It’s a good time to pay a commission

From the Press of Atlantic City:

Coast is clear, O.C. Realtors tell TV viewers

The feminine voice is as warm as May sunshine with a gentle tone that could reassure even the most skittish investor.
“Now is the time to own a piece of America’s Greatest Family Resort. Buy now!” she says while a happy father bounces his smiling child in front of a half-finished Ocean City duplex marked “sold.”

The city’s Board of Realtors is launching an advertising campaign this month to spur interest among Philadelphia-area investors.

The board bought 30-second spots that will air every morning between 6 and
7 a.m. on NBC, CBS and ABC affiliates in Philadelphia. The city’s Tourism Commission bought similar airtime to target Philadelphia vacationers.

“It’s a dream to own a property at the shore. We just want people to realize it’s a good time to buy,” Board of Realtors President Nicholas Marotta said.

We’re still seeing the negativity and the gloom and doom from the Wall Street Journal and The New York Times. ‘The bubble is going to burst.’ Sooner or later, people will start believing that,” Marotta said. “It’s a lot better than last year.”
Despite this year’s rosier outlook, there is little disputing 2006 was a bad one for resort real estate. A report published in December by the Center for Responsible Lending found that Ocean City ranked fifth in the nation in foreclosures on sub-prime loans, which are adjustable-rate mortgage loans usually offered to high-risk borrowers with terrible credit. In resort towns such as Ocean City, these mortgages are sometimes favored by investors hoping to flip a property before the interest rate skyrockets.

“Sub-prime loans are a disaster. It was a product put out there to entice the equivalent to a day trader in real estate,” North Wildwood Realtor Don Martin said. “Get in here and buy low, hold it for a short term and hope the appreciation grows. What happens is if they weren’t able to flip these things quick enough, the rates start to climb on them. They can’t support the loans.”

“New Jersey coastal areas are being disproportionately hit,” said Sharon Reuss, a spokeswoman for the Center for Responsible Lending in Durham, N.C.

“What we’re seeing is foreclosures are on the rise. It’s bad now and it’s likely to get worse.”

That isn’t the story the National Association of Realtors is telling. The group is promoting a similar theme with the national campaign “It’s a Good Time to Buy.”

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172 Responses to It’s a good time to pay a commission

  1. James Bednar says:

    From the NJ.com message board:

    Cant sell my house

    I have had my house in town listed since the summer. I get alot of lookers/tire kickers but no offers. My realtor has had me reduce the price from the more than $1.6 mil I paid by several hundred thousand and still no interest. Unfortunately, we bought a house in princeton (I had a job transfer) and I cant afford two mortgages. We move next month as I just closed (after much stalling on our part waiting to sell). I am afraid our life savings will run out. We can probably handle 6 months before we exhaust our money. We are taking a beating as it is.
    Does anyone think there will be a turnaround soon to make this a sellers market again? My realtor keeps spinning that the market is heating up again. Of course she said that in september as well and we are still sitting on this house.

  2. metroplexual says:

    Is this guy for real. How do you get to earn that much money and not know to put in a contingency clause? Heard of renting? I do not feel sorry for the ex-princetonian.

  3. James Bednar says:

    From MarketWatch:

    U.S. mortgage applications rise 1.5%

    Applications for mortgage loans at major U.S. banks increased a seasonally adjusted 1.5% last week compared with the week before, the Mortgage Bankers Association reported Wednesday.

    Total applications — including purchase loans and refinancing loans — were up 10.9% compared with the same week a year ago.

    A 4.5% increase in loans to refinance an existing mortgage offset a 1% drop in the number of loans to buy a home. The volume of purchase loans fell to a seven-week low.

  4. Al says:

    you do not neet too much oney if you buy a house for 900K with 2 years neg arm at 1-2% payments…..

    9K-18K payments/year untill it resets…

    But after that when you need to sell your principal growth and you have to sell higher than you bounght… you would not believe people I have met in NJ who “owned 900K” Shoreline property … Incomes in low 30K…

  5. rhymingrealtor says:

    ** Snow day Alert ***

    Will be home bound, lots of commenting anticipated.

    KL

  6. njrebear says:

    This is from Roubini’s blog.
    >>

    US Q4 GDP Growth Likely to be Revised Down to 2.0-2.2% from Initial 3.5% Estimate

    http://www.rgemonitor.com/blog/roubini

  7. James Bednar says:

    I’m going to go out on a limb here and predict a class action suit against the NAR. I’m not saying that the suit is going to be successful, but it’s going to happen. The NAR and other Realtor ™ groups are really going out on the limb with these campaigns. If the market takes a hard tumble, people are going to be looking for a scapegoat, and it’s going to be the Realtors. I think the NAR realizes this, as they’ve been very careful with their wording in their most recent ads.

    jb

  8. James Bednar says:

    The most important being the caveat at the end of every new ad, “Every market is different…”

    jb

  9. James Bednar says:

    Wish I could take a snow day today, but we’re just too busy at work to do it.

    It’s hard making up excuses when you drive an SUV and only live 5 minutes from work.

    jb

  10. njrebear says:

    Chrysler to Announce Job Cuts, Restructuring Plan; Analysts Say 10,000 Probably Will Lose Jobs

    http://biz.yahoo.com/ap/070214/chrysler_restructuring.html?.v=11

  11. Al says:

    I think this link should be somewhere on the main page – clearly visible:

    https://njrereport.com/80sbubble.htm

    Some papers are amazing to read right now:

    Home Prices Increase 3.4%
    February 15, 1989, Wednesday
    REUTERS (NYT); Financial Desk
    Late City Final Edition, Section D, Page 20, Column 4, 229 words
    http://select.nytimes.com/gst/abstract.html?res=FA0713FE3B590C768DDDAB0894D1484D81

    Prices of existing homes rose 3.4 percent last year, but despite the moderate increase, many first-time buyers are being priced out of the market in some areas, a national real estate group said today. Prices of existing homes rose 3.4 percent last year, but despite the moderate increase,…

    Just like it was last year…..

    Than 2 years later they saw what was believed a bottom:

    Bottom of the Housing Slump Is Seen in the New York Area
    By THOMAS J. LUECK
    Published: March 1, 1991
    http://query.nytimes.com/gst/fullpage.html?res=9D0CE1DD103BF932A35750C0A967958260

    The New York area’s housing slump may have finally hit bottom, or come close to it

    And again 2 years later..

    1993 – Hope For A Bottom

    Have Suburban Prices Hit the Bottom?
    By NICK RAVO
    Published: February 28, 1993
    http://query.nytimes.com/gst/fullpage.html?res=9F0CE7D9153CF93BA15751C0A965958260

    THE market for one-family homes in the suburban New York metropolitan region, much of which has been in decline for the last five years, appears to have bottomed out in most areas, and, in some places, such as Northern New Jersey, a modest recovery seems to be under way.

    Real estate brokers attribute the trend to low mortgage interest rates, realistic prices set by sellers, the dearth of new construction and a small surge of first-time buyers who were priced out of the market in the mid-80’s and frightened out in the late 80’s and early 90’s.

    And then, almost 6 years later there was a beginning of the recovery… So 2000’s bubble will takle only half time to unwind – it will be still not untill 2010 for even glimpse of hope..

    Of course today’s market is different…

  12. Al says:

    regarding to my post#11 – all we need is that post on the front page of this blog… And let people decide themselves..

  13. njrebear says:

    #7 JB,
    NAR will probably fire thier ‘chief coordinator’ and sue him for misleading NAR.

  14. njrebear says:

    Al,
    I think your post # 11 is waiting moderation.

  15. metroplexual says:

    Jim,

    You drive a Subaru, unless you drive a Forester, Baja or the Outback I am not sure it qualifies as a SUV.

    As to the lawsuit, personal responsibility is the key there. If someone can sue (and win) for being influenced by an ad, then all advertising would end.

  16. Pat says:

    I wish I could get into work. The little one has 22 red heart lollipops in her backpack and is crying to go to school for once.

    Ice, Ice everywhere, and too early for a drink to put it in.

  17. Pat says:

    I wish I could get into work. The little one has 22 red heart lollipops in her backpack and is crying to go to school for once.

    Ice, Ice everywhere, and too early for a drink to put it in.

  18. thatbigwindow says:

    I am the only one in the office so far. The commute home is going to be a nightmare. I can’t imagine staying here the whole day. I must say, my 1994 Cherokee is excellent in the snow, but ice is a different story…

  19. BC Bob says:

    “** Snow day Alert ***”

    KL,

    Come on??? A little dusting and the office shuts?? Nothing like a bidding war to warm thing up.

