patrick.net

Just who could this be aimed at?

Not only that... if everyone is priced out, no one is.

I am totally priced out.

Another Quote, from a Mill Valley realtor in Tam Valley, on a rare sunny day with no wind or fog:

"You just can't beat the weather here! That's part of the appeal of Mill Valley!"

It’s either too expensive or too dangerous, and often both.

Of course one will instead live in Virginia.

Food in DC is not the best though. NY and Boston have much better food.

Favorite realtor quote from a couple of months ago re Boise, Idaho houses:

"You are losing $50,000 per year by not buying a house right now"

Another Quote, from a Mill Valley realtor in Tam Valley, on a rare sunny day with no wind or fog:

“You just can’t beat the weather here! That’s part of the appeal of Mill Valley!”

I am sure you can find a day to say the same for Portland, OR.

I've got a quote for you, this is from the largest homebuilder in the land, a real classic :

"As I've said to all our salespeople, if a buyer is warm and has a pulse, we want to put them on paper." -DR Horton CEO

This is at the very bottom of the link.

http://p287.news.mud.yahoo.com/s/nm/20070419/bs_nm/drhorton_results_dc

We should play a game in a later thread. The basic idea will be "see how big of a lie you can solicit from a realtor". We'll maybe come up with some kind of a prize for the winner, at least a "virtual" prize.

Perhaps we should do it and name the lying realtors.

We’ll maybe come up with some kind of a prize for the winner, at least a “virtual” prize.

Something like a Second Life sushi gift certificate?

I was actually thinking of asking Patrick for the rights to sell Second Life ball caps with his logo on the front. I'd give one of those to the winner.

This weekend my wife and I were looking at a house, and I asked the realtor to see the reports she had on the house.

The report said the subarea had damp spots in it when they inspected it, with no signs of plumbing leakage, and that likely it was ground water.

I told my wife "The report says there are drainage issues with the house. We'd have to do something about that." The realtor said "The report doesn't say that!" I said "It says the subarea was noticibly wet. That sounds like drainage issues." She said "Well, they did the inspection in March when all that rain was going on." Okaaaaay....

Then I said "The roof needs to be replaced" and the realtor said "Oh, it just needs a few patches! It still has a few years left in it." I said "The inspection report says you can see daylight through it in the attic. It's wood shingling with moss growing in a majority of it, and all of it spitting from wear. It needs replacing."

The best part of the house was the oval-rug shaped section of wood floor that was so moisture damaged that the boards had cupped, stained, and seperated. I asked her what the deal with that was, and she said the owner didn't know, but she had kept a rug there for years that her dogs liked to sleep on.

Apparently they liked to pee there, too. A lot. For years.

Gross.

Randy H Says:

> We should play a game in a later thread. The
> basic idea will be “see how big of a lie you can
> solicit from a realtor”.

As I have mentioned I try not to talk about real estate in a social setting but this weekend I heard a Realtor say “California Real Estate has Never gone Down in Value” and I couldn’t ignore it.

I leaned over and said “You might want to do some research before you say that California Real Estate has “Never” gone down in value. Values were way down in 1993 when I lost my life savings”…

EBguy - I'd be very interested to hear how the solar installation goes.

As time goes on the husband and I are getting more and more interested in finding a small unremodelled SFR, gutting it, and putting in full insluation, double-glazed windows and trying to run it on solar. If you have links to any organisiations, products or builders, I'd love to see them.

A friend of ours just installed a solar powered water heater for his pool, and says, despite the hefty intial cost (around $9K), he's reckoning on breaking even in a couple of years. Sadly, the huge cost of installing it for all power in the main house ($35K - $40K) stopped him from doing a complete refit, but hopes to do it in bits and pieces over the coming years.

I have to say that it amazes me in a place like SoCal that so liitle has been made of using solar power. I looked on my trusty ZipRealty search in Westside L.A for solar houses, and there were 2 - count them, 2! - out of over 2000 houses for sale.

Irony of ironies, then, that Germany leads the world in solar power use, with a cloud cover equal or exceeding that of the murky, twilit UK.

