Weekend Open Discussion

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing bubble, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

This post will remain at the top of the page during the weekend, any new posts will be displayed below.

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140 Responses to Weekend Open Discussion

  1. James Bednar says:

    chicagofinance Says:
    January 26th, 2007 at 10:17 pm
    Mortgage-Default Risks Rattle Bond Investors
    January 27, 2007

    The bond market is signaling heightened fears about the ability of America’s more financially stretched borrowers to keep up their mortgage payments.

    The weak U.S. housing market has cut the value of some homes to below the amount the owners owe on their mortgages, making them prone to default. The risk is showing up in the subprime-mortgage market, which serves borrowers with the worst credit histories. Default rates in this market are rising. Meanwhile, hopes that the Federal Reserve would cut interest rates soon, easing pressure on borrowers, have faded in recent days.

    Wall Street’s worry about mortgage defaults is showing up in a set of indexes called ABX-HE, administered by Markit Group Ltd. These indexes track the cost of using financial contracts known as credit default swaps to buy insurance against defaults on securities backed by subprime mortgages.

    Friday afternoon, the ABX-HE 06-2 index for buying protection on low-rated, or BBB-minus, subprime mortgage bonds stood at 90.34, down from 95.25 at the end of December and 98.2 at the end of November. It was the lowest level since this version of the index began trading in July. A decline signals that sellers of these insurance contracts are demanding larger payments to compensate for what they see as a higher risk of mortgage defaults, which would reduce the value of mortgage securities.

    The turmoil is notable because credit markets otherwise look stable. Treasury bond yields remain low and capital is abundant for corporate borrowers.

    Mark Adelson, head of structured-finance research at Nomura Securities International Inc. in New York, said the market is “worried about the potential of an approaching storm.” He said weak home-sales numbers reported Thursday were one immediate cause of the latest downward lurch in the ABX indexes.

    “There has been a wake-up call this month,” says Alan Fournier, managing member of Pennant Capital Management LLC, a hedge-fund manager based in Chatham, N.J. Mr. Fournier says his firm has been buying protection against subprime-mortgage defaults since mid-2006. Hedge funds are believed to have been among the big buyers of this protection, a way of betting that defaults will increase.

    At the end of 2006, borrowers were two months or more behind in payments on nearly 6% of the subprime home loans packaged into mortgage securities last year, according to David Liu, a mortgage analyst at UBS AG in New York. The first-year delinquency rate was about three times the rate on such loans packaged in 2003 and 2004, when home prices were soaring.

    When home prices are rising rapidly, people who fall behind on their loans often can sell their houses for enough money to pay off their debt or else refinance into a less costly loan. In a weak housing market, it becomes harder to sell homes quickly or refinance. More people lose their homes to foreclosure.

    Mr. Liu says many subprime lenders, faced with slowing demand and shrinking profit margins, tried to maintain volume by making riskier loans even as the housing market was faltering in late 2005 and 2006. Many borrowers with relatively low credit scores were able to borrow as much as 95% or 100% of the home’s estimated value without having to provide pay stubs and tax documents to prove how much money they make.

  2. James Bednar says:

    MarkIt makes the ABX Index pricing available on their website.


  3. Curious George says:

    Just signed a contract on 4BR, 3BTH house in River Vale, NJ, listed 599k, mulitple offers, 580k contract price. House is a hi ranch, big lot, quiet residential street in the north part of town, needs updates to kitchens and bathrooms. From what I can tell and compared to everything else I saw, this house was priced right to move. However, given the bearish view of housing on this blog, I’m wondering if this is a good or bad move. I had a townhouse in Ramsey just a year ago, which I bought 375k in 9/03 and sold 4/06 for 525k. I’ve rented the last year, but my wife is pregnant with twins and we have a three year old so we need some more space and are thinking about good schools. Would love to hear some thoughts.

  4. AntiTrump says:

    Curious George:

    I don’t know the River Vale mkt, but if the most important thing is that you like the house and can afford the mortgage without resorting to some fancy one month adjustable mortgage. I personally think a 5 or 7 year ARM is fine as many people move in the first 5 to 7 years. A good way to see what you paid is to find comp prices from around that street in year 2000 or 2001 and tack on about 30% and add a premium if you really like the house. You agent can help you with that or you can search online for some web sites that give you the price.

    Since you have pulled the trigger, I suggest you just enjoy the house rather than figuring out if you overpaid. Then you will spend the rest of your life on this blog like this Richard chap trying to justify to yourself your decision. No need for all that, like I said, if you can afford the house enjoy it.

    Good luck !

  5. AntiTrump says:

    From Today’s NY Times:

    “RENÉE MIZRAHI suspects that the first real estate agent she worked with deliberately didn’t tell her that a building was only 49 percent owner-occupied.

    Her bank subsequently refused to give her a mortgage, and she lost the apartment.

    Her second broker was worse. He stood her up at an apartment showing, she said, and he lied about the building’s financial requirements and about having put in her bid for the co-op. Then when she told him that she didn’t want to work with him anymore, he kept calling her — she has caller ID — and hanging up without leaving a message. “So he was like stalking me,” Ms. Mizrahi said. “What a nightmare!”

    She is now working with a broker, referred by a friend, with whom she feels comfortable, but her bad broker experiences have nonetheless made her wonder if any broker can really be trusted. “I just want to work with someone who shows up when they say they will and who will tell me the information I need,” she said. “Why is this so hard?””

  6. njrebear says:

    Why you should pay an annual credit-card fee


    a Senate Banking Committee hearing examining credit card practices this week, one consumer advocate suggested those who pay their balances in full every month (about half of all cardholders) should pay a small annual fee to credit card companies.

    Those who carry balances on which they pay interest and fees are subsidizing cardholders with no revolving balance who may even be in rewards programs, said lawyer Michael Donavan.

  7. AntiTrump says:

    more from nytimes:

    Ms. Mizrahi is not alone in her hard-earned broker wariness.

    A Harris poll conducted last year that ranked occupations in terms of prestige placed real estate brokers at the very bottom of a list of 23 professions. (Firefighters and doctors were at the top.)

    Brokers themselves seem well aware that their business isn’t always held in very high regard. The National Association of Realtors has an advertising campaign called “Someone You Can Trust,” which stresses that Realtors are subject to mandatory ethics training. “Not many professionals can claim that on their résumé,” the ads read.

    Svetlana Choi, a senior sales associate at Bellmarc Realty, estimated that at least a quarter of her clients are skeptical when they first come to her.

    “I just try to draw them out and relate to them in a way that lets them know that I’m not the enemy,” she said. “I’m not trying to snow them. I’m really just trying to be helpful.”

    So why do people often have trouble trusting a broker?

    To start with, brokers are salespeople, so buyers with suspicious minds would naturally suspect brokers of trying to sell them something they don’t necessarily want or need. But brokers also admit that some real estate agents help to perpetuate stereotypes with classic bait-and-switch schemes and by putting their own desires to close a deal over a client’s best interests. The fact that brokers themselves sometimes find it hard to trust one another only compounds the level of suspicion in real estate.

    There are two major sources of broker-to-broker mistrust. The first is the fear that one broker may be trying to poach another’s client. The second is that a seller’s broker may be deliberately avoiding phone calls or refusing to submit an offer because he or she wants to avoid having to share the commission. The cynicism may well stem from the fiercely competitive marketplace and the fact that there are more than 28,700 brokers and sales agents in Manhattan alone and 66,700 in all five boroughs.

  8. AntiTrump says:

    And then some more;

    Erik Serras, a sales agent at Pari Passu Realty in Manhattan, said another agent recently stood outside an open house that Mr. Serras was holding just to hand out his business card. “It was the equivalent of ambulance chasing, and it sheds a negative light on the industry on the whole,” he said. “There are just too many untrained agents out there doing things that are unethical and unprofessional, and once a client is exposed to that, the damage is done because it’s easy for people to generalize.”

    Ann Rothman, a Bellmarc agent, said that some people were quick to judge brokers because they “just have a queasy feeling about real estate.” She added that she sometimes finds herself saying, “I do real estate, so yes, I sell used cars, and people are going to think the speedometer has been changed.”

    But Ms. Rothman tries to be philosophical about it. “Any person in a service business is going to be up against that,” she said. “Even if you go to a doctor or a dentist, there are going to be people who think they’re only doing a procedure because they have their kid’s college education or a trip to finance.”

    When she comes across skeptical clients, Ms. Rothman said, “I’ll bring it up, and I’ll say, ‘What’s the problem here?’ ” That seems to work, she added, citing as proof an entire family of doubting buyers. “They all have a distrust gene,” she said, “but they keep referring other family members to me.”

