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Helpful Post-Bubble Negotiating Tips


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2006 Jun 6, 7:11am   11,656 views  204 comments

by HARM   ➕follow (0)   💰tip   ignore  

negotiating 101

DinOR said:

All of a sudden I’m not having much difficulty visualizing buyers asking their realtors “Don’t show me ANYTHING that was purchased in 2005".

Don’t show me anything purchased in 2004.
Don’t show me anything purchased after 2000!

After the few buyers that ARE out there actively seeking a home have kicked through one over priced shitbox after another they are going to have to draw the line! I mean from a pure practicality standpoint. My husband doesn’t get home from work until 6:00pm and we only have an hour before kids/dinner/homework etc. Please stop showing us these places where the seller is upside down and can’t afford to come down on price, unless! They are willing to negotiate a short sale. If not, please don’t waste our time and start showing us “pre-2002″ purchases or we’ll find someone that will.

Also:

Now I’m fully prepared to deal with all the grief so bring it on. Well what if a couple paid CASH in 2005 and just wants out? They’re entertaining all offers! O.K, I’m willing to allow that.

Well what if some couple bought in 1985 but have House ATM’d it to death? Couldn’t they owe more than the place is worth? Don’t know, don’t care. Since Surfer X has already well established that this person basically “re-purchased” their home, it would not qualify. Please don’t show it to me.

Robert Coté said:

I don’t see any reason to buy from someone upside down. They don’t have any room to negotiate and there’s going to be more lawyers and other bloodsucking beasts feeding off the carcass anyway. Much easier to find the unHELOCed bought in 1995 shabby fixer where the seller is happy to double their money and get out. All those “Buyer agrees to….” documents are sure to come back and bite you. No, I’ll take the nice empty nest couple who are happy to get a check at closing rather than the desperate conivers who are so upside down they have no morals left with which to deal honestly. The important thing to remember, everyone else takes money away from the table. The only money usually brought to the table is the buyer’s. Even now as the sellers are facing the prospect of bringing money to the table it isn’t the same as they are trying to stop the bleeding. No, I’ll deal with the smart, calm people instead thankyouverymuch.

Anyone else have a few gems to share?
HARM

#housing

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185   edvard   2006 Jun 8, 3:42am  

You can also cause a flourescent light to glow simply by dragging the tip over carpet or rubbing it quickly with a cotton rag. I'm not sure if the theory of holding a flourescent tube in the dark under powerlines is proof that there exsists a health hazard.

186   skibum   2006 Jun 8, 3:44am  

RE: The Fed, how about all this bear-a-licious news today! Dow down over 100pts so far, Fed #2 nominee Kohn with yet another anti-inflation talking point, and ECB, India, and Korea CB's all raising their interest rates. What's going on?

187   Peter P   2006 Jun 8, 3:48am  

I’m not sure if the theory of holding a flourescent tube in the dark under powerlines is proof that there exsists a health hazard.

I do not need proof. I can feel it.

Science is overrated.

188   Peter P   2006 Jun 8, 3:48am  

Gold is down though.

190   FRIFY   2006 Jun 8, 3:49am  

What’s going on?

The trap is closing on the ARM crowd who listened to Greenspan's financial advice. Bwahahahahaha!

191   skibum   2006 Jun 8, 3:57am  

FRIFY,
In all seriousness though, I doubt it's the ARM crowd driving the markets down. There may have been early sell-off due to rate hike concerns, but it seems like there's a bit of a snowball effect building, as everyone's getting the idea that it's time to sell??

192   HARM   2006 Jun 8, 4:00am  

DinOR Said:

Is it just possible that BB is his own man? Is it possible that while giving the nod to AG’s policies and posture that he held convictions of his own? Is there any chance that he saw a bubble when Greenspan could not? Is it entirely possible that he has no interest in “continuing the good work” started by AG?

Boy, would I love for this to be true! Before we start getting all worked up about BB becoming the next Volcker, though, may want to consider all the powerful forces/interests currently aligning against him and a strong-dollar policy:

--NAR/MBA cartels and their $bazillions in lobbyist & "consultant" mony in Washington.
--Congressmen up for re-election this year (100% of House, 33% Senate), who don't want a recession to mar this wonderful "Goldilocks economy" we're enjoying.
--An administration that proudly touts it's "ownership" society/record homedebtorship stats at every stump speech.
--A massive entrenched Federal bureaucracy that does not want to its Twin Monster entitlement program obligations (S.S. & Medicare) to grow any bigger in real terms, not to mention the interest paid on the National Debt, thanks to a rising dollar.

In the X-Files parlance, "I want to believe", however, "actions speak louder than words". We shall see...

193   FRIFY   2006 Jun 8, 4:03am  

DINOR,

Yeah, well their combined yield from Nov-May on new I-bonds was 6.7%. If you buy them now and the new inflation rate hits 3% (Bernanke's number) in Nov, their yield might spike even higher. Only a new house will convince me to cash in my early I-bonds with 3% fixed. With an anticipated X% leveraged drop in the house price that won't be happening anytime soon.

Don't forget, no state taxes on these guys (more important down here in Cali).

