 90% of them would move if they could.

Yellowstone,

Some of the others are hard on you. I agree with them however this was a blessing in disguise.

The market is still being manipulated with the government in on the act now. Property taxes are going to be forced to increase in many places around the USA. The $8,000 home credit will most likely be extended to keep up with the charade. Who knows...they might increase it to $15,000.

Still lots more foreclosures in 2010 and beyond. There isn't any rush to buy and I still don't understand people rushing to buy. It's still a good time to rent.

Yellowstone- Thanks for sharing your experience. I just experienced a similar lie fest but with a twist.

I have a friend who was looking for a house within walking distance to his work. He didn't care about anything but the walking distance- WHAT WAS HIS BIG MISTAKE? He shared this information with his "buyers agent". VERY BAD!! He was prepared to pay cash and since the "neighborhood" was in a commercial inner city area with CRIME CRIME CRIME, he figured it wouldn't matter since he wears an emergency pendant that goes directly to the police department---when he gets robbed.

Stockton, which has one of the highest foreclosure rates and lowest average incomes in the USA attempts to compete with Detroit, Watts and Oakland for the honor of having the most murders or rapes per capita. There were 80 violent felonies within a radius of two miles of his work (retail store), as of three months ago.

But the "location location location" mantra did not deter Realtors from lying! He found a house by walking the "hood" that was asking $115k. It is a typical depression era bungalow at 1200 sqft on a 4500 sq ft lot.

He called me in a panic "what do I do?" Please explain? The agent told me that it had seven offers on it and that I had to hurry. I asked him why it had so many "offers" on it, since it had been listed at over one year, which was evidence that the asking price was way TOO HIGH to begin with. Why hasn't it sold by now?

He asked my opinion. I am not a Realskunk, but I know a BROKER who is repenting for stealing and robbing buyers during the bubble. After ten years of cheating and stealing - he is semi-retired and his new purpose in life is to spread the gospel about how these agents CHEAT! So he faxed me lots of packages - the good the bad and the ugly. SHE SAID THE AREA IS UGLY for Realtors. She had a similar house she sold in the past year that was on a larger lot, a better area and was 1900 sq ft for 115k which she said was "HIGH" . I told her the scenario and she replied ---"thats obvious they are lying to your friend, but there is nothing you can do---the NAR and CAR and its lobby makes sure you can not identify this type of fraud."

Bottom Line: I faxed the HONEST packages ( comps + complete county records history on house) to my friend. He now hates REALTORS and hates bidding against himself! But he wanted the house. He ended up bidding 151k for that piece of termite ridden crap. Guess what? He had termite and other hazardous materials contingencies already in the REALTOR OFFER forms (boiler plates for mortage suckers) and included that contingency. THERE IS MORE- THEY FOUND THAT---NO SURPRISE TO ME---The whole house is loaded with asbestos! He freaked out---and asked the agent what to do---ANOTHER BIG MISTAKE!

The agent gave him a referral to an unlicensed contractor who specialized "in these things". For a fee---the house would be brought up to "safe" levels---without any government permits or inspections. I guess he can always sleep at work? That a lot of cash to pay for CRAP built in 1931---that can kill you if you live there.

Here is the best part---- A few weeks later, a Realtor I know bragged about how they screwed over a buyer---we were at a cocktail party with lots of Realsnakes, builders and other of their ilk were present (many are now doing mortgage refi games). They were all bragging about how much they screwed over someone. He told me about his "seven offer gambit"---and the asbestos. The reason the house would not sell at any price--is that buyers in this area were FHA type buyers which requires a HUD inspection. IT WAS THE SAME HOUSE MY OTHER FRIEND BOUGHT.

I asked the Realtor if what he did was legal--- he responded---"I think I saw you at his store? What were you doing in "that" place? Your buyer is my friend. He said OOPS and walked away.

I need no OTHER PROOF that this is a TYPICAL REALTOR SCAM! I immediately contacted the local Realtor board---they would not talk to me---I was not a party to the transaction--so screw you---and ethics?