  20. James Bednar says:

    Wife has the Subaru now (Legacy GT), I’ve got a Pathfinder that I purchased when my Subaru was stolen. I was going to buy the either the Outback or the Forester, but they didn’t have the Turbo/Manual versions when I needed to buy. We opted for the truck simply because it’s got more room for luggage and the dog(s). The dealer gave us a great deal on the truck, it was a 1y leftover during the time when they changed to the new bodystyle. I do regret buying the truck though, not because of price, but because I think I’d have preferred something else. We both drive manual, and the truck was my first automatic in more than 10 years. I just don’t enjoy driving in an automatic.

    jb

  21. BC Bob says:

    “NAR will probably fire their ‘chief coordinator’ and sue him for misleading NAR”

    Bear,

    ………..There may be more than a few Henry Blodgett’s going down.

  22. BC Bob says:

    Al,[11]

    Over/Under;

    More bottoms in this market or did the Bayonne Bleeder see more bottoms in his tussle with Ali???

  23. rhymingrealtor says:

    BC

    “A little dusting and the office shuts??”

    No, just me (-: 2 kids home, a computer and a phone – don’t need an office.
    KL

  24. metroplexual says:

    I stand corrected Jim. My wife has the 2004 Forester which is considered a truck. I drive a Taurus Wagon (ho hum).

    Check out the Center for American Progress Presentation on the end of the housing bubble. It is a little slow but informative.

    http://streaming.americanprogress.org/events/2006/2006_11_08_housingbuble/2.paneldisc.320.240.mp4.html

  25. Al says:

    Got to work at 6:30am – as usuall to beat most of the traffic… Flex-worktime is nice… Driving back home will be …interesting

    BTW – my old, camry with no ABS did just fine…. I was debating if I am going to take my wife’s this morning SUV but decided not to…

    P.S> forester, outback – are not SUV’s, I am still debating in my mind if I would call Honda CR’v and RAV-4 an SUV.

  26. thatbigwindow says:

    JB,

    I feel the same way about transmissions. Both my cars are stick, and I wouldn’t have it any other way! Do you know how hard it was to find a Cherokee with manual transmission?

  27. rhymingrealtor says:

    JB

    Good day to explain the Re Wiki idea a little further??

    KL

  28. James Bednar says:

    As to the lawsuit, personal responsibility is the key there. If someone can sue (and win) for being influenced by an ad, then all advertising would end.

    I have no problem with the NAR advertising their services or the benefits they provide to the public. However, when they begin to make public statements about homes being an “investment” or make forward-looking statements about their opinion on the market, they cross over a fine line.

    If they are going to discuss the investment nature of the market, they should be held to the same standards as stock brokers and others in the investment field. Their advertisements (print, radio, television) should carry disclaimers.

    jb

  29. Al says:

    LOl I think NAR will ne sued over monopolizing the market by some small outfit which will want access to MLS data system without joining NAR.

  30. metroplexual says:

    Al,

    I used to have an ’89 camry and it did very well in snow. But actually a forester is a considered a truck, it is a joke around the house because it is so small.

    Jim,

    I stand corrected, you are right. But they should put that “past performance does not predict future performance.

  31. James Bednar says:

    The Pathfinder is ok in the snow, but it really doesn’t inspire any kind of confidence. I don’t trust any SUVs in the snow, they can all go forward easily, but turning or stopping is another matter entirely.. My wife’s Legacy is fantastic, really a joy to drive in the snow and ice, as was my WRX. It takes some very aggressive (or poor) driving to upset a Sub in the snow, especially if you use a dedicated winter tires. I’m a car geek too, so of course I had dedicated winter wheels as well. I marked the seasons by wheel changes. Winter was when the Blizzaks were on, and Summer was when the Dunlops or Potenzas were on.

    jb

  32. BC Bob says:

    “If they are going to discuss the investment nature of the market, they should be held to the same standards as stock brokers and others in the investment field.”

    When you don’t have a regulatory body breathing down your neck, you tend to fudge/overstate. They will be held liable to their statemants regarding an investment. Where it goes??? The legal community is saddling up.

  33. James Bednar says:

    Spring and fall, to some extent, were marked by changes in the sway bars. I absolutely despise driving cars with tremendous amounts of understeer (just about ever car made for the mass market). As soon as the road temperature would warm a bit, I’d move to a larger set of both front and rear sways, also changing the front/rear ratio a bit to move towards more of an oversteer tendency. However, once the roads started to cool, and the possibility of snow arose, I needed to go back to the stock sways. My wife drove an RSX-S at the time, so she would take my car to work in bad weather. I was always a bit worried that she wouldn’t be able to handle the oversteer and would panic if the tail end started to slip. Most folks would immediately hit the brakes in this scenario, and if she did the car would most certainly go into a spin, exaggerated due to the larger rear sway. The proper maneuver would be to hit the gas, shifting weight to the rear of the car, in order to gain control. While I explained that to her, it’s entirely a different matter in practice.

    jb

  34. thatbigwindow says:

    My Maxima is horrible in the rain/snow. Thanks to the almighty Bridgestone Potenza. I wish it was RWD. My next car will be an IS250 (in 10 yrs)

  35. James Bednar says:

    Accredited (LEND) declined to offer ’07 guidance. From MarketWatch:

    Accredited Reports 2006 Results

    The company will not issue earnings guidance for 2007 because of the high level of uncertainty surrounding key external conditions that determine profitability. These conditions include:

    The amount and nature of competition and the effect of industry consolidation on capacity in the non-prime mortgage origination market

    The overall condition of the real estate market

    The impact of recent industry changes to products and underwriting standards and practices on originations and the secondary markets

    Investors’ appetite for certain whole loan products, whole loan pricing, and posture on loan repurchases

  36. BC Bob says:

    “No, just me (-: 2 kids home, a computer and a phone – don’t need an office”

    KL,

    The even sent us home from the school last night, at the sight of the first snow flake. The teacher was salivating, off today, off Friday and Monday. Hell, why put on the lights tomorrow?? I am thinking about switching fields.
    I can always get a reference from the football coach. LOL.

  37. njrebear says:

    more on #35,
    down nearly 10% in premarket!
    http://finance.yahoo.com/q?s=LEND

  38. skep-tic says:

    “However, when they begin to make public statements about homes being an “investment” or make forward-looking statements about their opinion on the market, they cross over a fine line.”

    The standards that apply for truthfulness w/r/t to securities are way more strict than with respect to other investments like RE.

    Basically, to recover w/r/t to RE, you’ve got to show intent to commit fraud, and actual reliance on the misstatement. It’s a very high burden– thus, the NAR can afford to play fast and loose whereas someone offering securities would never publish such ads

  39. skep-tic says:

    but if we get millions of homeowners crying to congress about how they were scammed by their realtors, it wouldn’t surprise me if a variant of 10b-5 liability would be extended to RE (meaning you could recover if you show reckless misstatement rather than intentional misstatement)

  40. 2008 Buyer says:

    Accredited (Lack of) Earnings Call is a 11 today…go to their website for info. For those interested in getting some insight into what’s happening with subprime mortgage originators this will be a very good call. They have both retail and whole origination chanels.

    The other day at work I ran into a train friend (S. Orange) who is a PART TIME realtor and told me that now is a good time to buy. I gave my reasons why she was wrong (rent vs. buy calc, general mkt conditions, etc.) and she just flat out said I was wrong. Where do realtors get their cool aid from? She said I’m a realtor and knows the market. I just had to laugh and shake my head. I didn’t have the heart to tell her what mu full time job is.

  41. njrebear says:

    http://media.corporate-ir.net/media_files/irol/63/63356/newsroom/hiddenriskspiggyback.pdf

    40% of home purchase in 2004 used piggy back loans [ The kind that Fremont no longer offers ]. I feel 2005 & 2006 numbers will be much higher.

  42. James Bednar says:

    It’s becoming obvious that the marginal buyer is going to find himself (or herself) in a position where they can no longer secure financing at a particular level.

    The difficultly lies in trying to assess the impact to the broad market due to either the elimination of these marginal buyers or the pressure to put these marginal buyers into lower price points.

    jb

  43. RentinginNJ says:

    I’m going to go out on a limb here and predict a class action suit against the NAR.

    I’m also predicting the NAR is very publicly hauled before a Congressional and Senate committees to answer for their practices.

  44. James Bednar says:

    Let me add a caveat here..