    Another instance when a broker might appear to be evasive is at an open house. When brokers hold open houses, they represent the sellers, but they also routinely use the events as an opportunity to pick up other clients. So if a potential buyer walks in and doesn’t seem right for that particular apartment, the broker can offer to help the buyer find something else. But under the unwritten rules of the game, the broker does not have to disclose whether there are any other open houses in the same building, particularly if the events are being held by competing firms.

    These kinds of situations can easily lead to mistrust on the part of sellers and buyers alike.

  9. AntiTrump says:

    And then:

    Managers at real estate agencies say that the only way to minimize misunderstandings is to train new agents to be highly professional and to establish and enforce industry standards. To that end, the Real Estate Board of New York has established a list of 17 resolutions aimed at addressing ethical questions in residential real estate.

    The resolutions cover issues as basic as the definition of an “exclusive” and the need to have backup brokers available when the exclusive broker is not available. They also try to cut down on typical broker squabbles by declaring it improper to foist a business card on someone else’s client and asserting that brokers should give co-brokers and their customers at least 20 minutes’ grace time if they’re late for an appointment.

    Diane Ramirez, the president of Halstead Property and a governor of the real estate board, said, “Some of these things may seem silly, but it creates a framework of proper decorum.”

    The board and its policies have evolved to make it clearer that “we are an industry that works for our sellers and buyers, and that should be our primary goal,” Ms. Ramirez said. “That’s the only way to dispel the distrust that comes in, not because it’s earned but because of what our reputation may have been.”

  10. AntiTrump says:

    In the nytimes about realtor ethics;

    The real estate board also has an ethics committee that handles complaints filed by brokers against other brokers. Stephen Kliegerman, Halstead’s executive director for development marketing and a former chairman of the ethics committee, said the committee handles only a handful of cases each year, but he added that most complaints do not get to the board because agency managers tend to resolve complaints among themselves.

    One of the biggest current complaints involves brokers who post listings on their Web sites for the exclusive properties of other brokers. “They’ll advertise a property they don’t represent, or sometimes the property doesn’t even exist,” Mr. Kliegerman said. “So when the buyer calls, it’s a bait-and-switch — the broker knows nothing about the property and winds up trying to take them to something completely different.”

    He said the ethics committee is developing a new resolution to deal with the problem. “This kind of thing happens daily, and it taints the consumer’s impression of the entire broker community,” he said.

    Consumers can file complaints about real estate agents with the Department of State in New York, the Real Estate Commission in New Jersey and the Department of Consumer Protection in Connecticut.

    The New York Department of State can punish agents for infractions ranging from practicing without a license to a catchall category labeled “untrustworthiness and incompetency.” The latter can include things like lying about the school district for a particular address or misleading a buyer about future development in the area.

    If the number of complaints filed in New York in recent years is any indication, brokers may actually be becoming more trustworthy. From 2001 to 2005, the last year with complete statistics, the annual number of complaints declined from 1,589 to 1,176.

    The complaint category that showed the sharpest drop and that accounts for most of the decline was in “agency disclosure,” indicating that real estate agents have gotten better at disclosing whether they are a seller’s broker or buyer’s broker and what that means in terms of where their loyalty lies.

    Of the completed cases from 2005, 109 real estate agents were fined, 3 had their licenses suspended, and 14 had their licenses revoked. Fines can run as high as $1,000, and suspension periods are determined on a case-by-case basis.

    But most ethical breaches probably never reach either the real estate board or the Department of State. Ms. Rothman of Bellmarc recalled a case in which she represented a buyer who made an all-cash, full-price offer on an apartment, only to have the seller’s agent stall and falsely claim that the sellers wanted time to consider the offer.

    “I later found out that he was waiting for a customer of his own to make an offer and he never even told the sellers about my offer,” she said. She filed a complaint with the other agent’s manager, and her buyers eventually got the apartment.

    When training new agents, larger real estate companies stress the need for proper broker etiquette, both with clients and with other brokers.

    Vasco Da Silva, the director of sales at Halstead’s Riverdale office, says Halstead’s broker boot camp tells agents when they should keep their business cards in their pockets, advises them to turn off cellphones while showing an apartment and instructs them never to talk about an apartment inside an elevator if there are other people around.

    “We go through a logical step-by-step process, and it’s all about winning a customer’s loyalty and trust,” he said. “You don’t get it with your first meeting, so what you have to do is win your customers over with service and with confidence in your ability.”

    In its training, Bellmarc urges new agents to be as straightforward as possible and to avoid pushing an apartment on a reluctant customer. “If someone doesn’t want an apartment, you don’t want to try to talk them into it,” said Janice Silver, an executive vice president at Bellmarc. “You can’t say, ‘But it’s fabulous — here’s why you should buy it.’ ”

    Instead, she trains agents to ask simple questions like: Do you like this apartment? Can you see yourself living here? Do you want to buy this?

    “Don’t be pushy, but be very direct,” she said. “Because if they don’t like the apartment, you should move on and not waste everybody’s time.”

    Some brokers say their colleagues should not try to hide a property’s blemishes. Jill Sloane, a senior vice president at Halstead who is Ms. Mizrahi’s new broker, said she once represented a seller whose apartment came with a 33 percent flip tax, and she made a point of including that in her advertising materials.

    “There was no point in hiding something like that because buyers would eventually find out about it anyway,” she said. “It’s just not worth the damage it would do to your reputation to be deceptive.”

  11. AntiTrump says:

    Finally some comments from Patricia Warburg Cliff in the nytimes:

    Patricia Warburg Cliff, a senior vice president of the Corcoran Group, agreed. “If I know that there’s a bus that idles under the living room window, I have to get it out first thing,” she said. “Because if a buyer finds out about it midway into a transaction, you have egg all over your face, and the seller isn’t served because they’re not out to swindle someone.”

    Sometimes, even when a transaction provides a happy ending for everyone, a buyer can still be left with lingering doubts about the broker and his or her motives.

    Take Rob and Lauren Mank, who are now happily living in an Upper West Side apartment they bought last year. Mr. Mank said they had no qualms about their agent, a buyers’ broker, until final negotiations, when she pushed them to offer the full asking price, which would have meant raising their bid by $45,000. They ultimately went up by $35,000 and got the apartment because two competing buyers did not raise their bids.

    “I felt like it was very high pressure and her loyalty to us was compromised by her desire to do the deal,” he said. “It left us with a bad taste.”

    But Ms. Mank said she didn’t believe there was any malice involved and noted that without a crystal ball, there is no way of knowing if they could have gotten the apartment for less.

    “Maybe you’re always going to want to blame someone for some infraction because you’re always going to feel taken advantage of in some way,” she said. “It’s a delicate and intimate situation because it’s your home and it’s your finances — the whole thing is just so fraught.”

  12. BC Bob says:

    “There has been a wake-up call this month,”

    Courtesy of Chi, post 1,

    There was a discussion on this site regarding a wake up call this week. For those that are napping, it may be a good idea to pay attention. Hedge funds have been bombing the derivatives that back the BBB-.
    On the other hand, what the hell do the hedge funds and the traders in the 10 year pits know. They must just be disciples of Stephen Roach.

  13. Richie says:

    Why you should pay an annual credit-card fee


    a Senate Banking Committee hearing examining credit card practices this week, one consumer advocate suggested those who pay their balances in full every month (about half of all cardholders) should pay a small annual fee to credit card companies.

    Those who carry balances on which they pay interest and fees are subsidizing cardholders with no revolving balance who may even be in rewards programs, said lawyer Michael Donavan.

    Are you kidding me? Credit card companies make a percentage of every dollar I charge. There’s no way I’m paying anyone an annual fee for that. Someone please shoot the senator who recommended this.

    Why punish the people with good credit? Go after the deadbeats you idiots.

  14. lisoosh says:

    Curious George –
    I agree with Anti Trump, there is no point in looking for validation from a bunch of strangers who know nothing about you, your family or your finances.
    Hopefully you thought this through in a wise and careful way and have made a decision you can live with.
    If so, enjoy your new home, don’t obsess over it.

  15. BC Bob says:


    Check your email.

  16. lisoosh says:

    “Richie Says:
    January 27th, 2007 at 9:56 am
    Why punish the people with good credit? Go after the deadbeats you idiots.”

    Did you know that credit card companies call those of us who pay off our balance every month “deadbeats”.
    Looks like they are going after them…..

  17. abamitphd says:


    I thought this was ridiculous when I read it. Consumer advocates are blaming everyone but the credit card borrower for the dire balance sheet of consumers.