FYI - Etrade CDs (6mo) are at 5.21% I'm sure there's better out there if you shop around.

194   skibum   2006 Jun 8, 4:10am  

HARM,
I agree with you on this. There are many forces aligned against a BB inflation fighting/strong dollar stance. However, I'd be extremely interested in knowing how, if at all, the NAR/Corporate America and the like would be able to directly influence BB. Basically, I'm asking how truly independent is the Fed chairman? On the one hand, he can be fired relatively easily, it seems. And look at the (mostly Republican, ironically) pro-loose money types in the Senate banking committee, who have a large impact on who gets to be on the Fed board. On the other hand, BB has his own legacy to protect, and if he has any cajones, he wouldn't want to be remembered as the guy who let the inflation cat out of the bag under his watch. All very fascinating, imo.

195   FRIFY   2006 Jun 8, 4:10am  

Skibum,

I‘m not suggesting the ARM crowd is driving it. I'm suggesting that they're screwed.

I hope it's a coordinated effort by the world CBs to restrain the global housing bubble, but that's probably crazy-think.

196   skibum   2006 Jun 8, 4:18am  

FRIFY,
The world CB's may not be be targeting housing bubble per se, but it seems very plausible that they are coordinating an effort to terminate the credit bubble.

197   HARM   2006 Jun 8, 4:21am  

New thread: "Authorities Cannot Shut Down ‘Fake Appraiser Operations’ in Chicago"

198   DinOR   2006 Jun 8, 4:29am  

HARM,

I hear ya' with my BAD ear! The interest groups with a stake in this are mind boggling. What I should have said was BB seems to be finding some form of "inner guidance" and the conviction to follow it (to the degree that he can).

199   Randy H   2006 Jun 8, 4:49am  

JH,

The Economist is very bullish on Germany's potential and strength, but very critical of its structural deficiencies and unwillingness to deal with them.

They just had an article about Merkel giving in on tax increases, and how Germany is going to raise taxes at just the point when consumer confidence was starting to show some recovery.

"Real" unemployment in the US is probably about as understated as it is in Germany because they use a very similar methodology. If anything, most Western European nations understate unemployment even more because of work-week limitations that apply to a much larger public sector employee base.

Germany is linked intrinsically to the US because we are the primary consumers of their export trade. This is whey further EUR/USD appreciation poses a very serious threat to stability.

Unemployment is probably the ONLY thing that matters from a practical, political reality viewpoint. People will generally endure a lot of crap up to the point where they have nothing to do with their days. At that point they find something else to do with their days, like working hard to change the government that cost them their job.

200   FRIFY   2006 Jun 8, 5:17am  

ITS A TRAP!

FRIFY hunts desperately for CB/Death Star analogy joke and finds nothing but used kleenix and costume jewerly...

201   OO   2006 Jun 8, 10:01am  

No, BB won't be Volcker, and that's what I am betting on (god helps my portfolio if he turns out to be a Volcker).

The market is now fully priced in for the June 25-50bps raise. If the raise is 25 bps, the market will already be in a rejoice mode. Gold has held up quite well, still up from the beginning of the year under such distressing news (for gold), and significantly up from last year. Oil holding up nicely and we still have two critical points to pass, the hurricane season, and the winter (if it turns out to be normal rather than warmer than usual like last year, if it turns out to be colder, pay day for energy investors). US needs to raise to at least 8% at this point to break gold and oil. But US economy will already be in shambles if we go near 6%.

IMF already came out to say that Japan should rethink about stopping its ZIRP so fast, ECB is coming out to say they don't like Euro going above 1.3 (competitive currency devaluation anyone?), and BB will have no choice but to pause beyond June.

If things continue to get ugly, I predict no rate raise in June. Then gold and oil will be happily back on the rise again.

202   Randy H   2006 Jun 9, 5:29am  

JH,

The government costs jobs because of what is called structural unemployment. Purely speaking, every single labor law and every single government job creates a degree of structural unemployment.

Much of this is good and necessary. We need to employ people to run the government. We need labor laws to keep from returning to the early Industrial era.

But it comes at the cost of labor flexibility. There is a balance; a trade-off. Most Western European countries, especially Germany, have traded a lot more "free market" caused unemployment for structural unemployment. This keeps people happier for a long time, but causes exaggerated economic strife during times of painful restructuring. So they suffer a lot of pain every few decades, we suffer constant pain but at a lower level.

The US has much less real unemployment than Germany. Their counter would be that the US has more underemployment, and that this is not any better. I don't have an opinion other than pointing to the US' dramatically more flexible labor, business, and market environment. It is this which will probably save us from the coming demographic crunch (by save us I mean the US won't fundamentally be changed politically by it), whereas Germany et. al. will likely be barely recognizable after they swallow the demographic pill -- probably a function of poorly planned, unwanted but necessary immigration. This is already ripping parts of France apart.

As to my politics: I am "into" politics the same way Teddy Roosevelt was.

203   Different Sean   2006 Jun 9, 2:10pm  

This is already ripping parts of France apart.

France is always being ripped apart, it's what they do best. They love it.

204   Randy H   2006 Jun 9, 2:33pm  

DS

The French are a paradox unto themselves.

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