    I don’t believe we’re going to see the elimination of the subprime industry. It’s silly to think that will be the case. The secondary market for subprime paper will continue to exist. However, I believe that instead, investors will demand a higher risk premium on their investment. This re-introduction of risk into the subprime market is going to result in higher rates for the borrower. The secondary subprime market plays an important role as an intermediary, I don’t think anyone wants to see that go away. Risk/Reward is a continuum, not a switch.

    jb

  45. njrebear says:

    more on 41,

    Shows percent of piggy back loans in MSA.
    last collected data – 2004

    Nassau-Suffolk, NY – 19%
    New York-Way ne-White Plains, NY-NJ 32%
    Edison, NJ – 29%
    Newark-Union, NJ-PA – 36%

    No data on Atlantic city :(

  46. James Bednar says:

    Curl up in front of the fireplace with a cup of cocoa and this..

    Testimony of Chairman Ben S. Bernanke – Semiannual Monetary Policy Report to the Congress

  47. UnRealtor says:

    I still can’t believe we had a visitor here this week asking about how to “buy” a house with $10K in a savings account and 100% financing.

  48. Seneca says:

    Couple, Feeling They’ve Been Wronged, Picket Re/Max

    Buyer says she and her husband paid about $150,000 more than the recent homes in her Carlsbad neighborhood had sold for, a detail she says their Realtor(TM) neglected to mention.

    http://www.voiceofsandiego.org/articles/2007/02/12/news/02picket021207.txt

    “Nobody’s going to feel sorry for us,” Marti Ummel said. “We can afford to get screwed. But there are other people who can’t.” And that’s why she’s carrying out her campaign, to alert home buyers that they should seek independent information to verify what their Realtor tells them.

  49. Clotpoll says:

    Al (29)-

    Actually, most MLS systems regularly allow access and membership to non-NAR members.

    If not, we couldn’t have a susbsection for commercial RE, as most commercial RE companies and agents are not NAR members.

  50. James Bednar says:

    I still can’t believe we had a visitor here this week asking about how to “buy” a house with $10K in a savings account and 100% financing.

    I think I missed that.

    jb

  51. Clotpoll says:

    BC (32)-

    Completely agreed on this. The lack of clear “safe harbor” statements in NAR’s pronouncements on the investment nature of RE are inadequate.

    Coincidentally, NAR has begun telling the membership that we must become more aware of the role residential RE plays within a client’s entire financial portfolio.

    The public does have a right to be served by agents who have a better understanding of personal finance than what is generally available now. However, if we are going to veer into the realm of personal financial counseling, better disclosure provisions must be put in place.

  52. Clotpoll says:

    BC (21)-

    Believe it or not, there aren’t any Henry Blodgetts within the NAR, who on the one hand tout RE, while on the other, privately concede that it’s all a house of cards (pardon the pun).

    The NAR leadership is drinking the same Kool-Aid it’s serving. And that’s almost scarier than the alternatives.

  53. lowball says:

    ‘Baghdad Ben’ Bernake’s says:
    “Some tentative signs of stabilization … mortgage applications have picked up”

    Mortgage applications by whom, Bernake boy???

    Isn’t this the 2007 1.5 TRILLION reset of ARMed bagholders running for the exits?

  54. UnRealtor says:

    “And that’s why she’s carrying out her campaign, to alert home buyers that they should seek independent information to verify what their Realtor tells them.”
     

    I’ll say it again — people will pull off a ‘hit’ and kill someone for far less money than is involved with a real estate transaction. Act accordingly — trust no one.

  55. rhymingrealtor says:

    Clot,

    With regard to post 48, for some reason I was under the impresion you a seller could not counter offer with higher than asking. If you asked and recieved a cash no contingincie offer you were bound to sell, if you recieved an offer w/mortgage or any other contingincie you could turn down, and wait for cash. Am I totally off or somewhat off.
    Thanks
    KL

  56. njrebear says:

    Someone on CR’s blog was saying that the Mortgage Application pick up is because applications for high end exotic loans are being rejected. There was also some consensus that Contract to Sale conversions will fall.

  57. BC Bob says:

    “I don’t believe we’re going to see the elimination of the subprime industry”

    The subprime is not going away. That being said, there will be a major,major overhaul.

    1) Investors will be demanding a wider spread over benchmark rates.
    2) Down payments. I know such a 80’s thing.
    3) 100% may be available. Better be squeaky clean, with impeccable credit, high fico score. A scope will be put up your *ss, like you’re running for Pres.. A blemished record??? Don’t tear up your rental lease. Dig up those tax returns and get those pay stubs ready. Cash businees?? The street just changed, from a 2-way to 1 way.
    4) Just a thought??? Back to 28/36%, or some ratio that is close??? If yes, the NAR better wear extra padding for all those false bottoms.

  58. Clotpoll says:

    Grim (44)-

    The subprime market is just heading back to its origins. Pretty soon it will again be a “niche” market, dominated by smaller players who understand and specialize in this category of lending. Many of their loans will either be underwritten by private investors or portfolioed.

    These loans will also have appropriate risk premiums built into them.

  59. Seneca says:

    >> Coincidentally, NAR has begun telling the
    >> membership that we must become more aware
    >> of the role residential RE plays within a
    >> client’s entire financial portfolio.

    >> If we are going to veer into the realm of
    >> personal financial counseling, better
    >> disclosure provisions must be put in place

    What if Realtors had to take and pass the CFP exam? Many of the CFP Board’s own members thing the designation is becoming more of a joke, especially with regard to the code of ethics, but I bet you would eliminate 50% of the Realtors currently holding a license. (One can only imagine if they had to pass the CFA Level III exam, you would have a few hundred Realtors left in NJ.)

  60. James Bednar says:

    KL,

    I don’t think the seller is bound to sell, however, I do believe the seller would be bound to compensate the brokers and agents for delivering a “willing and able” buyer. In this case, they agents have fulfilled their obligation and have earned their commission.

    That said, they’ll never see a penny.

    jb

  61. BC Bob says:

    “‘Baghdad Ben’ Bernake’s says:”

    Lowball,

    ….and the markets are crushing the dollar.

  62. njrebear says:

    Silver is up 40+ Cents in the last two days.

  63. Lindsey says:

    JB re post #42

    Strangely enough, I think the marginal buyers have defined the market for the last two years at least.

    It’s clear the new regulations and collapse of lenders is putting a lot of pressure on the market, but it’s just beginning.

    A few months ago I would have said that there would be a good number of markets that got defined by foreclosures (think Detroit and other rustbelt areas, and maybe some spots with serious overbuilding like parts of FLA and Vegas) but it’s really starting to look like it’s going to be broader.

    Right now our downward slope is tricky, I’ve got the feeling that in the next month or so it’s going to be scary and in Oct/Nov it might be terrifying.

  64. d2b says:

    I’m on the edge of my seat waiting for the spring selling season to start at the shore. At the height of the market, I’ve seen gated communities built 1 block from public housing. Everything was easy to sell when the market was going sky high.

    I don’t take joy in other people’s misery. But when things get affordable, I would love to get a beach-block home. Although I’m starting to think twice on a home in NJ.

  65. James Bednar says:

    From MarketWatch:

    Fidelity report warns against relying on home equity

    A new research report issued Wednesday by Fidelity Investments warns that “Americans currently saving for retirement shouldn’t count on home equity as a significant retirement funding source.” It points to historically lower returns for residential real estate over longer periods than either stocks or bonds. New home values have underpeformed in every five- and 10-year rolling period from 1963 through 2005, the study concluded. The report also found that cyclical downturns in residential markets can “inflict severe damage on a retirement plan.”

  66. Clotpoll says:

    KL (55)-

    I’m not aware of any legal constrictions that prohibit certain types of offers and counteroffers. It seems nonsensical to counter a buyer’s offer at a higher-than-asking price, but I have seen it happen in multiple offer situations. I, personally, do not counsel sellers to do this. First, if a multiple offer situation quickly escalates into a range above full price, the listing agent has not done his job properly; that situation is evidence- in and of itself- that the property was priced too low. Second, in those cases, it’s best to let the market (the different offering parties) determine the true value in an environment that is not being inflamed by a seller countering all offers at a level above the asking price.

    Qualified cash/no-contingency offers at the asking price- in the absence of other offers- may compel the seller to complete the transaction, but over the years I’ve spoken to attorneys who hold differing opinions on this matter. The leeway afforded parties during the attorney review period seems to me to give both buyer and seller enough “wiggle room” to exit the transaction for any- or no- reason whatsoever.