    Interest rates on credit cards are’t high because good credit risks aren’t borrowing enough. The are high because bad credit risks are borrowing too much.

    Along these lines, why isn’t the Senate asking the banking industry hard questions about the promised returns to consumers from the recent bankruptcy reform passed in October 2005 that limited the ability of the real deadbeats to declare Chapter 7? Credit card charge-offs are at historical lows relative to delinquencies, but the excess spread from credit card ABS remains high and there is no evidence that rates are coming down.

  18. RentLord says:

    I think most folks, like me, who pay off their cards every month wouldn’t mind using a debit card – if it had the same guarantees as a credit-card.

    To me, I like to see all my purchases consolidated and guaranteed against any fraud.

    Don’t care which card I swipe

  19. Willow says:


    Totally agree. I don’t use my debit card for most purchases because of the risk.

  20. Tom says:

    Short Sales bonanza time

  21. Clotpoll says:

    Curious George-

    I second Anti-Trump’s advice in #4.

  22. listentothecrybabywannabehomeowners says:

    Curoius George,

    Congrats on your purchase. The most important validation is from yourself, and not this blog or anyone else. Enjoy your new home with your growing family.

    In honor of your purchase, the posting forgoes the signature wannabecrybaby scream.

  23. metroplexual says:

    Curious George,

    I think you did pretty well. My wife lived there for a while. Rivervale is a nice town and Paskack Valley used to be a great High School probably still is. Taxes are outrageous though because there are no ratables to speak of.

    You use to be able to bowl in neighboring Norwood, I think you still can. If you get TV flashbacks thats okay “ED” was filmed there.

  24. skep-tic says:

    so according to the NY Times stats, only 1% of agents who had complaints lodged against them in the most recent year lost their license.

    given that it isn’t worth the time to lodge a complaint unless you believe there was a serious ethical breach, this seems absurdly low.

    The ethical RE agents have only themselves to blame for the low esteem the public has for their profession.

    If they truly want people to believe that realtors must live up to a “code of ethics,” then they should actively enforce it.

  25. BC Bob says:

    Just a great damn quote;

    “For example, based solely on a 7.9% decline in existing home inventory, perennial real estate shill David Lereah (chief “economist” for the National Association of Realtors) claimed “It appears that we have established a bottom.” (Mr. Lereah has seen more bottoms than a diaper attendant in a hospital nursery.)”

    “However, the drop in inventory in existing homes is most likely the result of discouraged sellers taking their homes off the market with the intention of re-listing them in the spring”

    “Indeed, my guess is that rather then sensing a bottom in the housing market, bond investors around the world are beginning to appreciate the inflationary implications of a real estate crisis.”

    1/26 article- Higher interest rates mean trouble ahead.


  26. Jay says:

    Public payroll swells, private sector shrinks, housing prices fall
    By RICHARD DEGENER Staff Writer, Press of Atlantic City
    Published: Saturday, January 27, 2007

    A huge loss in high-paying private sector jobs in New Jersey could affect home sales along the shore while a corresponding rise in government jobs is also bad for the housing market because it drives up property taxes.

    Those conclusions come from Jeffrey Otteau, whose Otteau Valuation Group Inc. tracks housing trends for the real estate market. His latest report, the 2007 Real Estate Forecast, contains some dire news about job trends.

    “New Jersey has added 59,700 jobs since December 2000 of which 53,700 have been government jobs,” Otteau said.

    The private sector has lost about 120,000 of the higher paying jobs in professional and business services, manufacturing, information and financial employment. From a real estate perspective, Otteau said this job loss equates to 31,000 home sales at $750,000 per house or 23,000 at $1 million per structure.

    “South Jersey has a better forecast than North Jersey,” Otteau said.

    His report also puts the housing market at “near bottom,” but he predicts first-time buyers reentering the market this year and affordable homes leading a recovery.


  27. njrebear says:

    Recent Changes at Fremont (#3 subprime lender)
    Slide #28 on below link.

    • Tightened underwriting guidelines to improve credit quality:
    • 80/20 Program – Elimination of credit scores 95% LTV/CLTV that are purchase money and stated income
    • Minimum loan amount on 2nd liens raised to 15k
    • Greater restriction on first- time homebuyers – minimum credit history changes
    • New policy on verifying CPA and reference letters. Effective January 8, 2007, will not accept reference letters for stated income and self-employed
    • On properties deemed to be “For Sale by Owner” the maximum CLTV is 90%

    Establish payment shock at 200% PITI on stated with proof of rental income
    • Maximum CLTV on third party junior liens capped to maximum allowed by Fremont
    • Maximum of 90 days delinquent at funding. Greater restriction on C-/D
    • Enhanced policies for the pre-funding VOE – Verification of Employment
    • Mandatory use of the new Purchase Transaction Checklist in addition to
    Income Checklist. Any alerts require sign-off by Senior Management

  28. Curious George says:

    Thanks for all who replied. We are happy with our soon to be purchase and hopefully it will be fine in the long run.

    On another note: here is the mls number of a property I passed up also in River Vale: 2644031. It’s owned by the listing broker, who bought it a year ago for 540k who did no upgrades. House needs new kitchen, bathrooms, and is on a busy road. Originally, listed at 599k and she thought I was out of my mind when I offered 525K. It’s still sitting vacant and now she cut her price 20k.

  29. gary says:

    F*ck Learah, the realtors and the sellers… I’m so f*cking jacked up right now. Every time I read something that has the words “soft landing” and “stablizing”, I get very heated.

    I received an email from a realtor this afternoon that I met at an open house a YEAR AGO!! She says I better not wait much longer as house prices are primed to jump considerably this spring as the market “stabilizes” and continues to strengthen!! She also says buyers are coming back to the market because of record low lending rates and increase in population!!!

    Please, listen to me, as a prudent investor and perpetual student, wait to buy a house. Sit on the sidelines and be patient. If you want to get the kids in a good school district, then rent something. Be patient, save your money and let the lying, cheating idiots bust. YOU dictate the market, don’t let them dictate. Holy Sh*t, am I fuming. I’ll be back in a bit, I’m going for a walk.

  30. Pat says:

    Gary, you’re a better soul than I – going for a walk, that is. I usually yell at the cat. Then he yawns, tries to roll over, gives up and goes back to sleep. Same with my (accomodating) spouse.

    I’m seeing something you’re not. Something like more respect being beamed at buyers. No, Richard, don’t even ask…it’s just a tag-u-ass kind of comment.

    In the last few weeks, has anybody heard any analysis of buyer mentality or fence psychology? Any CF-alias-Jordan kind of interviews? For example, a description of the buyers lined up at a county auction, who they were, or what they said? It’s like people stopped analyzing the buyer when price declines became apparent. Just logical that folks aren’t buying..right? Acceptable behavior and no longer “stubborn.”

    Nothing tells me something.

    Let’s see somebody interview all the bidders at a foreclosure sale. Hear what they have to say, and put it in the paper.

    Thanks, but it’s not going to happen, because everybody now knows that prices are dropping. It’s a given.

    And one thing to add to Gary’s comment about putting your kids in a good place:


  31. AntiTrump says:

    #28 Curious George:
    “Originally, listed at 599k and she thought I was out of my mind when I offered 525K. It’s still sitting vacant and now she cut her price 20k.”

    I have noticed that many realtors who list their properties have the most unreasonable asking prices.

  32. gary says:


    I’m back… went food shopping actually. lol! 15 items in the express checkout, grand total: $48.68. That’s a discussion for another day.

    I hate to get so infuriated but this really is a sensitive subject for me. The wife and I went through hell about 7 years ago and I really, really feel for the hard-working, honest souls who just want a decent house in a decent neighborhood for their family and have to deal with the utter bullsh*t all these “ethical” people have/will put them through.

    Sigh…. I’m so old school and probably much too sensitive. :)

  33. Pat says:

    Gary..exactly why I won’t let my husband go grocery shopping. Bill seems 2x when he goes, and then I have to run over the next day to pick up all the “oh, we needed that?” stuff.


  34. njrebear says:

    Did those 15 items include popcorn? You will need a whole lot of popcorn while you watch villain Liereah and his evil accomplices get hit up by the good guys :)

  35. gary says:

    All those tags confuse me, I can’t tell the unit price from the sale price from the whatever price!! :)

  36. gary says:

    Of course, the popcorn!! Oh well, that’ll be on the next trip.

  37. UnRealtor says:

    RE: Annual credit card fee

    Never understood why anyone would have an American Express card, with it’s $75 annual fee.

