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Evil Buyers Display Extreme Cruelty to Distressed Sellers


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2007 Apr 17, 5:43am   34,459 views  547 comments

by HARM   ➕follow (0)   💰tip   ignore  

buyer eyeing seller

Sadistic, Greedy Buyers Toying with Sellers Like Cats with Prey*
Copyright © 2007 UnReality Times®. All Rights Reserved.
by David Lereah, Leslie Appleton-Young and John Karevoll

As the alleged real estate bear market enters its second year of hitting bottom, some buyers out there are clearly enjoying this one-time market aberration --perhaps a little too much. Is deriving sadistic glee from other peoples' suffering a nice thing to do? The Germans have a word for this: schadenfreude (and we all know what cruelty the Germans are capable of!).

According to Donald Parisi, president of the Realtor Association of the Fox Valley (IL), buyer cruelty is reaching grotesque proportions:

"Parisi said he believes ‘doom and gloom’ media coverage has hurt the market. 'We’ve seen some very ridiculous offers,' Parisi said. 'People shouldn’t be desperate … The problem is some buyers are out there just to take advantage of the marketplace.'"

This view is further clarified by Jim Fox, manager of Realty One in Canton, Ohio:

“As unrealistic, said Fox, are some would-be buyers; they expect sellers to practically give their homes away. ‘Some people, … they want us to help them steal a home,’ Fox said.”

Even more to the point than Mr. Parisi, Florida Realtorâ„¢ Becky Troutt gets right to the heart of the matter:

"I think some of the buyers are out for blood! ...There is a difference from 'getting a deal' and 'trying to get something for nothing'! Just because the market is slow right now and homes take longer to sell.....doesn't mean that sellers are going to give their homes away and it doesn't give you the right to go for the jugular vein! How insulted would you be if you were that seller and someone asked you to come down off your price $90,000? Do you think you would say...ok sure no problem. I'm not spinning my heels in mud with an unrealistic buyer who only wants to try and rip a seller off!"

A note to home buyers: If you only want to pay $200,000 for a home......don't look at homes that are $90,000 more than you want to spend or can afford just because it's a slow market, and you think you can get a seller down that much.....because....IT AIN'T GONNA HAPPEN!!!"

Now, that's telling 'em like it is, Becky!

While the unbridled greed and glee exhibited by these sadistic buyers (and the American Dreamâ„¢-hating press) are stomach-turning awful, they are not the primary causes of this upside-down market. The real culprit for this most unnatural and unhealthy market condition, is well understood in the industry:

"What appears to be driving the increase in foreclosures is that home values are not rising, DataQuick analyst Andrew LePage said. 'Take away home-price appreciation, or ratchet it down or even make prices negative, and all of those forms of (economic) distress start to result in increased foreclosure activity,' LePage said."

Clearly what's needed here is massive government intervention to protect homeowners and rekindle the normal 20%/year appreciation. This might take the form of a distressed homeowner mortgage buy-down, or federal underwriting for all the kindhearted subprime lenders who generously enabled low-income Americans participate in the American Dreamâ„¢ (often mischaracterized by Gloom'n'Doomers as a "bailout").

To proactively tackle this looming crisis, the NAR and CAR have teamed up with the MBAA (Mortgage Bankers Association of America) to sponsor the Save the American Dreamâ„¢ Act of 2007. Says NAR Chief Economist, David Lereah, "We are urging people to sign our online petition, and write, call, email and beg their Senators and Congresspersons to support this badly needed piece of mercy legislation. Home ownership is as American as apple pie --only you (and Uncle Sam) have the power to save it! Please do your patriotic duty and support the SADA. God bless."

[*Note: while the offset quotes and links are real, this 'article' is a parody]

#housing

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411   skibum   2007 Apr 18, 8:37am  

I’d really like to get some sort of passive income stream going on. Some of my coworkers own rental properties, but they bought them a long time ago - so it’s hard to compare.

eburbed,

As FAB has shown many times here by example, owing rental properties is in no way "passive income." The maintenance work involved, dealing with renting and tenants, that's all pretty darn active. My parents own several rental properties too (for decades), and I've been "asked" to help with the maintenance work throughout my youth. Nothing passive there.

413   DaBoss   2007 Apr 18, 8:38am  

"No boundaries. The economy is going to suck this year. I see all sorts of commercial for lease signs."