  67. Clotpoll says:

    Seneca (59)-

    That test would eliminate 80% of the Realtors in NJ. Please do not underestimate the stupidity of the average agent.

    BTW…I think that this test- or some equivalent- should be required of agents.

  68. Clotpoll says:

    Grim (60)-

    Excellent point. However, just as you mentioned, the first thing a seller’s attorney would do is invoke a provision prohibiting a Broker’s Lien from being placed on the subject property.

  69. pesche22 says:

    baghdad ben:

    doing a good job so far. give the guy a
    chance.

    What banks in NJ are taking apps. for
    the illegals mortgages?

  70. AntiTrump says:

    #7 JB:

    I agree with your here. Ipointed the same thing a few days ago.

    The merits of the case are irrelevant, but I think it will happen soon.

    People need to blame someone for their misfortunes. Lawyers need to pay their mortage and feed their family.

  71. bergenbubbleburst says:

    #57 BC Bob Ah the old 28/36, it was the Bible back in the 80’s. It was striaght forward,a nd it made perfect sense, and if you did not qualify within those parameters, it was extremely difficult to get a mortgage.

    So 80’s but every thing old will be new gain.

  72. James Bednar says:

    Gold High
    Stocks High
    Bonds High
    Treasuries High
    Commodities High
    Real Estate High

    “We seem to be functioning under a completely new economic model”

    jb

  73. bergenbubbleburst says:

    #53 lowball Guess Bem did not see the release form MarketWatch citing the decrease in mortgage applications for new purchase, 7 week low etc.

  74. chicagofinance says:

    James Bednar Says:
    February 14th, 2007 at 10:02 am

    “However, I believe that instead, investors will demand a higher risk premium on their investment.”
    THEY ALREADY ARE – LOOK AT THE WIDER SPREADS

    “This re-introduction of risk into the subprime market is going to result in higher rates for the borrower.”
    IT NEVER LEFT – the demand for greater compensation for the same level of risk has increased

    NOTE: the risk for the BBB tranche of CMOs has not changed, investors are just deciding that the yield pick-up is not worth the fear defaults…..if the risk profile changed, you would hear jawboning by the rating agencies that they are going to put those tranches on credit watch – but you have to believe that there is contract language where someone is on the hook to make the pool maintain its credit profile

    Let’s see if this starts to bleed into the A-tranche….THAT would be a story……

  75. chicagofinance says:

    James Bednar Says:
    February 14th, 2007 at 11:18 am
    Gold High
    Stocks High
    Bonds High
    Treasuries High
    Commodities High
    Real Estate High
    “We seem to be functioning under a completely new economic model”
    jb

    Yes – massive global liquidity

  76. Lincoln78 says:

    Hi All,

    I was going to leave this question for the weekend but, given that the ice storm is keeping the blog hot, I’ll throw it out there.

    The general concensus is that the RE market will be diving for the next 1,2,3+ years. If that’s the case, how will the rental market react?

    On one hand, you have people leaving/being forced out of the homes they can’t afford, driving up rental demand. On the other hand, you have increased supply with people leaving their homes as well as the mass of new condo construction.

    Thoughts?

  77. bergenbubbleburst says:

    I guess Ben did not see this mornings release from MarketWatch citing the decline in new mtg applications fro the week, 7 week low etc.

  78. skep-tic says:

    here’s the problem as I see it on the regulatory front w/r/t to RE agents. those with more intimate knowledge of the law in this area, please let me know if I’m off base.

    The issue is that agents commonly imply or assert that they have particular expertise that they in fact lack. For example:

    Agents commonly imply knowledge of finance that they do not have (e.g., mortgage rates will be going up — buy now).

    They also commonly imply legal knowledge that they don’t have (e.g., zoning).

    I really think what is needed is clear disclosure in every agency contract of just what advice your agent is qualified to give.

    Agents who exceed the bounds of advice for which they are qualified to give should be held strictly liable if they cause their clients to rely on it to their detriment (i.e., no need to prove intent to mislead).

    Agents hold themselves out as experts and many people believe this claim. Because of this, it seems imperative to define precisely just where agents’ expertise lies and to provide sure penalties for those who stray outside these bounds

  79. chicagofinance says:

    Do you expect any less?

    “Greed is motivating Wall Street to join the fight against global warming”

  80. Al says:

    For you, economic wizzards out there: Talking about economics:

    http://moneycentral.msn.com/investor/charts/chartdl.aspx?D5=0&D4=1&ViewType=0&DateRangeForm=1&ComparisonsForm=1&ShowChtBt=Refresh+Chart&Symbol=%24INDU&CE=0&C9=0&DisplayForm=1&3=0&CP=0&PT=8

    Does this graph indicate 12% inflation in 2005?? (remember, GDP economic growth was what 3%)

    And markets are just reflecting high dollar inflationary expectations ??

  81. Al says:

    Who are we kidding 18% mutual fund return last year…. I might a well quit my job – soon I will be making a lot more on the stock market….

  82. James Bednar says:

    skep,

    Your statement sounded oddly familiar to something I’ve read before. So I went back to find it..

    Part One: A Brief History of
    New Jersey’s Attorney Review Clause

    and

    Part Two: A Brief History of
    New Jersey’s Attorney Review Clause

    In a case titled State v. Bander, 56 N.J. 196, 265
    A.2d 671 (1970), the defendant, a licensed real estate
    broker who had negotiated the sale of certain real
    property between a buyer and seller, was charged with
    the disorderly person offense of having engaged in the
    unlawful practice of law, in violation of N.J.S.A. 2A:170-
    78, when he prepared a form contract for sale of the
    property and submitted it to the buyer and seller for their
    signatures.
    The New Jersey Supreme Court held that the
    defendant’s conduct was not a disorderly person
    offense. But because of an inadequate trial record, the
    Supreme Court reserved the question of whether
    defendant’s acts amounted to the unauthorized practice
    of law. The court suggested that an answer might be
    obtained in a separate suit for an injunction against the
    type of acts undertaken by the defendant or for a
    declaratory judgment.

    jb

  83. BC Bob says:

    “So 80’s but every thing old will be new gain.”

    bergenbubble,

    Reminds me of the Boss;

    “Well now everything dies baby that’s a fact
    But maybe everything that dies someday comes back”

  84. vj says:

    An angry investor who killed three people and himself at a marketing company was upset about losing money in a failed real-estate venture and told his victims to “say your prayers” before he opened fire, police said Tuesday.

    Full Report:

    http://www.cbsnews.com/stories/2007/02/13/ap/national/mainD8N91QLG1.shtml

  85. James Bednar says:

    Hat tip to CR for pulling out this notable quote..

    http://calculatedrisk.blogspot.com/2007/02/bernanke-on-housing.html

    The risks to this outlook are significant. To the downside, the ultimate extent of the housing market correction is difficult to forecast and may prove greater than we anticipate. Similarly, spillover effects from developments in the housing market onto consumer spending and employment in housing-related industries may be more pronounced than expected.

    Chairman Bernanke, Feb 14, 2007

  86. rhymingrealtor says:

    Clot

    Thanks, I barely remember something about the subject at an office meeting but it was quite some time ago and we get very embroiled into personal matters, I attend the minimum required.
    KL

  87. James Bednar says:

    From MarketWatch:

    Bernanke: Early to say the problem is over in housing market

    Bernanke: Spring selling season key to ’07 housing outlook

    Bernanke: Distress in subprime mortgage market is a concern

    Bernanke: Subprime woes do not threaten overall economy

  88. BC Bob says:

    72&75,

    “We seem to be functioning under a completely new economic model”

    “Yes – massive global liquidity”

    ………..and why isn’t the Almighty Dollar a recipient of this massive global liquidity??

  89. Clotpoll says:

    Grim (83)-

    The whole problem with Opinion 26 and the enjoinder against agents’ illegally practicing law is that the related disclosures are not made until buyers instruct their agents to prepare written offers.

    The damage of agents’ making statements that are beyond their scope of expertise is usually done by the time offers are prepared.

  90. James Bednar says:

    From MarketWatch:

    Masco posts loss, says 2007 outlook difficult

    Cabinet and fixtures maker Masco Corp. turned in a fourth-quarter loss on Wednesday, as a drop in new home construction and remodeling projects kept buyers away.

    Additionally, the Taylor, Mich., company said “the uncertainty that home builders may cut production even further” to reduce the inventory of homes on the market, “combined with the unpredictability of commodity costs,” would make it very difficult to provide earnings estimates for the year.