    Haven’t paid an annual fee in ages.

  38. UnRealtor says:

    In my conversations with realtors, I now work in the phrase “serious seller” at every opportunity.

    For example: “At that price, they’re not a serious seller.”

    It drives them absolutely nuts.

  39. BC Bob says:

    “YOU dictate the market”.


    You can forget about exhisting home sales,new home sales and mortgage applications. These 4 words are all anybody needs to know. That’s right, the buyer dictates. The worm has turned. Those that recognize it will be OK. Others??? Sellers have to sell, they are not offering to start a bidding war. They know it’s over. They need to sell. Buyers?? They don’t have to buy. Use that to your advantage. Greed/fear, the pendulum has turned.

  40. BC Bob says:


    I like that one, “serious seller”. That will be the new theme in 2007 & 2008.

  41. Clotpoll says:

    It seems as though every 2-3 weeks, the bear camp here (by that, I mean virtually everyone who posts) decides to initiate a circle rant vs evil real estate agents.

    Invariably, the same themes are touched upon: self-dealing, lack of reliability, lack of intelligence, pressure sales tactics and general unworthiness of the label “human”.

    After 1-2 days of this, some Kirkegaard of the blogosphere comes to the conclusion that even ethical agents are tools of the devil, since we are “unable” or “unwilling” to rein in the miscreants among us. Rather than revisit some rather long-winded explanations I’ve offered in the past for why things are the way they are, let me give the Cliffs Notes version:

    1. Ethical agents are WAY outnumbered by the shysters and nincompoops among us. It’s almost impossible to set the agenda when you’re in the deep minority. Admittedly, I have tried and failed at this.

    2. Many of the problems that flow from the plethora of bad agents out there can be directly attributed to the lax licensing requirements in NJ. Effecting a legislative solution will be impossible, though, as large, “traditional” RE companies base their business models on the availability of cheap, willing, “green” agents to do office scutwork, answer phones and sit endless open houses. The powerful RE lobby in NJ will never allow standards for licensees to be raised, as it would render the prevalent business model unworkable. In a word, the game is fixed.

    3. Once you, as a member of the public, have knowledge of the facts presented in #1 and #2, you have the obligation to yourself and your family to select an agent in the same way you do your doctor, attorney or accountant. I’ve seen many customers completely turn themselves over to an agent who just happened to answer the phone or open the door to an open house…no questions, no interview, no references…nothing. Allowing complete strangers to advise you on the biggest financial decision of your life is worse than gambling, as the prevailing odds indicate you’ll probably be advised by a crook, moron, or both rolled into one.

    “Caveat Emptor” is not a term that applies to all purchases EXCEPT real estate. A buyer or seller dealing with an unknown agent is advised to be on guard until the agent fully demonstrates a reasonable degree of skill and integrity.

    The game is not going to change; however, you can change the way you play the game.

  42. njrebear says:

    “Truth Always Wins”

  43. RoadTripBoy says:

    Those who carry balances on which they pay interest and fees are subsidizing cardholders with no revolving balance who may even be in rewards programs, said lawyer Michael Donavan.

    I have not posted in awhile but this one really irked me.

    Let’s see if I understand this: Those who live beyond their means, maxing out their credit cards and not really paying for the things they buy are subsidizing those of us who live within our means and pay our bills in full each month???
    This is the most ridiculous thing I’ve read in quite some time.

    And this guy calls himself a “consumer advocate”? Which consumers is he advocating for?

    I don’t have much sympathy for people who can’t pay bills on time and repeatedly spend themselves into financial holes. Yes, there are predatory lending/credit practices and the credit card companies are guilty of that to a degree. But it takes two to tango. The consumer has to bear some responsibility for getting him/herself into the situation in the first place. I mean, how many times do you have to look at your credit card statement and see an obscene interest charge before you say to yourself, “gee, maybe I shouldn’t charge more than I can pay each month; I’m wasing a lot of money on interest”???? Argh!

  44. RoadTripBoy says:


    Be patient, save your money and let the lying, cheating idiots bust. YOU dictate the market, don’t let them dictate. Holy Sh*t, am I fuming. I’ll be back in a bit, I’m going for a walk.

    Breathe, two, three; Out, two three, In, Two, three; Out, two, three. Out with the bad, in with the good!


  45. Politely says:

    Unrealtor #37 – For what it’s worth, I’ve had Amex for about two decades now, and it’s still my first choice – I usually charge everything on it. It’s not strictly an economic decision, since I know there are much better deals out there, but here’s why I will continue to pay the annual fee:
    1) they always pick up the phone – I’ve never had to wait on an automated phone queue;
    2) their customer reps are usually orders of magnitude better than other card companies (I think I’ve only had one poor experience) and, unlike with some cards, I get the impression that these reps are actually Amex employees and not random outsourced phone jockeys; and
    3) they’ve been pretty good to me in a bunch of little ways.

    To sum it up, I just feel comfortable that if something goes wrong, they’ll help take care of it and won’t tie me up with red tape or view my issues with suspicion or hostility. To me, that’s worth the annual fee on the gold card….
    In a small way, it’s similar to the past discussions here about paying realtor fees – if you feel they’re not doing anything for you or if what they’re doing is not valuable to you, then you shouldn’t (and probably won’t) pay anything, but if they’re providing you with good service and that’s something you value, then you’ll pay for it. :)

  46. BC Bob says:

    “It seems as though every 2-3 weeks, the bear camp here (by that, I mean virtually everyone who posts) decides to initiate a circle rant vs evil real estate agents.”


    I agree with you and I don’t understand it at all. I think I’m pretty bearish RE. Every action has a reaction. For every cause there is an effect.This market is proving it. During the moonshot and now the beginning of the bust, not once have I insinuated that RE agents are/were the cause for this absurdity. Look at any industry, insurance[universal life, sorry ins agents, it s*cks], stockbrokers selling IPO’s that are only a shell, never a chance of earning a dime, ambulance chasing lawyers,doctors, medicare/medicaid fraud, our own elected officials drawing 2,3 or 4 pensions. The list goes on and on. When can John Q stand up and say I and only I f*cked up?? Those that missed the run will blame the reators, those that got sucked in will blame the realtors. What about “I”?? There’s a reason why I is only one letter.

    Back in 2004-2005, RE agents were trying to convince me to suck out all equity and buy 2,3,4 more properties. Did I listen?? No. If I did, do I blame them for my greed?? Bottom line,if you don’t watch your own *ss, then bend down and kiss it goodbye. In any mania, the market/not the conduit creates the pandemonium. The broker is just the middleman. The stockbrokers back in the dot com?? Are you kidding me?? Realtors look like the local church choir compared to those bucket shops; and I work on their street. Bottom line, each and every participant, in any market, has to look at themselves in the mirror. You are probably making the largest investment of your life,RE. You and only you are signing those papers. If you come to a fork in the road [yogi] it’s your decision where to go. There is no credit/nor blame on anybody else. You are just skirting the issue blaming any of this on a RE agent. If you missed the run, so be it. Instead of placing blame,put all you energies in a positive mode and figure out how to take advantage of what is/will be occuring. If you buy something 20-30% off 2005, will you credit the realtor for this?? When you make money in any market you pat yourselves on the shoulder,credit is not given to anyone else. On the other hand, if you don’t have the proper risk management tools in place, and you lose money, why blame others?? Ask yourselves why?? You and only you are responsible for your actions.

    Everybody from whatever occupation was enjoying the ride of the dot,com’s in the late 90’s. Many quit their full time jobs to day trade. I sat next to the “new breed”. They told me they never realized how easy it was. Yikes. Nobody complained when the Nasdaq skyrocketed from 3000 to 5000. Yet when it declined from 5000 to 3000 it’s like some entity screwed the every day working man/woman, their hopes and dreams. Although Henry Blodget deserved it, I did not hear anybody complaining when their IPO priced at $45, recommended by him, opened at $80 and closed at $90. Give me a break. Greed is good as long as it’s cooperating, adding to your bank account. When the market turns against you greed is bad, blame someone else for your foolishness??

    This RE market was a result of a spigot opened at full tilt,cheap/free credit, easy money was being made,it was the holy grail,lifestyles of the rich and famous, retirement. A real estate agent could not have created this mess/mania. Don’t give them that much credit, you are assuming they had some foresight. Not one of them could have imagined when the fed began to loosen the end result would be 80-100% gains. Nobody else did either. The flippers did not get involved early in this run. Most of them were the last,final leg of the run, chasing the last two year’s gains. Realtors fault?? Hogwash, speculators have been doing this since Tulip Bulbs. There are/were too many incompetent RE agents playing this game.[Clot, KL and now JB excluded] Blame the fed, the mortgage brokers, the banks,liquidity, petro dollars, even the BOJ. Don’t blame the realtors. Just because someone is in a sh*tty marriage don’t indict the institution.