I also contacted the California State DRE and they told me that there was NO WAY TO LEGALLY LEARN ABOUT THE OTHER "OFFERS"---other than asking for COPIES. I was informed that this HAPPENS ALL THE TIME. And they had NO WAY TO AUTHENTICATE the "offers". I also contacted the California agencies (there are many) that handle asbestos- They DON'T CARE----THEY TOLD ME THEY WERE TOO BUSY ---unless it is YOUR HOUSE. If it is YOUR HOUSE - YOU COMMITTED A FELONY for having an illegal asbestos removal! What about the crooked Realtor and unlicensed HVAC contractor. First, YOU need to fill out a complaint---we will investigate YOU first- this goes on all the time.

Is there anything else? I also called the EPA and the local county healrh office about the asbestos---

NO ONE CARES! There is NOT ONE AGENCY to handle all the "fiddling about" and "coordination that is required.

CAVEAT EMPTOR ---I would never trust a working REALTOR---ever

True or not (I mean who trusts a devil?), I am believing investor90's story as if it were gospel. Patrick, please repost his story as a link on your front page - "airyone" needs to read it. One can only hope that the entire Realtard(R) profession goes extint o'er the next 5 years.

investor90 says

I faxed the HONEST packages ( comps + complete county records history on house) to my friend. He now hates REALTORS and hates bidding against himself! But he wanted the house. He ended up bidding 151k for that piece of termite ridden crap.

Despite your well researched advice he went ahead and bought anyway? And at that inflated price? Then he agreed to cut corners using an unlicensed contractor? You friend sounds like one of those who do not care about long range consequences, as long as they can have what they want right now. You know, the type that keeps easy credit stores, the "something for nothing" telephone/internet scams, and lotteries in business.

Yes, those realtors may have been unprincipled sharks, but in this case, those sharks had equally unprincipled and short sighted chum to feed on.

The day before he was to close on that house, you should have put him on a bus to Mexico with no money in his pockets. Anyway, I hope the next person you try to help listens to you.

Curious, most people with the ability to accumulate $151k purchase money are smart enough to insist on a home inspection and be properly sceptical of "multiple bids." Especially when asked to pay 31% over the asking price. I suspect your friend inherited that money, or maybe he actually won a lottery.

This is so unbelievably sad! A shack is what you would have gotten. Thank goodness you didn't win this 'bidding war' What a scam! These people should be ashamed at their greedy behavior. Walk away and know that this was a complete joke.

Headset- I didn't want to provide too much information, because it would be very easy for them (Realscum) to figure out all the people involved. I can tell you this person is smart and frugal, and from THEIR perspective, it was money well spent. The buyer owns his business, but leases his store property. He wanted to make a permanent location to protect his "moveable" property. By buying a house nearby, he could convert part of the house to SECURE STORAGE. This way, he doesn't have to worry about control by the owner of the commercial building. They want him to stay, because of all the crime, many retail stores are closing up and leaving the area. Since he was a renter, he has no place to store valuable inventory items. He is NOT stupid---but he needed ANY house very close by. He can walk to it in less than a few minutes. I understand he will be getting a CCW gun permit soon. He has been robbed many times.

It is ironic that local REALTORS are starving---but that does NOT stop them from LYING. Its like some disease---they just can't help themselves. I truly believe it is more than just evil and greed! I think they act this way---because they KNOW that in REAL terms---they are LOSERS who can't do anything else but take a mail order RE class ( NO DEGREE IS REQUIRED). So to feel good about their MISERABLE lying lives. it makes since to make EVERYONE else a CHUMP or sucker Knowing each day thay you have not only stolen from people, but also have carte balnche sionce none of the local state or Federal regulatory agencies care except that they want to keep a high FLOOR under housing prces.

Why can't we explain that LOW HOUSE PRICES ARE GOOD, and HIGH HOUSE PRICES are BAD?