    The company, whose brands include Mill’s Pride and KraftMaid Cabinetry, said it lost $187 million, or 49 cents a share, for the three months that ended Dec. 31, down from a profit of $173 million, or 41 cents, in the year-ago quarter.

  91. Clotpoll says:

    KL (87)-

    I sympathize with you. Most RE companies’ meetings involve teaching agents exactly how to fail.

    I’ve never quite understood what regular meetings of independent contractors are supposed to accomplish. Seems like a non-sequitur to me.

  92. chicagofinance says:

    BC Bob Says:
    February 14th, 2007 at 12:03 pm
    72&75,
    ………..and why isn’t the Almighty Dollar a recipient of this massive global liquidity??

    ??? – yes, it has been

  93. BC Bob says:

    “??? – yes, it has been”

    Purchasing power??? Dollar Index???

  94. Clotpoll says:

    BC (94)-

    Just a sign it’s time to default to the de facto currency.

  95. chicagofinance says:

    Don’t look at it in a vacuum……think where it is versus where is really historically would be…..

  96. BC Bob says:

    “Don’t look at it in a vacuum……think where it is versus where is really historically would be…..”

    Chi,

    Index- 120, 2001, today approx 84 (March Index). Historically, it shows a 30% decline to me.

    Think of the vacuum that is sucking purchasing power out of our wallets.

  97. BC Bob says:

    Clot [95],

    All that glitters in Hunterdon is not limited to the potential of a spring rebound.

  98. http://biz.yahoo.com/cbsm/070213/5d76d8ddb54449beafcbb50fc56d311d.html

    MarketWatch
    Another subprime lender, ResMAE, files for bankruptcy
    Tuesday February 13, 2:56 pm ET
    By Alistair Barr
    Private firm says Merrill triggered crisis; plans asset sale to Credit Suisse

    SAN FRANCISCO (MarketWatch) – Subprime lender ResMAE Mortgage Corp. filed for bankruptcy protection this week, the latest sign of stress in the market for low-end home loans.

    ResMAE said it plans to sell most of its assets to Swiss bank Credit Suisse (NYSE:CS – News) for $19 million as part of its bankruptcy reorganization, according to the Monday filing.

    ADVERTISEMENT
    ResMAE is the latest subprime lenders to descend into crisis. Mortgage Lenders Network USA had to be bailed out by Lehman Brothers (NYSE:LEH – News) earlier this year, while rival Ownit Mortgage Solutions filed for bankruptcy in late December.

    New Century Financial (NYSE:NEW – News) shares have lost almost half their value this year. The lender said last week that it found errors in the way it accounted for subprime mortgages. Banking giant HSBC Holdings (NYSE:HBC – News) disclosed problems in its subprime business last week too.

    ResMAE was started in late 2001 by Jack Mayesh, Edward Resendez and William Komperda, who had sold Long Beach Financial, another subprime lender they founded, to Washington Mutual (NYSE:WM – News) in 1999.

    ResMAE grew quickly to become a top 20 subprime lender in the U.S. However, by early 2005, loan originations began to wane, knocking ResMAE’s profitability. By cutting costs and lifting the interest rates it charged on loans, the company said it was able to make a small profit last year “despite the industry collapsing around it.”

    But then Merrill Lynch (NYSE:MER – News), which had become the largest buyer of ResMAE’s loans, asked the company to repurchase more than $300 million worth of loans. That “enormous” repurchase request, which ResMAE disputes, triggered a liquidity crisis and forced the company to put itself up for sale.

    The repurchase demands “crippled ResMAE’s operations by requiring the company to post enormous reserves, which dramatically reduced its capital and operating liquidity,” the company said in its filing.

  99. jayb says:

    Here’s a link to a Journal article about subprime market. I don’t know if it’s been posted elsewhere.

    http://online.wsj.com/article/SB117138558855607330-email.html

    I believe many problems could be solved if people were properly educated in this country. Unless you major in these areas, you’re never forced to learn anything about basic finances, mortgages, investing/retirement, economics, etc., at any level of schooling. Anyway, my lowsy two cents. Here’s some education quotes I like:

    All who have meditated on the art of governing mankind have been convinced that the fate of empires depends on the education of youth.
    Aristotle

    If we value independence, if we are disturbed by the growing conformity of knowledge, of values, of attitudes, which our present system induces, then we may wish to set up conditions of learning which make for uniqueness, for self-direction, and for self-initiated learning.
    Carl Rogers

    and some of you will like this one…

    An educated person is one who has learned that information almost always turns out to be at best incomplete and very often false, misleading, fictitious, mendacious – just dead wrong.
    Russell Baker

  100. bergenbubbleburst says:

    #84 BC Who would have thought the 80’s would be looked back on as a more prgmatic and conservative time. The Boss, Billy Idol, Mellencamp, The Police, etc.

    Mavbe the music will coem back too,although it will live forever with me.

  101. Clotpoll says:

    What about mullets?

  102. Pat says:

    http://quote.bloomberg.com/apps/news?pid=20601087&sid=asnHly8ifIIc

    Art at HSBC says we’re OK on the A’s. I can sleep better now, I guess.

  103. Pat says:

    Mullets are still a commonly-requested cut in many areas of Pennsylvania.

  104. skep-tic says:

    #83

    to be honest, I find the NJ idea of mandatory lawyer involvement in RE deals distasteful. it seems like an abuse of power by the NJ bar to me. if people don’t want a lawyer, they shouldn’t have one forced upon them. I mean you’re even entitled to refuse a lawyer in a death penalty case!

    in any case, it seems that the NJ attorney review process doesn’t really address the problem of RE agents giving advice beyond their expertise. it just adds another layer of advice on top of it

  105. James Bednar says:

    More on Masco.

    Masco Has Fourth-Quarter Loss, Will Cut 8,000 Jobs

    Masco Corp., the maker of Behr paint and Delta faucets, posted its first loss in five years and will fire about 16 percent of its U.S. workforce after a slump in the U.S. housing market. The company also forecast 2007 profit lower than analysts anticipated.

    The fourth-quarter loss was $187 million, or 49 cents a share, compared with net income of $173 million, or 41 cents, a year earlier. Taylor, Michigan-based Masco today said further weakness in the housing market might push 2007 earnings per share to $1.50 or less, including unspecified charges for the job cuts.

    Masco will cut 8,000 jobs by the end of the first quarter, including 1,000 salaried positions, Chief Executive Officer Richard Manoogian said today on a conference call. Fewer purchases at Lowe’s Cos. and Home Depot Inc. and the slowdown in new home construction, which accounts for 40 percent of Masco’s sales, hurt revenue in the fourth quarter.

    Severance costs will be “significant,” Manoogian said. He declined to give a figure for the charges.

  106. James Bednar says:

    in any case, it seems that the NJ attorney review process doesn’t really address the problem of RE agents giving advice beyond their expertise. it just adds another layer of advice on top of it

    It would likely be argued that any statement made by the agent was nothing more than “puffing” and did not constitute advice or a statement of fact..

    —-

    http://www.answers.com/topic/puffing

    Puffing – An opinion or judgment that is not made as a representation of fact.

    Puffing is generally an expression or exaggeration made by a salesperson or found in an advertisement that concerns the quality of goods offered for sale. It presents opinions rather than facts and is usually not considered a legally binding promise. Such statements as “this car is in good shape” and “your wife will love this watch” constitute puffing.

    ——

    http://www.foreclosurenet.net/foreclosure_resources/articles/disclosure_laws.asp

    Puffing”

    There is a long standing practice used by real estate agents that can prevent you from getting all the information you need to make a proper purchasing decision. It’s called “puffing” or “puffery.” Puffing is making statements that sound very good, but contains no facts. “Great neighborhood,” “A true bargain,” “It’s a very quiet neighborhood.” Accepting these kinds of statements in lieu of specific facts can get you in trouble.

    There are unethical sales agents that use this tactic purposely to either mask their knowledge of the property or to intentionally avoid disclosing negative information.

    If you are told, “it’s a great neighborhood,” and find a crack house around the corner, you might be greatly disappointed. “This is not a great neighborhood,” you would argue. If, in the agents opinion, the neighborhood is turning around and improving, he may consider it great. Now imagine yourself in court arguing over whose opinion is more correct than the other.

    jb

  107. bergenbubbleburst says:

    #106 Pat And In Sussex county too, and in Ringwood.

  108. chicagofinance says:

    Pat Says:
    February 14th, 2007 at 1:25 pm
    Mullets are still a commonly-requested cut in many areas of Pennsylvania……

    Shea Stadium has a “Kiss-Cam” where the camera focuses on a couple and they are supposed to kiss for the crowd….