  47. metroplexual says:

    I too am irked by this credit card nonsense. If it gets to the point that I am having to pay I will dial on to another card. However I have an AT&T universal card (Master Card) that was issued as “free for life”.

    I use my discover card for everything though. I get almost 1% back every year, which amounts to a couple hundred dollars. Folks, you have to game the system. Credit cards charge merchants a percentage of the transaction. I keep my money in a high yield savings account tied to my checking account (which is free). Then I borrow the costs of living for a month from the credit card companies while my money is earning interest. I figure it is like $2K earning interest for me every year.

    I do not feel sorry for the issuers, they do victimize people who get into their trap. Many due to job loss or medical problems. And in recent years they have been changing grace periods to make them shorter and hitting people up for all kinds of fees.

    Hey they are the idiots who set this business model up, not me.

  48. metroplexual says:


    I agree with you and today’s RE prices mostly reflect today’s low interest rates. If you think interest rates are staying low for the long term then today’s prices for the most part are real, except where whacko loans were used. If you think rates will go up then they are not, and I am in this camp.

  49. James Bednar says:

    It seems as though every 2-3 weeks, the bear camp here (by that, I mean virtually everyone who posts) decides to initiate a circle rant vs evil real estate agents.

    I have a real estate agent license, does that make me evil by association?


  50. James Bednar says:

    Anyone really surprised?

    Encap venture relies on public funding

    Three years ago, state officials were calling the EnCap project the “Miracle in the Meadowlands,” a billion-dollar deal to transform trash heaps and toxic marshland into an emerald city of golf courses, luxury condos and resort hotels.

    The smelly expanse that was little more than a playground for illegal dumpers and a punch line for comedians would go from a Jersey joke to “the jewel in the state’s crown.”

    State officials working for Gov. James E. McGreevey proclaimed their miracle a “win-win-win,” a bona fide bargain paid for primarily by a group of risk-taking private investors.

    But a comprehensive review by The Record reveals that the state’s new crown jewel is being financed mostly with loans, grants and financial guarantees supplied by New Jersey’s taxpayers.

    And the biggest winner in the Meadowlands appears to be the group of politically connected private developers at EnCap Golf Holdings who have cobbled together an unprecedented series of incentives provided by state agencies without voter approval.

    The bottom line: For every $1 in private investment by EnCap’s investors, state taxpayers are ponying up almost $20 in future tax revenues, cut-rate loans and public-backed financing, according to The Record’s analysis.

  51. James Bednar says:

    Just an aside, Encap is still planning 2,600 homes for the project.


  52. lostinny says:

    Politely # 46-
    I couldn’t agree more. I only have an Amex Optima but I pay it in full every month as if it were a regular Amex. Their customer service is far superior to any other company I have ever spoken to. If ever there is an issue, they take care of it immediately and do not make me jump through hoops to prove my side. I do not pay an annual fee. And I use it for everything because of their points program. By the time we are ready to go on a big vacation, we’ll have so many points wracked up, we will be getting quite a heavy discount, if not freebies.

  53. lostinny says:

    There is no talking sense to some people. A friend at work has had a house on and off the market for 3 years. (Estate sale- mother died.) She’s in no rush to sell it she says and has already had an agent who did nothing for her. Her bottom line asking price is sky high. I gave her the willow and domania sites and told her to check them out to see if she’s priced fairly. When I asked her what kind of house it is because it’s in a historic area(colonial, victorian, etc.)she said it was built before they had any of those names. So I said, while I don’t believe that’s true, the point is they have those names now and it would really help you to tell people what kind of home it is when they ask. Is it me? She’s such a great person but has zero sense with this. I mean, who lets a house sit for 3 years?

  54. Clotpoll says:

    Grim (50)-

    You must be going thru quite an identity crisis. Both a member of the LOD and the starving bunch. LOL!!!

    Does your broker know you host a bubble blog? Please keep us posted on how things are going in your office. Honest to God, I think you could win a Pulitzer if you play this right.

    BTW, congratulations on the new license. Welcome to the Death Star.

  55. Clotpoll says:

    lostinny (54)-

    Don’t waste your time. Some people are just completely tone-deaf when it comes to dealing with markets and marketing.

    Also, there’s a term for a house whose style can’t be described:


  56. pats56 says:

    Could some please provide me a website where I can check property tax records (for Middlesex County)?

    Just FYI- Most of the homes listed in Monroe, NJ in the price rangeo of $550-$675K are all going stale. I have been tracking this price range since last Nov 2006 and most of the properties are still AVAILABLE today.

    A few homes did enter into contact, but they were homes which were priced to sell and sold.

    Anybody else following the Middlesex County makret? South Brunswick, North Brunswick, or Monroe NJ? Any thoughts?


  57. Frank says:

    Existing inventory in NJ increased 4% last week. Run Forest Gump, run… opps, Sell Forest, sell…

  58. PeaceNow says:

    There’s a very interesting, if rather appalling, article in NY Times today about how Atlantic City casino money that was supposed to help fund infrastructure improvements for AC and surrounding areas is being given back to the casinos.


  59. Frank says:

    08831 (Jamesburg) had 50 more properties on the market than prior week, it’s a dead man walking.

  60. Frank says:

    If anyone needs the money for infrastructure improvements, are the casinos, most of them are old and smelly. But the article does not surprises me, it’s typical NJ government, take it from the poor, give it to the rich and unionized.

  61. profuscious says:

    #54: “When I asked her what kind of house it is because it’s in a historic area(colonial, victorian, etc.)she said it was built before they had any of those names.”

    That is a difficult thing for a lot of people to answer correctly for some reason. There seem to be an awful lot of “colonial” homes built in the 1950’s, I guess because they had brick.

  62. lowball says:

    Anyone know what this is? New Jersey State Legislature? Anyone? Anyone? (hint: a good beginning):

    “Mortgage fraud could become a felony punishable by 10 years in prison in Arizona.

    The legislation, Senate bill 1221, would make it easier for prosecutors to go after mortgage fraud in Arizona.

    “For most people, buying home is the most important investment they will make, and we need to protect the public from predators who are more interested in making money,” said Sen. Tibshraeny.

    Cash-back deals are the most prominent mortgage fraud being committed in Arizona today. The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash.

    The scheme can inflate home values across neighborhoods. Homeowners stuck with overpriced mortgages may never recover the difference. Ultimately, lenders end up with [lowball’s note:well deserved] bad loans. “

  63. RentLord says:

    Pat56, Have you looked at the “Tools” section on the right – on the main page of njrereport.com?

    Several links to check out property records there.

    and yes, I’ve been looking at the s.bruns market for last 5months. The more I look, the more realtors I deal with, the more I am convinced this is not the time to buy.

  64. Clotpoll says:

    KL (65)-

    Precisely. Plenty of industries have the corporate stroke to force employees to do terrible things that injure the public (like selling whole life insurance…the biggest legalized scam in history).

    There are plenty of equally-awful RE companies, but none of these companies can FORCE agents to dupe the public. It always boils down to the individual agent and his choice of business methods. And, there are always a handul of RE companies in any marketplace that will welcome and encourage an agent who wants to run a clean, transparent operation.

  65. RentLord says:

    Clot, KL –

    Just my honest opinion but neither a realtor nor an insurance agent does any ‘real work’.

    flame away .. but thats my opinion!

  66. lostinny says:

    I need some help. Would someone give me some info on this mls # 2332990?
    Like the address if you can. I’ll try to get the purchase info after that.

  67. gary says:

    Did anyone read the main cover story on today’s Star Ledger?

    link –> http://www.nj.com/news/ledger/index.ssf?/base/news-11/116996351079750.xml&coll=1

  68. Clotpoll says:

    RentLard (68)-

    That’s ok. One of the necessary elements of any market are the people who view the machinery and process as useless, worthless or easily-replicated by the average individual outside the bounds of the process.

    People like you who choose to transact RE outside market channels constitute what is essentially an alternate, or “gray” market which results in much more of a zero-sum result, in which either the buyer or seller “beats” the other party. Negotiation is replaced by leverage, and valuation is often clouded by an excess of emotion or lack of credible information.

    What’s really fun is when people who have no insight- but plenty of contempt for- the process get into the organized game. Then, people like you serve as the ground meat upon which the rest of our enchilada gets layered.