I leaned over and said “You might want to do some research before you say that California Real Estate has “Never” gone down in value. Values were way down in 1993 when I lost my life savings”…

I'm a bit curious. Were you super leveraged in speculation or something? If you waited 10 years, wouldn't your life savings have reemerged?

SFBubbleBuyer Says:

> The best part of the house was the oval-rug shaped
> section of wood floor that was so moisture damaged
> that the boards had cupped, stained, and seperated.
> I asked her what the deal with that was, and she said
> the owner didn’t know, but she had kept a rug there for
> years that her dogs liked to sleep on.
> Apparently they liked to pee there, too. A lot. For years.

My parents have never allowed any pets (other than fish in small tanks) in their rentals, but years ago we had a lady that got a cat without asking.

The cat used to pee in one corner of the bedroom when she moved out:

We replaced the carpet (but on a hot day the pee smell came back)…

We replaced the tack strips (but on a hot day the pee smell came back)…

We then replaced the plywood floor (but on a hot day the pee smell came back)…

We finally got rid of the pee smell when we pulled up the new carpet pulled up the new tack strips pulled up the new plywood sub floor and cut out the portion of the wood floor joists that were soaked with cat pee and bolted in a new section…

FAB,

As a pet owner, I'm always annoyed at how hard to find a rental place for animals. As somebody who occasionally has to clean up after pets, I understand why people wouldn't want to rent to pet owners. I've seen some gross, gross stuff from lazy pet owners.

As somebody who occasionally has to clean up after pets, I understand why people wouldn’t want to rent to pet owners.

I still believe anything has a price. A 10% rent premium and/or double deposit should be reasonable.

The Gov of Oregon is doing something interesting:

http://www.cbsnews.com/stories/2007/04/23/politics/main2715513.shtml?source=RSSattr=HOME_2715513

Oregon Democratic Gov. Ted Kulongoski and his wife, attorney Mary Oberst, have enough money to get by and meals are generally no problem.

But things will be different this week.

This is Hunger Awareness Week in Oregon, and for the next seven days, Kulongoski and Oberst will be cutting way back – down to the budget one would live on if relying on food stamps – a diet they hope others will also follow for a few days to better understand the plight of those who have no choice.

They'll spend just $3 a day apiece on their meals, $42 in all, to match the amount spent by the average food stamp recipient in Oregon.

"I'm gonna probably go back to what I remember in college, Top Ramen and hot dogs," said Kulongoski.

Is he trying to shore up a base of FB's?

Peter,

You pretty much see that. People offering 'pets accepted' apartments/houses generally charge a higher rent than an identical unit, usually about 5-10%. And they usually have an extra 'pet deposit' on top of the regular deposit that's 5-10% higher.

And it should be that way. Most pet owners will clean up after their pets properly. Just like most parents will clean up after their kids. I'd be willing to bet landlords would love a 'kid deposit' and premium to make up for kid inflicted damage, but you can't get away with that. So instead it gets priced into everybody's rent. Many fewer people own pets, so the extra money we pay for rent subsidizes the lazy bastard pet owners.

FAB, I'd be willing to bet there were many more illegal pets in your parents units, but for the most part the owners cleaned up enough that there wasn't a problem.

eBurbed,

All they need to add is "using a HELOC to pick up escargo to top your Ramen with is considered cheating" and it'd fit right in.

I’d be willing to bet landlords would love a ‘kid deposit’ and premium to make up for kid inflicted damage, but you can’t get away with that.

We should lobby for that. Landlords should be able to charge any premium so long as it is fairly applied to all renters with the same conditions.

Peter, the problem happens when you can't legally charge a pet deposit. The normal two months is the maximum that you can charge for a deposit so you can't actually add more for a pet. I used to accept pets and that was nice for everyone because yes, I commanded a slight premium over comprable rentals. I have to say that I never had any significant pet damage in my units, and unless I have just put down new carpeting, I won't hesitate to rent to a pet owner who is solid in the other criteria. I used to charge a little extra deposit but that's because initial move in for my people was just first month, and the one month deposit so I would get a couple hundred extra, I don't know if that is a San Diego thing because I was never able to find someone with enough money to pay the last month's rent at move in.

After I wrote about losing my life savings eburbed asked:

> I’m a bit curious. Were you super leveraged in speculation
> or something?