    Citizens Bank Park (Philly)has a “Muscle-Cam” where the camera focuses on a beefy guy and he is supposed to flex for the crowd….

    PNC Park (Pitt) has a “Mullet-Cam”…..nuff said

  109. bergenbubbleburst says:

    #104 Clot: never did the mullet thing but definitely the Frye Boots and Levis.

  110. skep-tic says:

    yes, “mere puff”– one of the great euphemisms of contract law. Most people call it “BS.”

    I’m thinking more along the lines of specific representations realtors make, such as the frequent claim of “expansion possibilities.”

    How often do you suppose that the agent advertises “expansion possibilities” w/o really knowing whether the applicable building code allows it?

  111. chicagofinance says:

    I gave this article to grim….he’ll post it if it makes the cut……

    WSJ
    How Good Are
    Zillow’s Estimates?
    Popular Home-Price Web Site
    Often Gets It Right but Can Be
    Way Off the Mark, We Find
    By JAMES R. HAGERTY
    February 14, 2007; Page D1

  112. chicagofinance says:

    In investment banking they called it “posturing”, one of the old AT&T Assistant Treasuers called it “lying”.

  113. James Bednar says:

    I’ll post that one up at the top a little later tonite. I’m always afraid that if I post a new topic up below the “main topic”, people won’t scroll down far enough to see it.

    jb

  114. James Bednar says:

    From Bloomberg:

    Dodd Chides Bernanke on Deceptive Lending Practices

    U.S. regulators’ are failing to do enough to protect consumers from deceptive lending practices to the riskiest mortgage borrowers, Senate Banking Committee Chairman Christopher Dodd told Federal Reserve Chairman Ben S. Bernanke.

    Dodd cited a December letter he and his committee colleagues sent to bank regulators, including the Fed, urging them to expand consumer protections for subprime mortgage borrowers, those with weak credit who are typically subject to higher interest rates.

    “The letter we got back, frankly Mr. Chairman, was a little inadequate,” Dodd told Bernanke today during the Fed chairman’s semiannual appearance before the committee. Dodd said he wanted to know the regulators were taking additional steps.

    Bernanke said, “Evidently, some loans have been made that are not turning out well, to the detriment of both the lenders and the borrowers.” He said the Fed and other regulators “will certainly be watching that carefully and trying to provide guidance and oversight to minimize that risk going forward.”

  115. 2008 Buyer says:

    The current tighten in the subprime market is because of a long delayed correction of loose underwriting. All loans out there can be bought with the appropriate risk based price attached. Riskier borrower credit equals higher interest rate. Question becomes: can you afford higher mortgage payments? If so, for how long? If not, can you sell your property and not have to go to closing with money to pay off the loan?

    Some of these borrowers with ARMs that are resetting, if they did not run up their credit cards, buy new cars, etc (yea right) and maintained a decent FICO score they should be ok. The ones who didn’t follow prudent financial constraint will hope to qualify at higher rates. And although its not talked about openly in the news…hope you don’t have to go to the last resort and turn to a “hard money” lender. Can you say 12+% rates.

  116. UnRealtor says:

    Chicago, here’s a free link to that WSJ article:

    How Good Are Zillow’s Estimates?

    In the year since its launch, Zillow Inc. has made millions of Americans familiar with computer-generated estimates of home values, created a new online addiction and become a staple of dinner-party chatter.

    But just how accurate is it? A Wall Street Journal analysis of 1,000 recent home sales shows that Zillow’s “Zestimates” often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible — off the mark by more than 25% on one in 10 homes. In one case it was off by $2 million.

    http://news.google.com/news/url?sa=t&ct=us/0-0&fp=45d3ce3607105ddb&ei=51_TRcWgIsqMsgGX1tz0Dw&url=http%3A//online.wsj.com/public/article/SB117142055516708035-Cj_zawH26xEw_leHJbP2enSNIfU_20070316.html%3Fmod%3Dtff_main_tff_top&cid=1113611755

  117. Clotpoll says:

    skep (107)-

    NJ lawyer involvement in RE is NOT required. You can take your deal straight to a title company and never get within a sniff of a lawyer.

    Opinion 26- establishing an attorney review period (among other things)- was wrangled out of the courts by a legal lobby that was afraid that they’d be completely locked out of the RE transaction when agents were given the right to prepare form contracts on all RE the size of 4-unit dwellings or less.

    If parties to a deal do not use attorneys, the contract is considered binding upon full execution of the document. Also, a principal may use an attorney- and invoke the right to attorney review- for a simple initial review of the contract. Then, that principal can turn everything over to a title company. Some title companies even offer a staff lawyer for the initial, one-time review.

  118. Clotpoll says:

    I am the king of moderation (120)! I think it’s over the word “execu+ion”. Wow…

  119. njrebear says:

    http://www.marketwatch.com/news/story/accredited-home-lenders-stops-making/story.aspx?guid=%7BC2036B14%2D5F8D%2D4D6B%2DA8FA%2D737D5EBC31F3%7D&siteid=yhoo&dist=yhoo

    Accredited Home stops making riskier loans
    Subprime lender reports loss amid higher delinquencies, repurchases

    I] Restrictions on Subprime stated loans.

    II] No second mortgages.

    Incentive plans for sales staff have been changed to reward credit quality and more senior managers have been asked to oversee the underwriting processes, Lydon noted.

  120. BC Bob says:

    “I am the king of moderation”

    Clot,

    Poor man wants to be rich, rich man wants to be king, and the king is not satisfied until he owns everything.

  121. RentL0rd says:

    Do the sellers and buyers sit together at closing in NJ, along with the Realtors and Lawyers?

    This was how it is in some states.

    However when I bought a house in KS, much to my surprise the only folks I met were the title people (along with my realtor). The buyers had already got the money and taken off ;-) – we had wired the money a couple of days before closing.

  122. BC Bob says:

    bear [123],

    Market forces will, and are starting to bring this credit expansion to a halt. A crisis scenario with an imploding hedge fund is not required to shut this door, however that possibility is certainly plausible. Increased volatility [which is what is happening in the subprime]tends to apply enough pressure. As volatility increases, speculators usually pare down their leverage.

  123. Clotpoll says:

    RentLord (125)-

    There’s no set procedure. Depends on the wishes and schedules of all concerned. Many closings are done by mail…the seller gives his lawyer POA, the seller’s lawyer delivers all pertinent materials via mail, and the buyer’s attorney closes the loan, closes title and makes the payoffs on the other end.

    There are also platforms in place to make the entire procedure electronic, from beginning to end. These “electronic closings” have already worked their way into the refi process, but the law lobby is resisting their use in purchase money transactions.

  124. SG says:

    NYTimes: New Jersey Plans to Increase Bus and Train Fares by 9.9 Percent

    http://www.nytimes.com/2007/02/14/nyregion/14transit.html?_r=1&oref=slogin

  125. Hard Place says:

    re: mullets.

    There was a great Miller lite commercial a while back that compared jokingly Miller Lite to a mullet. “Great taste and less filling. The mullet is the best of both worlds. Long and short hair.”

  126. rhymingrealtor says:

    Rentlord

    If my client is attending the closing, the I do.

    KL

  127. BC Bob says:

    “NYTimes: New Jersey Plans to Increase Bus and Train Fares by 9.9 Percent”

    In addition to this, we recently read that electric rates will be going up approx 14%. No inflation??

  128. RentL0rd says:

    Thanks Clot and KL.

    I just found it wierd not to see the sellers. We were obviously curious who they were.

    Houses really didn’t/don’t appreciate much in the mid-west, even during the bubble.

    The sellers made a whooping $87 after being owners for 2 yrs during the boom period (2000 – 2004).

  129. Clotpoll says:

    Must be a snow day…Springsteen posts, ’80s nostalgia, mullet redux and Uncle Ben managing to spend 2 hours saying absolutely nothing. I wonder what really goes thru his head while the morons we call “Senators” make their self-serving speeches (masquerading as questions). I’d pay good money to hear Ben reply- after one of these stemwinders- “could you repeat that question…I’m not sure I heard you.”

    A few follow-up questions, if you’re still uncertain whether you’re a dork:

    1) You have a framed, autographed poster of Nouriel Roubini.

    2) You read Barron’s cover-to-cover every weekend…but believe they are way too optimistic about things.

    3) Prolonged exposure to sunlight irritates you.

    4) The living level of your current residence is below-grade.

    5) You have already gifted your children lifetime subscriptions to Consumer Reports.