    Please continue to hold your opinion. It is certainly your right. And, I will continue to pray that I end up across the table from you one day.

  69. Hard Place says:

    Just a random thought for those saying Wall Street will help prop up the market…

    After looking at the lowballs, if all these Wall Street bonuses are going to help the RE market in the area, ask yourself these questions?

    Don’t Wall Streeters tend to get paid high salaries and bonuses?

    Than why are all these expensive homes being sold at all these lowball prices.

    Answer: Too much inventory and a dearth of buyers.

  70. gary says:

    Can anyone supply a current number on supply? I haven’t seen it posted in a while or maybe I missed it.

  71. Crazy Crazy Renter says:

    Clot, respectfully, I don’t get why transacting outside market channels results in any more a zero-sum result than transacting in market channels. Isn’t it zero-sum result regardless? Higher price means seller wins and lower price means buyer wins.

  72. AntiTrump says:

    #72 Hard Place:

    “Just a random thought for those saying Wall Street will help prop up the market…Just a random thought for those saying Wall Street will help prop up the market…”

    The wall street effect will be seen in the Jan to March time frame when bonuses are typically paid out.

    I think you can see some of it already, but I don’t think wall street alone will bring inventory levels from 8 months supply to four months or even six months. Only price corrections will bring inventory back to normal levels.

  73. scribe says:

    Rentlord, #64

    Were you kidding?

    A lot of people are in their homes long-term. Suppose you’d purchased your house in the early 1960’s for $15,000, and you were looking to sell to move into a retirement community in the summer of 2005 in the middle of bubble-mania? You’d have no idea of how to price it to draw interest, or what you had to do to get the house ready for a sale.

    Suppose that when you made the conversion to gas heat in the 1980’s, the requirement was that you drain the tank, but now, before the house can be sold, the new requirement is that the tank has to be re-opened and filled with sand? Or suppose there’s a spare shower in the basement that hasn’t been used in decades, but now, such showers and drains are illegal, and the drain has to be cemented over before the inspectors come around?

    When the bids come in, it’s not just the highest bid; it’s the highest bid with the the most solid financing. Anyone who bought years ago with a standard mortgage would be baffled by today’s mortgages.

    My family’s had good experiences with good brokers.

    It becomes clear pretty fast who knows their stuff and who’s just blowing smoke.

  74. syncmaster says:

    When the bids come in, it’s not just the highest bid; it’s the highest bid with the the most solid financing.

    Ok, I have a newbie question. Why does the seller care how the buyer is going to come up with the money? Let’s say I have two offers to buy my house for $100,000. Assume both potential buyers make 100K in income and have done so consistently for years. One guy will pay me cash, no mortgage. The other guy will pay $20,000 and mortgage $80,000. What difference do these offers make to me? Even if I were to add in a third buyer with 100% financing and a spotty work record… if he can close the loan, I still get paid the same amount, right? Or am I missing something.

    Any insight will be much appreciated.

  75. RentLord says:

    Scribe, you don’t need a broker for assessing a property. What you need is an appraiser – who takes a flat fee depending on the size of the property, etc. Not a 3% blood sucking broker.

    You may have good experiences with a Realtor – in fact I liked the realtor I used when buying my first house. But that doesn’t change the fact that ‘brokers’ by definition bring inefficiency into the system.

  76. RentLord says:

    Cloth, you are to realtors what Fox News is to the media. Sometimes you do have valid points – but on the whole just a notch above the free tabloids

  77. scribe says:


    I wasn’t directly involved in the deal. I just know that my relatives had a lot of competing bids that weren’t far apart, and the financing behind each bid was a factor in deciding which bid to accept. For that, they relied on the broker’s opinion of the different financing packages that were being presented.

    What the seller is looking for is a bidder who can close, no fail. Apparently, what happens a lot is that deals fall apart because the prospective buyer can’t get the financing, and if that happens, it can be a real pain in the butt.


    An appraiser isn’t going to bring in prospective buyers. My relatives who sold that house – it sold in a day. People were lined up down the block. Not a sumptuous palace, but a very nice house in the starter house category. The deal was smooth; closed just fine. They were happy with it. Didn’t mind the broker’s commission at all.

  78. metroplexual says:


    IMO, Often sellers are looking for expediency. Make the sale fast and move on. When folks finance things it is often with contingencies on the sale of the previous home. This could trip up the sale going through.

  79. ADA says:

    Syncmaster #78.

    It makes a difference to the seller because the deal is more likely to go through if the buyer doesnt have to obtain a mortgage if he is 100% cash.
    Similarily, since most contracts have a mortgage contigency a buyer putting 20% down is more likely to get the mortgage than a buyer putting %0 down. Certainty of sale is important to sellers and they will make concessions to increase it.

  80. syncmaster says:

    scribe, metroplexual, ADA,

    Thanks for the responses. I have one more question along these lines.

    How often is it that a potential buyer with a pre-approved loan has his financing fall through at closing? Does the potential buyers choice of financial institution impact the likelihood of this happening?

  81. syncmaster says:

    For the purposes of # 84, please assume the potential buyer doesn’t have a home to sell.

  82. Frank says:

    Great post, this shows you that there’s no hope in NJ. It’s a lost state.
    Keep voting for Democrats!!

  83. Appraising Grace says:

    #70 & #86 Without true reform of State Employee’s Pension and Medical Benefits into alignment with the rest of civilized society…..New Jersey is doomed to this upward spiral of Taxes.

  84. scribe says:


    For that one, I would ask Clot or Rhyming.

    I would guess things are different now that the subprime sector is falling apart, and there are new regulations on lending.

  85. pats56 says:

    Anyone attend open house today? Drove thru a few towns in Middlesex County and there are many open house signs.

  86. Clotpoll says:

    Methinks Master RentLard doth protest a bit too loudly.

    Bear or bull, a troll is a troll. Thanks to scribe, Metro and others for pointing out some painfully obvious things that seem to elude Mr. Lard’s estimable powers of deduction.

    I’m still mulling over how principals to a possible transaction, dealing face-to-face, and possessing no professional negotiation skills are somehow more “efficient” than principals working thru brokers.

    By the same analogy, I guess the floor of the NYSE should open to any individual buyer or seller with business to transact.

  87. njrebear says:

    I see a lot of houses for rental on realtor.com. How does the commission on rentals work?

  88. pesche22 says:

    I did a walk thru of the HOV site in Clifton
    today. They look good, price reduced,but
    still very overpriced.

    Anybody else gone thru?

    Taxes look high as well.

    Some are in Clifton, some are in W.Paterson.

    But you get a Pool

  89. scribe says:


    How often do you screen out prospective buyers as not being people who could ever get a mortgage in a stated range, or as people you just don’t want to take around to houses – something feels hinky?

  90. Clotpoll says:

    Often. If the buyer or his lender starts laying out a mile-long line of conditions for qualification, I’ll take a pass.

    The biggest deal-killer on a lot of 100% and 100%+ financing is the need to build in large seller concessions, as the borrower who wants to “pump” his buying power by going stated income often- surprise!- has no money to pay closing costs. Tacking that money onto the selling price causes an appraisal shortfall, and the deal dies right there.

    Also, stated income loans require buyers- even if they cannot pay closing costs- to still have proveable cash reserves, in order to demonstrate that they can make the first few payments and handle homeownership without resorting to living on Ramen. Many less-than-honest brokers don’t verify these cash reserves at the beginning of the application process. Then, when the reserves are brought up later, during the underwriting process, the buyer (who has nothing in reserve) freaks out and cancels the deal.

  91. njrebear says:

    Fishy Smelly Stuff out of Wall Street and Other Loose Ends


    Late in Friday’s session the market and financials rallied back hard on a story that Bankamerica and Countrywide Financial were exploring a “partnership”. The words “including merger” were also added to the story. CFC stock spiked about four dollars at one point on huge volume of 37.8 million.
    Apparently CFC’s Chairman and CEO Angelo Mozilo wasn’t in on the ramp, I mean story, hadn’t heard about it, or just didn’t care, as he sold about a million smackeroos or 23,000 shares earlier in the day at $40.40.

  92. Al says:

    HI all – a random question – I was looking on the house this weekend -it was in the city limits in a standard neighbourhood – but it had a well??? in general house was very outdated….

    How much does it cost to hook up a house to city water???

    All other homes within 5 block radius are hooked up already as the matter of fact realtor told ne that this is the only house in the city not hooked up to public water.

    And how muc would a new roof cost assuming complete re-roofing not just covering old shingles????

  93. UnRealtor says:

    LOL, this was great:

    “Negotiation [without realtors] is replaced by leverage, and valuation is often clouded by an excess of emotion or lack of credible information.”