We do this with EVERYTHING else---from cars to furniture to clothes, to food, but when it comes to houses---people think that PAYING MORE than the dump is worth makes them look smarter, wiser wealthier, when all it does is make them POORER And a debt slave. Think about this! A person who buys an overpriced dump--- mean "home" LOL----must pay and pay and endure anyhing problems that life brings them---from medical issues to family issues---the list is endless. So they listen to REALTORS and other pied pipers of misery and believe one thing ! DEBT IS WEALTH! But debt is almost never wealth unless you never pay it back...like what is happening to the economys----of MOST countries of the world.

KDlady- After looking at these responses---I am LOWERING how much I will pay for a house! Think about this idea PLEASE~!

Trade unions are there to protect workers from abusive or unsafe working conditions. Our goverenmet is supposed to do regulatory matters to protect us from inbridled cheating and stealing by those who think they can get away with it. The Realtards have their organization (NAR) which pays off politicians (campaign contributions--yeah right!---I say its PURE BRIBERY).

My idea: Develop a HOUSE BUYERS UNION or ASSOCIATION. All we need is a large membership- We can run it inexpensively by applying for grants designed for ANTI-CRIME homeland security approaches. THIS IS OUR country and we must take it back from thieves like the "TAN MAN" from Countrywide or those government types who encouraged Madoff to steal BiLLIONS by their INACTION.

I propose a national house buyers Association. What we do is NOT BUY, to get our power and control. Okay NAR, you want to keep spinning tales? Then our Association will refrain from buying any HOUSE for lets say THREE MONTHS. Open your mouths again and we will double it to six months. Now after a year of this---I CAN WAIT---I hace been waiting a long time already! I just SAVE MORE MONEY FOR ME!---not the Realtors who use OUR money against us by jacking up house prices.

Our slogan could be the JUST SAY NO ! to a "USED HOUSE". Anytime we start seeing "cozy fixer" we will counter with "EL DUMPO". HAS 30 years of leaking plumbing problems right here! This is a known gang hideout for the local bangers. Realtards have NO PROBLEM with hiding rat traps filled with asbestos as a "charming opportunity".

Bloomberg via Patrick.net:

Residential construction and home sales led the way out of the previous seven recessions going back to 1960, according to David Berson, chief economist of PMI Group, a mortgage insurer in Walnut Creek, California. Real-estate sales fuel consumer spending, which historically accounts for about 70 percent of gross domestic product, he said

.
This seems unreasonable, since all seven of the previous recessions did not include a housing bubble - the collapse of which was a major symptom of the recession present. Given that, how are home sales and new construction going to lead us out of this recession?

"These people should be ashamed at their greedy behavior."

Shame has no teeth. try imposing hefty dollar fines! kick in the wallet does does wonders...

investor90 says

I propose a national house buyers Association. What we do is NOT BUY, to get our power and control.

I like the idea, but remember that buyers are competing against each other. There is no discipline or organization.

In fact, all contact between buyers is deliberately blocked by realtors. The realtor's function is to prevent the free flow of information, to keep buyers at a disadvantage.

I think we need laws that make all house bids public information, just like we have for the stock market.

Amen, that is what we need.

Yes I heartily agree! We have to start somewhere! THE BENEFITS ARE ALMOST LIMITLESS. We can start a grassroots campaign to help those of us who are in the "BUYER" classification. After a few first tough years, we would also be strongly supporting the sellers as well. BECAUSE WE WOULD PUSH THE MLS and THE ESTATE AGENTS (Realtors) OUT OF THE EQUATION. Prices could drop 6% overnight. We need to follow Obama's lead and TRY ACTION FOR CHANGE. Lets have a PATRICK.NET poll after expanded discussion of the proposal. We need to figure out what our framework will be to suport the maximum number of consumers. I am NOT anti- seller, just anti lying, cheating and stealing.

Do you like my logo now? Let me know? Its just a pile of gold bullion ( the best is Mexican one or dos pesos) at $1010 /oz spot price. Minted until 1948. Not collector quality---gold value only.