    6) You attend open houses in disguise and sign-in with fake names and contact info.

    7) You equate housing prices to how many used Toyota Camrys you can buy with the same amount of money.

  130. Duckweed says:

    About closing procedure.

    Of course, you could be in California and add escrow folks into the mix. A lot of these intermediaries are ubiquitous, whether legally required or not. In California, I had the fortune of attending lectures by a professor who specialized in mortgage and real estate law (too bad little retained). Topic turned to the escrow system in California and he lambasted the layer of extra expense for protection that is not needed in most cases. He compared his most recent California house purchase (a foreclosure) to his experiences in other states and gave a figure representing his extra cost for the escrow service which he considered a pension subsidy to retired Bank loan officers a.k.a. escrow agents. At the point we already established that buyers and sellers could forgo escrow agent, notwithstanding the prevailing practice in the state.

    Rather confused by that point, I raised my hand and asked: “Professor, sorry if this is a stupid question. You are just about more knowledgeable about these rules than anyone else. You said escrow in CA is totally unnecessary, a waste of money and I think that makes sense. So why did you went through escrow?”

    A pause generally ensued, then rolling laugh. He laughed too and tried to speak up several time: “Well, when we moved here…” When it quiets down, he explained, “my wife just wanted that house. It doesn’t matter that you know it is stupid. When you say you don’t want escrow, all kinds of alarm goes off and the other side thinks you are up to some trick.”

    He concluded, “I just didn’t bother.”

    The morale of the story to me is that even the most informed buyer can only go so far. And irrationality is the norm.

  131. chaoticchild says:

    BC Bob Says:
    February 14th, 2007 at 3:38 pm
    “NYTimes: New Jersey Plans to Increase Bus and Train Fares by 9.9 Percent”

    In addition to this, we recently read that electric rates will be going up approx 14%. No inflation??

    And the Fed says Inflation is not a concern.

    CC

  132. Clotpoll says:

    Duckweed (134)-

    And, of course, California ratchets up the insanity another notch by being a trust deed state.

    BTW, NO state in the US has a wackier, more byzantine closing process than New York. In NY, it is customary for title insurers to both attend the closing…AND receive a gratuity!

  133. BC Bob says:

    “3) Prolonged exposure to sunlight irritates you.”

    …..only if I’m sitting in Yankee Stadium watching Useless-Rod, go 0-4. However, different theme if I’m in LBI and can escape the sun with a trip to the Terrace Tavern.

  134. Clotpoll says:

    BC (137)-

    I predict you’re gonna be irritated a lot this season. A-Clod may actually grip a bat so tight that it snaps in half while he’s waiting for a pitch.

    I like his new children’s book, though. It’s an elegant cry for help.

  135. Clotpoll says:

    Look what Steinbrenner’s 20 MIL bought him this offseason:

    http://www.amazon.com/Out-Ballpark-Alex-Rodriguez/dp/0061151947/sr=8-1/qid=1171487337/ref=pd_bbs_sr_1/104-4295894-0522350?ie=UTF8&s=books

    They may start cheering this guy at Fenway. I would.

  136. njrebear says:

    In my estimate, Real Estate turn around will happen in either Spring, Summer, Fall or Winter.

  137. PeaceNow says:

    I can’t imagine not seeing the buyers either, RL. In NYC, closings are attended by lawyers, buyers, sellers, brokers, bankers and title guy. I was a paralegal for a while, and understand that in some states they can attend the closing, rather than an attorney.

    And, to whoever posted that a death-penalty defendant can refuse a lawyer…well, that probably isn’t true. I have a relative who’s a public defender, and he’s had clients who refused his services in the past. But then what happens is he sits in the back of the courtroom to monitor the defendant. Judges won’t let you represent yourself unless you can demonstrate you have enough knowledge of law and courtroom procedure to provide yourself with adequate representation.

  138. 2008 Buyer says:

    Dark side of the housing boom: Shoddy work
    (Money Magazine) — Less than a year after moving into her new 2,100-square-foot house in Lenexa, Kans., Susan Sabin has strung up lemon lights in her front window.

    The lemons, she says, go perfectly with the home’s most prominent features: jammed doors, warped windows, bent pipes and cracked walls. “The house is essentially splitting in two,” says Sabin.

    http://money.cnn.com/2007/02/13/magazines/moneymag/construction.moneymag/index.htm?postversion=2007021413

  139. bergenbubbleburst says:

    Off Topic: sorry to do this again, but I am back with the car situation.

    I am looking at a 2005 Nissan Maxima, delaer started with 16,995 certified, I can buy a new (supposedly) 2006 from Cars Direct for 16,400, which I told the dealer. the new car comes with 36k 3 mile warranty.

    I stonewalled the dealer, he came back with 15,800 certified, (the certified extends the waranty to a total of 70K or 7 years (from 05) The car currently has 23k miles on it.

    I said it still was not compelling enough, the manager came back with 15,500 certified.

    I am thinking countering at 14,500, and setteling at 15,000, if I have too.

    Any thoughts from you guys all around (including the car itself), would be appreciated.

  140. James Bednar says:

    Clot/KL,

    What is with all this junk mail I’ve been getting? This is just one day’s worth. Do all the agencies do this? Did I miss the “Do not promote” checkbox on the application?

    Junk Mail

    jb

  141. rhymingrealtor says:

    Hey Clot,

    Snow day is making me silly, lets play a game, it’s called guess what Real Estate brokerage wrote this description:

    (((ARRANGED OVER FOUR GENEROUS FLOORS, THIS BEAUTIFULLY PRESENTED COLONIAL BOASTS CAREFULLY REMODELED LIVING ACCOMMODATIONS. AFTER A LONG DAY RELAX IN THE COMFORTING DEN AMIDST A POOL OF RICH SUN FLOODING THROUGH THE IMPOSING WINDOWS. THE FINE LIVING ROOM BOASTS AN INTRICATE STAINED GLASS WINDOW AND A GRAND WOOD FLOOR. HOST DELIGHTFUL DINNER PARTIES IN THE DINING ROOM WITH PLEASING MEALS PREPARED IN THE MODERN KITCHEN. FOR A RELAXING RETREAT ASCEND TO THE SECOND FLOOR TO THE THREE SPACIOUS BEDROOMS. THE THIRD FLOOR FURTHER FEATURES AN OPEN AND AIRY FOURTH BEDROOM. FOR ADDITIONAL SPACE THE FINISHED BASEMENT PROVIDES A SUBSTANTIAL FAMILY ROOM COMPLETE WITH A HALF BATHROOM. OUTSIDE IN THE BACKYARD ENJOY THE WARMTH OF THE SUN AND A BREATH OF FRESH AIR. THE PROPERTY IS IDEALLY SITUATED WITH A CLOSE PROXIMITY TO MAJOR HIGHWAYS AND MASS TRANSPORTATION TOWARDS NYC AS WELL AS FINE SHOPS AND RESTAURANTS.))))

    And for extra credit tell me how many times it says the word “Boasts”

    (-:

    KL

  142. Clotpoll says:

    Grim (144)-

    Those brokers’ bonuses and vacations are tied to getting your a$$ chained into a chair in their offices. Welcome to RE!

    Hey, the sooner you go to one of these places, the sooner you get those “Glengarry leads”!

  143. Clotpoll says:

    KL (145)-

    Thanks for the distraction. I was about to shoot my kids.

    The mangled syntax and the wretched prose that fails to convey a sense of elegance leads me to guess it’s Burgdorff ERA ad copy.

    For bonus points: did the person who wrote this crack 400 on the SAT verbal?

    For more bonus points: describe what this little ditty looked like before the writer applied SpellCheck.

  144. Clotpoll says:

    Grim (144)-

    Kudos on the photo montage. Very Casey Serin-like.

  145. Hard Place says:

    bergen –

    The Maxima is a good car. For 16.4k brand new 2006, sounds like a decent deal. Not significant enough of a difference from a 15k 2005 w/ 23k miles. Not sure if we’re comparing apples to apples here. Options can make a huge difference in price.

  146. SG says:

    Zillow.com just released a new report assessing the trend in home values across the country. Granted, you could question the accuracy of Zillow’s findings, since it isn’t based just on home sales but on Zillow’s proprietary assessment of home values, but it’s still a fun exercise.

    The bottom line: Zillow says nationwide, home values were down 0.5% year-over-year and values declined 4.77% in the fourth quarter alone. The folks at Seattle-based Zillow say it’s the first 12-month decline they’ve seen in their data, which goes back as far as 1997.