The “highest” going in LTV was 75%...

> If you waited 10 years, wouldn’t your life
> savings have reemerged?

Yes, but when rents go down and vacancy goes up the negative cash flow is hard to deal with. Since I was on straight commission as an Apartment Broker I had no income and had to come up with $3-5K a month so I had to walk away. I was lucky that I had partners with deeper pockets who accepted my quitclaim deeds since I could not have sold the apartments for enough to pay off the debt…

Here's a mildly amusing quote from this realtor (TM):

http://www.paloaltorealestateinc.com/

RE: what to do before buying a home, they advise:

Review the article title "Don’t Buy a Car," and apply it to any major purchase that would create debt of any kind. This includes furniture, appliances, electronic equipment, jewelry, vacations, expensive weddings…

…and automobiles, of course.

Mkay...
So, I can understand not wanting to blemish your debt to income ratio before getting a loan approval. But, to suggest cutting back on everything from vacations to weddings?

I guess it's just advice to start living the FB lifestyle before you actually become an FB, just to get used to it!

I was never able to find someone with enough money to pay the last month’s rent at move in.

Yeah, until recently anyone with that much cash would have become a "homeowner" himself.

Peter, the problem happens when you can’t legally charge a pet deposit. The normal two months is the maximum that you can charge for a deposit so you can’t actually add more for a pet.

This is a problem too. Landlord should be able to charge any amount for deposit. It is all part of the price. No one is forced to rent a particular unit.

SFBB said:
All they need to add is “using a HELOC to pick up escargo to top your Ramen with is considered cheating” and it’d fit right in.
No need to HELOC for escargo. Just grab some snails from your neighbors garden. Really. Hows that for eating cheap.
http://www.sfgate.com/cgi-bin/article.cgi?file=/g/a/2003/05/05/urbananimal.DTL&type=printable

I do know of 4 acquaintances in the late 30s who did buy $2.5M+ homes in the last 3 years, all IB MDs, VC Partner and hedge fund managers. They are no "ordinary folks", they are all graduates from top-tier colleges and top-tier business schools, and work for top-tier banks / funds. I do have a doctor friend who went to UCSF for med school and has been practicing for more than 10 years, there is no way that he can possibly buy a $2.5M home, not even $1.5M.

But, here is the catch. I've always assumed that people buy $2M+ homes on cash. If I were to buy a $2M dollar home, I will make sure I have that much cash + a big chunk that will generate enough annuity to pay for the property tax. However, this is not the case for all of them. Two of them actually need a mortgage, although not a toxic one, I don't know about the mortgage situation for the other two. But this is for sure, if the two needing a mortgage has enough cash to buy, they would have bought with cash.

Even the creme de la creme need leverage for their trophy home.

># Randy H Says:
>April 23rd, 2007 at 11:20 am

>My favorite quote, from a realtor who’s trying to get us
>to bid on a home in Mill Valley (which we won’t because
>we want to leave Marin and it’s in the fog anyway):

>Prices were up nearly 3% in Mill Valley last year! That’s
>not bad in a year where the market is ‘adjusting’ and
>everyone’s full of gloom and doom! Where else
>could you earn 3%?

>Yea, where could I possibly have found a 3% return
>in 2006? It boggles the mind.

This is one of the biggest problems in my mind. Houses are places to live, not things to profit off of. If anything, they should depreciate as they age and deteriorate. The concept of "investing" in homes and the rampant speculation that it brings is at the heart of this whole mess.

What's more, society could stop demonizing renters.

Owning a home has many advantages, but it's not for everyone. Our glorification of homeownership as the American dream has turned tenants into second-class citizens.
Obviously, this is not a quote from a Realtor(TM), but from Kathleen Pender's SFGate.com article "Why we shouldn't be bailing out subprime lenders or borrowers" that SP pointed out in the last thread. JBRs of the world unite...

One hedge fund manager who went back to our class reunion bragged shamelessly about his newly acquired $3.5M mansion. He also wrote a $50K check to the school's endowment fund. Well, just about a couple of months ago, thanks to the increasingly transparent info available on the web, we found out that he carries a $1.8M mortgage on his mansion, and his wife works for a non-profit organization.