    You sure do lay it on thick. Did you honestly keep a straight face while writing that? Sure made me laugh heartily!

    Glad to know working with a realtor will minimize the emotional factor in a transaction, while maximizing dissemination of “credible information.”

    “Pay no attention to that man behind the curtain.”

  94. UnRealtor says:

    Al, water hookup is probably $5-10K if the next door neighbor has city water.

    A new roof (you didn’t mention size), but assuming an average 3 bedroom house, asphalt shingles should run about $10-15K installed.

    Your actual numbers may be less, but probably not more.

  95. Al says:

    The house is standard New_Jersey’s small cape-cod, 2 bedrooms.

  96. scribe says:

    Doesn’t “credible information” mean not just the asking/listing prices on comparable properties, but the actual sales prices, which people wouldn’t necessarily know, even though sales prices are published in the Star-Ledger?

  97. Al says:

    I was quoted 15K for roof as max but also I was quoted 15K for water hook-up. Every house on the block has city water.

    Can I just call city public service company to ask for a price??

  98. Hard Place says:

    AntiTrump – Wall Street bonuses for Goldman are announced in December and paid out already. Most firms are paying out now. Only a handful of firms pay as late as Feb. My old firm was one of the latest and typically paid out in February.

  99. Hard Place says:

    pats56 – not planning to look at open houses any time soon. I’m sitting on a stack of cash and last year only went to check out about five homes. Only bid on one and it was a lowball, that I almost got the owner to bite. Their listing was about to expire.

  100. New-to-NJ says:

    Here’s something strange I noticed today, that maybe someone here can explain to me. A unit near ours in our townhome development was on the market last fall. I think it had been on the market a while (at least since July 06 when we moved in). The owners moved out about 4 or 5 months ago and took it off the market. The last few weeks I have noticed prospective buyers stopping by for showings, but there is not a sign in front of the unit. Sure enough, I checked and found that it has been relisted. Why would they put the unit back on the market, but not put a sign up? I feel like I am missing something (I am a prospective first-time buyer, so I am new to this whole game).

    BTW, when it was listed last year they were asking $349k. Now it is listed at $314,900 and the listing says the unit is vacant and ready for a quick closing. I imagine the owners are getting a bit desperate after carrying the cost of 2 homes for 4 or 5 months.


  101. James Bednar says:

    Could be as simple as the development not allowing signs.


  102. New-to-NJ says:

    That is not the case. When we moved in last summer the development had 8 or 9 units for sale all with signs — this unit was one of them?

    What is an exclusive listing? I have heard the term and am not sure what is meant by it — thought maybe this had something to do with the lack of a sign.

  103. Rich In NNJ says:

    That is not the case. When we moved in last summer the development had 8 or 9 units for sale all with signs — this unit was one of them

    They may have just added that law last year due to the increase in signs. Happened in my mother’s development.
    Are there other for sale signs for other units?


  104. Rich In NNJ says:

    Are there other for sale signs for other units right now?

  105. lostinny says:

    Can someone tell me if Franklin Township in Somerset is in a flood zone?

  106. James Bednar says:

    Interesting piece out of Canada..

    Compounding mishap a matter of interest in celebrating real-estate gains

    It seems impressive: a 264 per cent rise in Canada’s average home price over 25 years – so impressive that it prompted the Re/Max real-estate organization to proclaim an 11 per cent average annual increase.

    “Conventional wisdom used to be that real estate was a relatively safe, long-term investment that typically appreciates at a rate of five per cent annually. These statistics clearly tell a different tale,” declared Re/Max executive vice-president Michael Polzler.

    Actually, they don’t.

    Re/Max made a basic arithmetical error by computing a simple average, without taking account of the compounding effect that annual increases have as they are added on top of one another.

    After media inquiries, Re/Max issued a clarification: “Nationally, the compounded annual rate of return is 5.3 per cent” – which confirms the conventional wisdom.

    Of course, even this assessment might need clarification for those who bought at the previous property-market peak in 1989.

    For example, someone who paid that year’s Canada Mortgage and Housing Corp. estimated average price of $147,000 for a Canadian home, then watched its value plummet in the mid-’90s before reviving to the Re/Max estimated 2006 price of $277,000, would have a 17-year gain of 88 per cent – representing a compound annual growth rate of 3.8 per cent.

    So add “timing, timing, timing” to the old real-estate adage about investing in “location, location, location.” In Toronto, after its exuberant 1980s bubble, the annualized 1989-2006 gain from $273,000 to $352,000 was just over one per cent.

  107. AntiTrump says:

    #103 Hardplace:

    Existing home sales are reported at closing and not at the time of going into contact like new homes. Hence I assumed a lag in the bonus effect from one to three months.

  108. Zac says:

    he walks into a lions den and you wonder why people snap at him ?

  109. chicagofinance says:

    Allow me to add two thoughts:

    1. If you are dealing with a clod realtor, then stop and go elsewhere. If they have exclusive access to what you want, then shut up and deal with less than perfect market conditions.

    2. If you find out that someone is an idiot or sleaze during or after the fact, and there is nothing to be done, then look in the mirror for your lack of time, effort, and savvy to identify the proper professional.

    In either case – look in the mirror and stop blaming everyone else – Bost has it right!

  110. chicagofinance says:

    Zac Says:
    January 28th, 2007 at 8:48 pm
    he walks into a lions den and you wonder why people snap at him ?

    He’s doing us a favor. You don’t have to agree with him, but there is no value in treating him like sh–

  111. Zac says:

    perhaps his time would be better spent on a Realtors blog converting them to his practices.

  112. UnRealtor says:

    Chicago, don’t lawyers attend many years of law school, and realtors attend less school than a hairdresser? Grim posted the comparison about 6 months ago.

    There’s certainly a fair price worth paying for rare expertise — a brain surgeon, for example.

    But realtors force their “expertise” by locking up data (MLS), and distorting data (David Lereah).

    For a busy seller realtors can provide value, but the Internet has largely made them obsolete. Pay a RE attorney $1,500 to write up a contract, get a home inspection, and that’s the end of the story. The buyer and seller can split the $60,000 the realtor would have skimmed.

  113. WickedQuiver says:

    As a daily lurker (and an average joe) I must say chicagofinance is right on. Clot is one of this blog’s MVPs (Most Valuable Posters).

  114. Zac says:

    beware of Greeks bearing gifts.

  115. njrebear says:

    new to nj –
    I’ve seen the same. I think it’s a move to ‘consolidate’ for-sale signs.

    I remember an old post that talked about some California based realtor group urging realtors to ‘consolidate’ sale signs to make inventory look good.

  116. chicagofinance says:

    Zac Says:
    January 28th, 2007 at 9:23 pm
    beware of Greeks bearing gifts.

    Z: did you mean Geeks or Dorks?

  117. chicagofinance says:

    Zac Says:
    January 28th, 2007 at 8:57 pm
    perhaps his time would be better spent on a Realtors blog converting them to his practices.

    Z: does that mean you would prefer if he didn’t post here?

  118. chicagofinance says:

    Unreal & Z: I understand he is caustic at times, but the message I get from him is: do your homework, get help when warranted, and set reasonable expectations. If you spend the time to find the right professional, treat them with respect, but be shrewd, you will be rewarded. Don’t be penny wise / pound foolish.

    Stated another way, the pie is not finite, and it is possible to WIN-WIN, or in the case of Xanadu/Meadowlands Golf Club….WIN-WIN-WIN-WIN-WIN (just kidding)

  119. New-to-NJ says:

    There is another unit with a Remax sign up right now, and another that is FSBO. I believe those are the only other units on the market right now. The unit in question is being listed by Remax, but a whole separate agency and agent.


  120. chicagofinance says:

    A Long Stretch of Steady Rates
    Some Say Fed Could Go All Year
    Without Changing Targets – And
    That May Be Good for Stocks
    January 29, 2007

    There isn’t much that moves the market like a shift in interest rates by Federal Reserve policy makers. This year, it is beginning to look like the Fed won’t move much.

    As central-bank rate setters prepare for their first meeting of the year this week, investors increasingly are resigned to a longer pause in rate moves than previously expected.

    Yet it might be that it is the pause that refreshes. In recent years, the stock market usually has performed well when the Fed declines to move up or down, as it has since last summer.

    Some Wall Street forecasters say the Fed could go all year without changing its rate targets, a prospect that contributed to the market’s sluggishness last week.

    Such predictions run counter to many investors’ hopes for a quick rate cut, which would lower borrowing costs and encourage more consumption throughout the U.S. economy, potentially helping corporate profits and thus stocks.