    The three highest-appreciating metro areas over the past 12 months were:
    -Lakeland-Winter Haven, FL (25.88%)
    -Yuma, AZ (25.66%)
    -Myrtle Beach, SC (21.24%)

    And the three metro markets that suffered the largest year-over-year decline:
    -Panama City, FL (-11.84%)
    -San Luis Obispo-Atascadero-Paso Robles, CA (-11.35%)
    -Punta Gorda, FL (-9.23%)

    http://www.businessweek.com/the_thread/hotproperty/archives/2007/02/whos_hot_whos_n.html

  147. BklynHawk says:

    Sam #149:

    Now, if I look at those pictures, I would wonder what the situation is there? It looks like half the rooms are empty?

    Are they so hard up they can’t afford furniture?

    Anyone, stories on strange open houses where you’ve seen half empty houses, or worse?

    JM

  148. James Bednar says:

    Clot,

    You watching Nouriel on Kudlow?

    jb

  149. RentL0rd says:

    I have an 02 maxima – bought new. The engine’s made in Japan. Not sure about the newer models. I believe the Altima’s engine comes from TN.

  150. Willow says:

    #152

    It could be a divorce where one person took a lot of the furniture.

  151. rhymingrealtor says:

    Sam !!

    Googling could be considered cheating but… you win a partial prize- It’s foxtons but not that house. That is a typical foxtons description. I think they have them categorized by floor levels, colonial or cape etc. then they change a couple words, wella~!

    Clot,

    I have seen some wordy Burgdoff listings but they don’t slum it down here. Partial prize for you too. Back in the 70’s we had a broker in town ( he’s still here) who would only list properties in a certain area and even then he would sometimes refuse,( BC Bob probaly knows the area) so if he agreed to list your home you knew you were important hah! funny what people will do if they think your doing them the honor!
    Oh with regard to the kids being home, wait till you have a teenage boy with smelly friends. He went to play football in the snow and the kids were texting him hey you don’t need a shower to play football man, hurry up ! I’ll no longer complain my son takes too long in the shower, a teenage boy who takes 2 showers a day is a delight. When their wet from snow, its worse than a wet smelly dog!

    Please please let there be school tommorow )-:

    KL

  152. shopping around says:

    Can someone provide me with the address for
    2374897?

  153. Lincoln78 says:

    Hmmm… who can we BLAME?!?!?

    http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/TheSecretToSuccessInTheMiddleClass.aspx

    “A more flexible definition for middle class would be having the resources to cover all your needs and some of your wants, plus the ability to save for the future.

    That definition:
    Doesn’t necessarily mean homeownership, although it probably will; homeownership is still an achievable goal in most of the U.S., where close to 70% of all households own their own dwellings.”

    “Those who are too eager to buy the trappings — the “wants” — are the ones who wind up with credit card debt and who overspend on homes , educations and cars.”

    BAH! What does she know anyway?!?! Obviously one of those doom and gloom “housing bubble” believers!

    Sorry if a repost

  154. RentL0rd says:

    KL, Does anyone even read the description?
    I don’t. here’s what I look like in the order of priority at a listing (after location and price):

    lot size,
    mbr, other br sq. footage,
    kitchen size,
    virtual tours if any.

    At this time, if it still makes the cut, I drive by.

    I like the plan-layout that Foxtons provides.

  155. Willow says:

    #159

    “who overspend on homes , educations and cars.”

    I never really thought about all the people who take out home equity loans to pay for their child(ren)’s college education. People need to live within their means and if they can’t afford that really expensive private university, then their child should go to the local state college that costs $6,000/year. It’s not like you can’t get a job or get into graduate school by going to a state school. The other thing I can’t understand is going into debt so your child can go away to college. There is some value in it but not enough to pay an extra $10,000 -$15,000/year.

    I know people who are determined that their children will go away to expensive schools even if they have to mortgage their homes. I guess it’s a status thing.

  156. UnRealtor says:

    Willow, #161, and going to an “out of state” school carries a pointless markup, because for all the locals it’s the $6K a year local school, while your kid pays $16K to attend the same school.

  157. njrebear says:

    http://www.ssmwholesale.com/

    As of 12:00 PM PST, Silver State Mortgage has ceased all national operations. Although this is a difficult time for our loyal broker and builder clients, we are confident that the current opportunities that we are evaluating with other financial institutions will provide a stronger platform for our trusted clients.

    >>

    from lenderimplode

  158. Lincoln78 says:

    Willow,

    Being a recent (enough) Rutgers graduate (’01), not only have I seen countless people go to state schools in another state, many go to private schools that IMHO don’t even provide a comparable education (while paying a hefty tuition premium).

    Not to get off topic, but the reasons people give are silly (just as silly as some of the “buy now” stories i’ve read here!):

    – I wanted to get away from home
    ( I grew up 1hr away from RU and was far enough away )

    – They have a great such-and-such program
    ( Most didn’t even finish in that program)

    – I love the campus!
    ( For $15k+ more a year?)

    – I’ve been a fan of their football team since a little kid
    – Ugh… EVERYBODY in my class is going to Rutgers
    ( I won’t even comment on these!)

    Don’t get me wrong, there are plenty of excellent private and non-NJ public schools. In the end, if you’re taking out loans to enable you to go to a private / non NJ public institution, I hope it’s for a really good reason!

    GO KNIGHTS ;-)

  159. njrebear says:

    http://www.thestreet.com/_yahoo/markets/metals/10338924.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

    “the European Central bank says it sold 70 million euros of gold and receivables last week, or about 4.3 metric tons”

    >>
    According to Wiki, European Central Bank holds 710 metric tons of gold. Last week, gold went up 1 percent.

  160. AntiTrump says:

    #143 bergenbubbleburst:

    I don’t know where the current model of maxima is manufactured. The vehicles coming out of the Nissan plant in Tennesse are having a lot of quality problems. Cars made in japan are still fine.

  161. BC Bob says:

    “the European Central bank says it sold 70 million euros of gold and receivables last week, or about 4.3 metric tons”

    bear,

    ……..and Dubai is sucking it up faster than a hummer/oil.

  162. BC Bob says:

    That’s gasoline,have crude oil on my brain.

  163. Willow says:

    #165

    I went to Trenton State and Montclair State at a time when a $2,500 student loan would almost pay the entire bill (tuition/housing). My parents had to come up with $900/year for my education. When I transfered to Montclair as a commuter, I didn’t need a loan because it was so inexpensive.

    It seems more and more people feel that it is a given that their children should go away to college and that their parents should pay for it. My children already know that unless they get a scholarship, they will be commuting to college – most likely Montclair or William Patterson. I will not go into debt to finance them going away to school. My husband was laid off right after 9/11 for a year (ate into our savings big time) so the most important thing right now is saving for retirement.

  164. abamitphd says:

    #143

    be sure it doesn’t have the high-intensity headlights.

    i had a 2003 maxima with the high-intensity lights. they were stolen four times, the last time out of a church parking lot.

    it will cost your insurance company $4000 per incident to fix with all the auto body damage they do to your car

    and after a few times guess what will happen to your rates

  165. RoadTripBoy says:

    RE: #20 & #26
    I feel the same way about transmissions. Both my cars are stick, and I wouldn’t have it any other way! Do you know how hard it was to find a Cherokee with manual transmission?

    I didn’t know I had so many car “soul mates” on this blog! I too love driving a stick and refuse to have it any other way. Sticks are superior to automatics in the following areas (all other things about the car being equal): a)better acceleration; b)better fuel economy; c)better control and stopping ability on slippery roads; and d) they’re just more fun to drive!

    My current vehicle: 2003 Pontiac Vibe, Neptune, 5 speed manual; 1.8l 16 valve in-line 4; 29 city; 36 highway and I would get the 36 on the highway if I could force myself to drive no more than 60mph on the highway—but alas, 75 is much too tempting and easy in this vehicle.

    Not to give a sales pitch, but this vehicle is a great SUV alternative. It’s not tippy, though it is raised, kind of like a Forester. It has lots of room for people and cargo. I can carry my bike in the back by folding down the rear seats. My 77 year old father can get easily in and out of the back seat. The best part? Toyota reliability—yes both the Matrix and the Vibe roll off the same assembly line and are identical except for the body style.

    Now you can see why I refer to myself as RoadTripBoy! :-)

  166. bergenbubbleburst says:

    Thanks fo all the advice guys on my potential purchase of a Nissan Altima, but after much discussion again last night with my beetr half, I think we are going to got with the Toyota Highlander. Well here we go again, back to the web, back to the dealers etc etc.

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