The economy will be OK, healthy profits this year so far. For lease signs have been around now for 6 years and not moving. City should rezone and add more homes off Central in SC to MT. so damn space wasted and plenty of builders ready to jump in.

You can expect rates to go up .... FED is still targeting the RE bubble.

414   DaBoss   2007 Apr 18, 8:43am  

skibum - I was as they say in the middle of the $4 Trillion Dollar B2B market. My company was valued at nearly $6 Billion dollars. There was
only 250 people there. Honestly we though our stock was manybe worth $20 bucks at best on a good day. Even us finance guys were wondering what Wall Street was smoking.

415   OO   2007 Apr 18, 8:50am  

Space Ace,

the FED is not targeting the housing bubble, the FED is busy savings its own ass. The FED has long departed from its initial mission statement - fighting inflation.

I bet you anything that the only possible action for FED right now is the stay put, while keeping the hawkish comment on inflation alive. People around the world are already finding out that FED won't do anything about inflation, all it can offer is lip service. Either late 2007 or early 2008, FED will start cutting rate.

I am looking forward to the day when FED starts cutting rate, that will be a lifetime opportunity for us to profit.

416   DaBoss   2007 Apr 18, 8:52am  

"20 bil. Freddie bail-out?"

Dinor - they are extending 30 years to 50 years and giving 5% discount on montly payments. This is after it goes up 35% So instead of
paying 3x price after 30 years you get 4-5x price after 50 years.

What did the Economist call this The new Serfdom ... picture of peasent caring a home on his back...Financial Slavery... give me break...

417   HARM   2007 Apr 18, 9:02am  

@Mark,

Ha. She's deleted every post, including the non-combative ones (incl. mine). Oh well, it's her blog to do with as she pleases.

Y'know, I just noticed that EVERY thread on her blog has "0 comments". Hmmm... is she really that unpopular or just intolerant of dissenting opinions?

418   e   2007 Apr 18, 9:10am  

As FAB has shown many times here by example, owing rental properties is in no way “passive income.” The maintenance work involved, dealing with renting and tenants, that’s all pretty darn active.

I think my colleagues own places in Arizona - so i don't think they're actually going there to manage the properties.

Do property management companies take a big bite via fees?

419   e   2007 Apr 18, 9:11am  

People around the world are already finding out that FED won’t do anything about inflation, all it can offer is lip service. Either late 2007 or early 2008, FED will start cutting rate.

If the fed can only give lip service and not raise rates, then why would they cut rates?

420   e   2007 Apr 18, 9:12am  

http://www.mercurynews.com/realestatenews/ci_5459903?nclick_check=1

Man, there's a lot of sales from "Somename Trust" to "Average Joe".

421   hugel   2007 Apr 18, 9:13am  

OO,

I also believe FED want to bail themselves out badly but the real question is if there is room for them to cut rates further.
Wouldn't that make the dollar plunge even further and hurt the fiat currency system?
Also, if you don't mind me asking, how will you profit from that? Gold?

422   Peter P   2007 Apr 18, 9:15am  

Man, there’s a lot of sales from “Somename Trust” to “Average Joe”.

It is not uncommon for people of moderate means to place properties under revocable living trusts. I think it is more of an estate planning thing.

I am not an expert.

Not estate planning advice.

423   HeadSet   2007 Apr 18, 9:16am  

eburbed,

Were you talking passive income in the tax sense, in that you have other passive income you need a corresponding write off for?

I only deal with single family homes, and screen my tenants well. So far I have been lucky (compared to others) in the "toilets and tenants" aspect. However, I only have one rental at this time. I sold the other 4 during the housing bubble, since the prices went to absurd highs and anyone with good credit wanted to jump on the buy bandwagon and not rent. I put all that cash into Treasuries and 6% Credit Union accounts, waiting for the right time to buy again.

If you are going to buy rentals in CA, you may have to wait awhile for the prices to fall low enough for you to buy such that rent will cover enough of the mortgage. It will happen. I've been around long enough to see crashes in Texas, Denver, Boston, DC, ABQ, Phoenix, Omaha, Florida, and Virginia. But maybe the SF Bay area is different......

424   e   2007 Apr 18, 9:17am  

It is not uncommon for people of moderate means to place properties under revocable living trusts. I think it is more of an estate planning thing.