Sigh - the buyer here is buying a story of multiple offers and the need to write begging letters? How long will it take for people to get it?
Zillow is wildly wrong about prices as they don't accept REO sales (in other words the market) as inputs. I personally know the owners of an almost identical property to this one - its Zillow value is almost $200k over the price the identical house next door sold for over a year ago.
The other thing I really don't get - and this is common - is how people are willing to kick down huge sums of money to buy a house fast. What is the rush? You are not buying lunch before a meeting - you are buying the space you may well live in forever.

I must admit I like the pile-of-gold logo.

A grassroots campaign to make all house bids (and sales!) public information might be just the thing to fix what's wrong with real estate. One reader told me that you are forbidden by law in some states from making addresses of officials like policemen and judges public knowledge, so criminals can't hunt them down for revenge. So we'd have to work around that law.

What exactly should be the public information about bids that would make it impossible for realtors to create fake bids?

* bid date
* bid amount
* bidder name?
* whether bid was withdrawn, or financing fell through

What else?

I would imagine a bid's relevance needs to be tied to the buyers financial abilities to support the bid in some manner - before a bid is acctually counted as a "bid". No idea how to do it, just pointing it out. lol

Add to Patricks list: In my opinion, there should be 3 LPO's (lenders price oppinions) to set an asking price on all REO's, not the BPO (broker price opinion) that is in place now. And those lenders would be on record as to an amount they are willing to value the home. Did I say that where it made sense?

Yes, good idea.

It's not a bid until it's an approved loan amount from a bank, or proof of cash on hand. Or a combination of those two.

Mortgage amounts are public information anyway, so it's no invasion of privacy.

How about:

Open Bids - to guard against false offers

Mortgages cannot be sold or securitized - to force lenders to use prudent borrower standards, since the original loan creator will be on the hook for default

Houses must have at least a 15% down payment = to prevent the "nothing down" bubbling and promote true affordability

No fees can be put into the mortgage - this will put a brake on junk fees and broker commissions, as they will be real out of pocket money and not just "a few bucks a month."

These policies would result in lower prices, lower rents, and lower home debt. Other parts of the economy would benefit from the money freed up from house expense. All at the expense of banking and Wall St.

I like all of those ideas.
I wonder though, wouldn't the buying and selling of safe/correct/honest mortgages be ok with proper lending rules in place durring their creation?

Bap33 says

I wonder though, wouldn’t the buying and selling of safe/correct/honest mortgages be ok with proper lending rules in place durring their creation?

True, but if you cannot pass off the loan to a mark, you will not look for ways to bend those rules.

I wonder use of floating ideas here on forum as no one from Congress is listening to us, thought of implementation of any such measure is not even worth dreaming..

If we hit the right nerve, and come up with a very simple and fair proposal that strikes people as the right thing to do, then it might take on a life of its own, as people start repeating it to each other. Then blogs will proliferate it, and then the mainstream press will pick it up.

Eventually someone will endorse it as part of his congressional campain, and others will see the popular support for it too and become supporters.

We just need the magic combination of words to get the ball rolling.

One more requirement for a really honest real estate market:

Sellers should be required to accept their asking price! Right now, they don't. They lie about what they'll accept just in the hopes of getting higher bids.

I called a townhome builder just now because I want to see which builders build a townhome with no vaulted ceilings (want to save on heating bills) and have energy efficient home especially when it's likely we'll be seeing $6/gallon gas in the future. Anyway, they're like are you going to buy now? I said no, waiting for the bottom to hit. They said, well I think it's here. I said well maybe so but there are going to be a lot of option ARMS reset now and in the future which is worse supposedly than the basic ARMS. I can't believe how many liars are out there including homeowners who think we're at the bottom!! These option ARMS, I believe, will have a big impact on the housing market. I'm just glad that I think time is on my side.