  121. chicagofinance says:

    this is out of left field, but right-on…….bloody hell

    Tough Equation:
    Lower Oil, Yes,
    But Higher Corn
    January 29, 2007
    The relief that U.S. households are feeling from lower energy costs could get pushed aside by a seemingly unlikely source: corn.

    After a decade of going mostly nowhere, the price of corn has shot higher since the summer, driven by government rules that pushed up demand for ethanol. At $4.05 a bushel, the price of a corn future contract is nearly double year-ago levels.

    With Washington newly enamored with homegrown energy sources, despite the recent drop in oil prices, corn prices could head higher still. In time, this could push its way into food prices broadly.

    Corn goes into more than a bowl of cornflakes. It’s in your bacon and eggs — corn gets fed to hogs and chickens. High-fructose corn syrup sweetens soda, salad dressing and, if you look at the label, probably your cough syrup. In his book “The Omnivore’s Dilemma,” author Michael Pollan relates that he asked University of California, Berkeley, biologists to pass a McDonald’s cheeseburger through a mass spectrometer. They found 52% of its carbon content started out as corn.

    Food prices are a big deal for U.S. consumers. The Labor Department calculates that food costs represent 15% of all consumer costs, points out Merrill Lynch economist David Rosenberg. The tally for energy costs is 9%. (Of course, consumers also indirectly pay for the energy costs that go into making and transporting agricultural goods. Then again, some of that energy comes from…corn.)

    Steep food prices had a big effect on consumers back in the early 1970s, when inflation started soaring. The combination of grain exports to Russia and poor crops sent wheat and corn prices higher in 1972. The following year, grocery bills started rising sharply. By August 1973, food prices were nearly 20% higher than their year-earlier level. Red meat was so dear thieves started hijacking meat trucks. Food, before oil, was seen as the source of runaway inflation.

    Corn is a bigger component of the nation’s food supply now than it was then. Thanks in large part to the way the U.S. government structured subsidies to producers, at the end of 2005 the price of corn was nearly 25% lower than it was 30 years earlier even as food prices more than tripled.

    That encouraged food companies to figure out more ways to use corn — high fructose corn syrup, first developed in the 1970s, didn’t come into widespread use until the 1980s. Low prices also meant feeding corn to animals was more and more of a winning proposition.

    “If you look at cattle and hogs and chickens, what they really are, are devices for turning low-value corn into high-value meat,” says Bianco Research strategist Howard Simons.

    While high prices will encourage farmers to plant more corn, the increased demand for ethanol created by government mandates could eat that up, says Mr. Simons. What’s more, it could leave other crops in short supply, pushing their prices higher.

    “Corn is in a situation where it’s the tide that lifts all boats,” says Merrill’s Mr. Rosenberg. “This could have just as pernicious an effect on headline inflation as energy did.”

  122. lisoosh says:

    lostinny Says:
    January 28th, 2007 at 7:46 pm
    Can someone tell me if Franklin Township in Somerset is in a flood zone?

    Apart from a few houses along the canal that flooded during Floyd, no.

  123. Eisbär says:

    I don’t know if this has been posted here or not, but over at hoboken411.com there’s a story posted about a rumor that A-Rod is about to purchase a top-floor unit at Maxwell Place.

    I bet that there are more than a few kannekt.com klowns creaming their pants right about now.

  124. Hard Place says:

    A-Rod is a clown. Jeter is the man!

  125. njrebear says:

    HSBC Bank USA offers 6% yield online


    Special percentage available to ‘new money’ in accounts through April 30.


    HSBC is one of the top subprime lenders. It is rumored to be up for sale.

  126. lowball says:

    Mr. Otteau figures home prices fell an average of about 10% in New Jersey last year.
    Geez, wonder what happened to the “it only goes up and up” thing ..

  127. Clotpoll says:


    Thanks for the various backups. I never cease to marvel at the number of otherwise intelligent people who, when it comes to RE, can only be described as “not knowing what they don’t know”. I think the academic term for this is “unconscious incompetence”. It’s the same blindness that makes people think they can hit 95 mph fastballs and sink 3-pointers with a 6’9″ human spider in their faces.

    RE is a business that is guided by simple, straightforward principles. However, as we witness repeatedly, simple does not mean easy. I don’t think an agent really has a good grasp on the entirety of possibilities in a transaction until doing about 100 or so (BTW, I’ve done over 300 in my career and administrate about 100-120 deals a year).

    What is most frightening is the assumption by RentLard, UnCola, etc that no leverage is lost in a face-to-face meeting with the counterpart in a transaction. Anyone who truly believes this has never negotiated for anything of enormous value…or has done so and not realized what important information he gave to the other side.

    Every once in a while, we read of pro athletes who will decide to negotiate a “simple” contract extension with their current teams. It seems so easy…read the deal, sign the paper. The players often go so far as to fire their agents and make a public pronouncement of how useless those agents are. Then, the players turn around and either get completely undressed by their teams…or negotiations break down, and the players are forced to hire agents. The one common factor in all these situations is that players come out the other end swearing they’ll never negotiate anything without an agent again.

  128. BC Bob says:

    Chi [127],

    Beans in the teens.

  129. RentLord says:

    cloth, didnt have enough time to respond to all your crap disguised as intelligent stuff over the weekend. I’ll take you up another day!

    It’s the most natural thing to defend one’s own profession.. keep going.. there are lotsa gullible folks out there.

  130. Seneca says:


    I think you are an asset to this blog and I have learned from your posts, even if I don’t always agree with you.

    You wrote:
    People like you who choose to transact RE outside market channels constitute what is essentially an alternate, or “gray” market which results in much more of a zero-sum result, in which either the buyer or seller “beats” the other party. Negotiation is replaced by leverage, and valuation is often clouded by an excess of emotion or lack of credible information.

    I am sure there are lots of “match-ups” that could take place at a negotiating table that would have the results you mention above. However, what if a buyer negotiates for a living, albeit not in the capacity of a local residential real estate agent.

    Someone who negotiates multi-billion dollar M&A transactions, or multi-million dollar outsourcing contracts, or $500k+ per annum distribution agreements, or $1 mil.+ procurement budgets, etc., if they are good at their job, should also be able to negotiate on their own behalf quite well when it comes to the purchase of a home. Yes, there are all kinds of caveats (they need to put in the time/effort to learn about the market in which they want to buy which for many, is already the place they live) but I really do think that a smart, sharp person can negotiate on their own behalf just as well as, if not better than, a real estate agent. One of the most effective negotiating techniques is the ability to simply walk away from the table and I think many realtors do everything possible to make a deal happen. I don’t blame them for that but I do think that Levitt’s assertions in Freakonomics that your real estate agent’s incentives and your incentives as a home seller/buyer are not well aligned, is true.

    To be sure, there are many folks who need to have an agent holding their hand, guiding them through the process. However, there is a healthy slice of the market who could work this process on their own if only they had access to the data. I believe opening up the data to the public is something you advocate. At the end of the day,you are left with buyers/sellers who aren’t using your services because they have no choice, but because they genuinely don’t feel capable of doing it on their own. It would help the industry vet out the choice clients from the “too pragmatic” ones like me who only need you for your detailed listing info.

  131. lostinny says:

    lisoosh #128

    Thanks for the info.

  132. UnRealtor says:

    “Beware of Greeks bearing gifts.”

    Yes, yes indeed:


  133. UnRealtor says:

    ChiFi #124 — a valid point of view, but come on, this bit from Clot was just too much, even for a realtor:

    “Negotiation [without realtors] is replaced by leverage, and valuation is often clouded by an excess of emotion or lack of credible information.”

    Such self-important spin is far detached from reality, but it’s no doubt believed by the author.

    I’ve been participating in Internet discussions for over a decade, and Clot is a classic troll (not a little green man, but one who attempts to stir things up, or for the gullible, to persuade).

    I do think Clot has interesting things to say, but when the mask slips and it gets laid on too thick (as above), don’t be surprised he gets called on it.

    If I had to pick a realtor whose services I would use, it would be someone like KL who frequently posts here. If I had to pick a realtor to avoid, it would be someone like Clot. It’s nothing personal, just business.

  134. Tripti says:

    I and my husband planning to buy a new construction condo in Jersey city near exchange place. This will be our first house. It’s a highrise building. We need to pay like 550k for 2BR/2Bth of 1200s.f. I would like to get some suggestion about the market. I heard condo price is falling. Do I need to wait for some more time or its good time to buy it?

    Thanks a lot for any help.

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