Hm, the words "revocable living trust" was never in my vocabulary. Are these just big tax shelters or something?

425   Malcolm   2007 Apr 18, 9:18am  

Do property management companies take a big bite via fees?

Not too much, normally 5-10% monthly rent per unit. Obviously the more units, the less they charge. I always chose to manage my own just because on a month to month basis they basically mail your mortgage payment in. I use eviction services for evictions which is all a manger would do anyway.

426   HARM   2007 Apr 18, 9:19am  

If the fed can only give lip service and not raise rates, then why would they cut rates?

Because the Fed --and Congress-- just loves asset bubbles and (stealth) inflation. Anything to help keep the economy lookin' good and assist in deflating those Twin Towers of Terror: The National Debt & future Medicare/SS obligations. Of course, cutting rates will also help bail out FBs and lenders, or at the very least, slow the bleeding.

427   Peter P   2007 Apr 18, 9:19am  

Are these just big tax shelters or something?

Not necessary. But AFAIK properties under these trusts are non-probate.

I am not a lawyer.

428   e   2007 Apr 18, 9:19am  

Were you talking passive income in the tax sense, in that you have other passive income you need a corresponding write off for?

No, I'm just looking for passive income for... passive income. Being a worker bee at a Fortune 500 company isn't really going to get me and my future family where I want to be.

And my luck w/stock options has been the complete opposite of SP's Sun/Yahoo/Google friend.

429   Malcolm   2007 Apr 18, 9:19am  

You avoid probate fees, that's about it since pretty much the inheritance tax is no longer being charged on most estates.

430   Different Sean   2007 Apr 18, 9:21am  

viamently hee hee

431   Peter P   2007 Apr 18, 9:22am  

I think the process of probate itself is scarier than its fees.

Estate Question:

If a wife murders her husband and then commits suicide, who survives who? :)

432   HARM   2007 Apr 18, 9:23am  

viably + vehemently = viamently

So he coined a new word, what's not to like? ;-)

433   HeadSet   2007 Apr 18, 9:33am  

a_k1947

Nice word play on the handle. I assume the 1947 is your birth year (since you are 60), but the a_k hits a note.

Is this a play with your real initials on the Soviet Kalishnikov 1947, aka AK-47?

434   Malcolm   2007 Apr 18, 9:33am  

Nice Harm. Criticize a typo from this morning. I'm the only one I know.

435   HARM   2007 Apr 18, 9:35am  

@Malcolm,

Hey now --it was Different Sean who pointed it out, not me!

436   Malcolm   2007 Apr 18, 9:37am  

How would you even know what he was talking about. I had to scroll up to see what you guys were talking about. Give me a break.

437   HARM   2007 Apr 18, 9:40am  

I did a page search just like you. Sheesh, why do I have to be the bad guy?

438   Malcolm   2007 Apr 18, 9:41am  

Just seems tacky to me.

439   HARM   2007 Apr 18, 9:43am  

I'm truly sorry. I make *plenty* of typos, so should not be one to cast stones.

440   HeadSet   2007 Apr 18, 9:44am  

Malcolm,

With that incredible keyboard pugilism you demonstrated in this thread in your battle with those econ heavyweights, I think we can forgive a mispelled word.

I did not catch DS's intent either. I thought maybe "viamently hee hee" was some sort of Aussie giggle.

441   OO   2007 Apr 18, 9:45am  

Anthony,

If you agree that FED is just an extension of the government, then we all know what a government is most concerned with: social stability, which means employment rate. Be it aristocratic, totalitarian or democratic, a society with very high unemployment will upset the very foundation of a government, which is an organism with its own self-interest.

FED has painted itself into a corner. It really doesn't have much of a choice. Dollar's status as the world's reserve currency has been waning since the 60s, it is just a matter of time that as we keep going down this path, USD will just lose its dominating power, so it is not a scenario that the Americans are entirely unprepared for, psychologically. We were at a crossroad choosing between inflation and deflation, but so far, the signs are clear, we are choosing inflation. The real inflation rate, for anyone who shops at grocery markets and drives a car to work, is far beyond the published "core" rate. FED is no dummy, the last time I checked, the FED governors are living in the same country as I do, so they know what the real inflationary picture is.