I don't understand this zeal to "own" a home RIGHT THIS MINUTE. Why must you people build your entire existences around getting into debt, especially with the collapse going on around you? Are you blind or just so insecure that you can't just rent for a while and wait for the real show to start? The tickets are still being sold and are still way overpriced, and the curtain is just barely off the floor. Just wait. You ain't seen nothing yet.

youngniceeyes says

I called a townhome builder just now because I want to see which builders build a townhome with no vaulted ceilings (want to save on heating bills) and have energy efficient home especially when it’s likely we’ll be seeing $6/gallon gas in the future. Anyway, they’re like are you going to buy now? I said no, waiting for the bottom to hit. They said, well I think it’s here. I said well maybe so but there are going to be a lot of option ARMS reset now and in the future which is worse supposedly than the basic ARMS. I can’t believe how many liars are out there including homeowners who think we’re at the bottom!! These option ARMS, I believe, will have a big impact on the housing market. I’m just glad that I think time is on my side.

There will be no bottom until 1) Unemployment heads back to 6 to 7% and 2) you stop hearing people talk about housing as investment.

chrisborden says

I don’t understand this zeal to “own” a home RIGHT THIS MINUTE. Why must you people build your entire existences around getting into debt, especially with the collapse going on around you? Are you blind or just so insecure that you can’t just rent for a while and wait for the real show to start? The tickets are still being sold and are still way overpriced, and the curtain is just barely off the floor. Just wait. You ain’t seen nothing yet.

It's pure psychology. The biggest part that plays into owning is the mentality that rent is throwing away the money as opposed to building the equity.

"A SF Redfin agent respond to our offer request Monday around noon with the disclosures, and gave me an estimate of 635k-655k, and stated the seller’s agent is expecting multiple offers so we should bid at the higher end of the range. Although I personally think the house worth about 635k with everything considered, I still went with her advise and bid 650k, just to make everyone happy and to get this home buying thing over with. At the time we submitted the offer, I am reasonably confident that we will win the bid. As a side note, the term is: as is, 7/14 days inspection/financial contingincy with 250k down."

That my friend is a big mistake. At some places, zillow low value might come close. Redfin lists the median 440$/sqft for the zip and that makes this house worth 550K. For the lot size, you could give another 25K, but considering the decline in prices for the next 2 years, I would realistically offer around 475K. But, the problem is none of the realtor would even write that offer.

big mistake? Oh, I beg to differ ... that is an Exxon Valdes mistake. A Columbia Space Shuttle mistake. FUBAR alert, FUBAR alert.

Edmond Fitzgerald
Heindenburg
New Coke
Ford Pinto
.... this purchace idea falls into this list .....

Speaking of mistakes, the prior post contains some: It is Exxon VALDEZ, HINDENBERG and the EDMUND Fitzgerald. Don't people check their facts?

chrisborden says

I don’t understand this zeal to “own” a home RIGHT THIS MINUTE.

It's politically incorrect, but I know from experience that there is a switch in the brain of most women which turns on when they first get pregnant and MAKES them want a house. The feel they must have a house for their baby, NOW.

Just biology, but responsible for a lot of debt. Maybe for most mortgage debt.

Everything about real estate, from greedy agents to the "I gotta have it right now" syndrome is designed for one thing and for one thing only: TO GET FOOLS INTO DEBT AND KEEP THEM THERE. It is obvious that is why the government bails out Wall Street and is trying its best to reinflate the debt bubble. If it is biology, then this species truly is in major decline. But if money troubles are what folks want, then who am I to stop them?

Good ideas, all, but for starters, "voters" must stop re-electing incumbents who are beholden to banks and other vermin. Nothing will change unless we clean House and Senate. Do not vote for an incumbent, ever, regardless of how good you think he or she has done. The sole purpose of our "representatives" is to stay in office. They do not care about you. I know because I once attended a "town hall" meeting of my Bay Area congressman, and he refused to my face to answer some very difficult and straightforward (and civilly presented) questions about this whole real estate sham. I knew I had him on a hook, and he knew it too.