And, they can still do this on the side when the wall flowers get bored and ignored.

LOL! What is your take on trophy hunting? My wife thinks it is too cruel.

We do have a mountain goat head on our living room wall, but it is a stuffed animal.

I don't too many new ridiculous realtor quotes to share that I haven't already posted (see my Quotes that will live in Infamy & Evil Buyers threads). Personally, I've been avoiding them like the plague for the past couple years. However, I can name my top 5 Orwellian Realtor re-definitions:

Debt accumulation = “equity liberation”
Toxic loan = “affordability product”
Fraudulent liar = “victim”
Reckless speculator = “genius investor”
Refinance = “debt forgiveness”*

*This one was also a recent thread.

OO,

If the wife is working for a nonprofit, I seriously doubt it is for the money. Just something to do all day.

And I wouldn't read too much into the $1.8M mortgage. Maybe the hedge fund guy just has better uses for his cash than paying down a mortgage. A 50% equity stake is still quite conservative. If he can do better than 6% or so on his investments, then it is probably better to take out the mortgage and invest the cash.

http://tinyurl.com/396cxe

“As subprime loans reset and real estate markets have cooled, a reformed FHA would be perfectly positioned to offer borrowers a safer mortgage alternative and help bring stability to local markets and local economies,” said Iona Harrison, a REALTOR® from Maryland who spoke on behalf of NAR.

NAR: Stronger FHA Vital

Increasing FHA mortgage loan limits would help first-time home buyers, minorities, and others who can’t qualify for conventional mortgages, NAR says. It also would help people living in high cost areas because the current low FHA limits make the program unusable.

“Increasing the loan limits can help firefighters, teachers and police officers buy a home in the communities they protect and educate,” Harrison said. Eliminating the 3 percent minimum down payment can also have positive results for many of these home buyers."

Eliminating the 3 percent minimum down? If you can't put down 3%, are you really ready to buy a house?

“Increasing the loan limits can help firefighters, teachers and police officers buy a home in the communities they protect and educate,”

If these people cannot buy, it is not the market that has failed them. It is NIBMYism that has failed the market.

Kurt,

Maybe counting is not too important in Zen Buddhism (though even there, the numbers are quite important symbolically), but I assure you that it is important in most forms of Buddhism. Non-attachment is not the goal of most Buddhist practitioners. The ledger accounting is built into a merit based belief system that believes in reincarnation. If you hadn't noticed the importance of numbers in Buddhism, you might try looking for it.

BTW, the most "devout" Mainland Chinese Buddhists are highly successful Communist cadres praying for specific things in this life and old ladies praying to be reborn as a male or for grandchildren or for money.

Of the 4 IB/VC/HF sorts we're family friends with, I'm pretty sure at least 3 of them have quite a bit of mortgage on their 3m+ homes, and the other has a wealth manager (the VC) so he may have a mortgage too.

As Glenn said, they can do better things with the money. Someone in an earlier thread said that _rich_ people don't use/have debt. That is categorically false. It would be better worded _rich_ people don't *need* debt. But they use it all the time as a portfolio balancing mechanism.

ie, If you're my North Bay hedge fund manager friend (who incidentally is from the Midwest also, met his wife in college, and is still happily married to her with 2 children sixteen years later) and you just bought a 3.5m-ish home in Tiburon, you _could_ have paid cash but you won't being that interest rates are so low and you're going to earn 3x the return on prepaid debt in arguably safer vehicles. But if you'd pull the records and see a $2m mortgage you'd be tempted to say "FB! FB!".

On a smaller scale this is why we bought my wife's Audi using 100% financing 2 years ago, on a 3 year loan @ 0.9%. When people are willing to _give me money_ for free, I'll take the cash and put it into a CD for 3 years.

@DP,

You are missing the point --Iona is our fiend, er, "friend". She is trying to get the FHA to start offering "affordability products" so everyone can share in the new "wealth".

GC,

How would you explain the celebutant phenomena. Those little Hiltons and Johnsons have had their money for quite a few generations.

I also knew people who took out the maximum in Stafford loans to pay for grad school, even though they either didn't need the money at all, or their company was reimbursing for tuition. They just took the student loans and stuck it into vehicles returning double the rate.