The most ideal case for America is to devalue slowly, 5% a year maybe, so as not to upset the financial system in general, and bring on the impact of a cheap USD to the US public gradually, while alleviating the real debt load of Americans. Let's face it, we are a debtor nation, each household in Amerca carries an average $9.8K credit card debt, much more in mortgage, and has a negative savings rate. We have a huge medicare and social security gap in the wake of baby boomer retirement. No democratic government is going to do anything (aka, choosing deflation and defending the dollar) to jeopardize the interest of its main constituents - debtors.

However, history has shown us that soft landing is hard. Landing in itself typically means hard landing. So while I recognize it is the wish of the FED to manage a soft landing for the dollar, I don't buy this scenario. Once the landslide starts, it is difficult to hold back and the market always overreacts in the short term.

If you believe in a seriously weakening dollar, parking your money anywhere outside of the dollar will benefit. While I am big on Euro, oil, agriculture, and gold as shorter-term bets as things are sorting themselves out, I am more bullish on US companies that will benefit from a weakening USD in the long-term. A weak dollar will rejuvenate lots of home-grown industries and most FBs and welfare deadbeats off their butt to start working again. I see a collapsing dollar as an essential step in the healing process.

442   HARM   2007 Apr 18, 9:47am  

Breaking news on the Virginia Tech shooter:

http://www.cnn.com/2007/US/04/18/vtech.shooting/index.html

CNN also learned Wednesday that in 2005 Cho was declared mentally ill by a Virginia special justice, who declared he was "an imminent danger" to himself, a court document states.

A temporary detention order from General District Court in the commonwealth of Virginia said Cho "presents an imminent danger to himself as a result of mental illness."

A box indicating that the subject "Presents an imminent danger to others as a result of mental illness" was not checked.

In another part of the form, Cho was described as "mentally ill and in need of hospitalization, and presents an imminent danger to self or others as a result of mental illness, or is so seriously mentally ill as to be substantially unable to care for self, and is incapable of volunteering or unwilling to volunteer for treatment."

Interesting to note that Virginia actually has some fairly stringent background checks on handguns compared to most other Southern states:

http://www.bradycampaign.org/legislation/state/viewstate.php?st=va#bgnd

BACKGROUND CHECK AT STATE LEVEL
Do state police perform a background check in addition to federal NICS check? Yes

Virginia: State law requires gun buyers to go through a state-based criminal background check in addition to the federal NICS check. This is the best system since it includes checking both state and federal records to prevent criminals and other prohibited people from buying guns. in 2000, 2,568 gun buyers failed the criminal background check and were stopped from buying guns.

ANTI-TRAFFICKING
Is there a one-handgun-per-month limit on gun sales? Yes

State law restricts gun-trafficking by limiting the number of handguns that can be purchased at one time. No more than one handgun may be purchased by a person within a 30-day period. This restriction on bulk-buying of handguns helps prevent gun traffickers from buying handguns at gun stores and reselling them on the street to criminals.

Basically, aside from banning firearm possession for people who have been declared mentally ill in the past but have no prior criminal record, I don't see what else the State of Virginia could have been expected to do to prevent this.

443   Malcolm   2007 Apr 18, 9:48am  

Headset, I was thinking the same thing. I typed in confrontation mode for about 3 hours and I have some clown pick out one misspelled word from the whole thing to ridicule?

444   Malcolm   2007 Apr 18, 9:49am  

But Harm, thanks.

445   HARM   2007 Apr 18, 9:51am  

Malcolm, you have my permission to pounce the next time I post a misspelling or eggcorn.

446   Malcolm   2007 Apr 18, 9:53am  

It's not you that irritated me. We're cool.

447   Peter P   2007 Apr 18, 9:53am  

I misspell all the time. But I am also able to brush off "attacks" against me easily.

448   Different Sean   2007 Apr 18, 9:54am  

Malcolm Says:
Nice Harm. Criticize a typo from this morning. I’m the only one I know.

I did it, it was me. Probably just my take on the preceding discussion full of sound and fury...

449   Peter P   2007 Apr 18, 9:56am  

Probably just my take on the preceding discussion full of sound and fury…

It signified nothing. :)

450   Malcolm   2007 Apr 18, 9:56am  

Guys it's not that big a deal, I just had a moment of irritation because, like I said, we had a hell of a discussion this morning and if all that comes out of it is scrutiny of one horrific spelling error that it is a small slap in the face. We're all ok, I didn't mean to overreact.

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