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From WNBC:
Nine Arrested On Mortgage Fraud Charges
The FBI arrested nine people Wednesday on charges of engaging in a multimillion-dollar Queens-based mortgage fraud conspiracy, authorities said.
Assistant FBI Director Mark Mershon said 10 people were named in court papers, which identify three of the conspirators as principals in New Generation Funding, a mortgage broker with a branch office in Jackson Heights. Court papers say they recruited “straw buyers” from the Bangladeshi community to purchase properties with false identities and to secure mortgage financing.
The court papers say the object of the conspiracy was to obtain money on credit with no intention to repay. The alleged members of the conspiracy repeatedly sold the mortgage properties among themselves, thereby increasing the appraised value for each property, the court papers say.
Homebuilders report major losses
Thursday April 26, 6:17 pm ET
http://biz.yahoo.com/bizj/070426/1454344.html?.v=1
Two major homebuilders with several development in the Greater Sacramento area announced big losses on Thursday for the first quarter of the year.
Beazer Homes USA Inc. reported a net loss of $43.1 million on total revenue of $826.3 million.
That’s down 35 percent from $1.27 billion in the same quarter last year. The loss comes as the company took $86.9 million in charges, including abandoning land contracts.
Pulte Homes reported a net loss of $85.7 million for the first quarter of 2007 compared with $262.6 million of net income for the same quarter last year. Revenue declined to $1.9 billion, a 37 percent drop from prior year revenue of $3 billion.
First quarter GDP due out at 8:30am est.
Rt. 17 flooded…again :(
Was wondering:
Last week there was an article about a TV show, the Husband was a Stanford professor and they bought a 600K house on 120K income.
That is similar to what myself and someone else if I got married could make. And simliar to what husing prices should be in Fort Lee with the predictions here.
Whats wrong with doing this?
12K a month gross
2-3K taken out of the paycheck ( taxes ect )
9K left
4500 mortgage on 600K ( approx )
800-1000 taxes
3.5K A MONTH which is plenty for all the FortLee/Bergen County consumerism.
What am I missing here this sounds very affordable? I mean renting and putting 4K a month into investments also makes sense too.
I have not posted here before (usually just lurk) but, as it is open discussion, was hoping that some of the industry pros could provide some guidance.
I have been searching for a home in the upper Passaic county area for several months now and have been lucky enough to see the bubble at work. Prices are dropping and I do feel like I have power as the buyer.
Now we think we’ve found a good value and we’re ready to buy, but the home has a leaking oil tank problem. The seller has removed the tank, but ran out of money before cleaning up the (approx 8k worth) leaked oil. USTs have been a theme in our home search. They are willing to come down further on price, but want us to remediate with money in escrow after closing.
So, (a) is this oil tank crisis as widespread as it seems to be in my subjective experience
and
(b) is this a bad deal? Too much risk, right?
I know you guys primarily crunch numbers, but thanks for any guidance/conversation you can supply. I am sure I will get a variety of opinions here!
allisonline: I assume by upper Passaic county you mean West Milford/Ringwood?
Anyway, leaking oil tank, forget it. Plenty of houses available…no need to buy now anyway, right?
Leaking oil tank, forget it!!! Run away…far away.
Selling Your Credit Score…
Barry Ritholtz submits: Here’s the latest scam to hit the Real Estate/Mortgages/Credit/FICO market: Buying and Selling FICO scores to qualify sub-prime applicants for tightened standards.
Kenneth Harney explains how this loophole is now being used:
When your credit scores don’t qualify you for the home mortgage you want, where do you turn? That’s an especially timely question now, as banks and mortgage companies tighten underwriting standards for applicants with less than perfect credit.
But federal and state authorities fear that some borrowers are turning to a fast-growing business on the Internet: companies that claim to boost credit scores by transplanting the credit DNA of people with excellent payment histories into the credit files of people with subpar histories — ostensibly without breaking any law.
The companies claim to raise FICO credit scores by 50 to 250 points by adding low-scoring borrowers as “authorized users” on the credit card accounts of people with FICO scores well in excess of 700. The positive payment information from such cardholders then flows into the files of the persons with subpar credit.
http://financial.seekingalpha.com/article/33487?source=d_email&u=13445&ref=patrick.net
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this scares me. i’m 1 of those people who religiously monitor my FICO score as i’m in the market for my 1st home. not only i was shut out by the rampant high prices, and now this is? this is incredible. wonder why i’ve been thinking of moving to asia. this is ridiculous. what do they think of next?
sigh
R Partick [5],
Are you, [is it available] contributing to a 401k. If available, max this out first. If your employer matches, it’s a slam dunk. You work hard for your money. Let your money work hard for you.
120K/12 = 10K
allisonline,
I agree with TBG, run away as fast as possible. There is a reason why the owners are running out of money. You don’t need to close on a house and have a landlord, DEP. It’s is a nightmare lurking. I can’t imagine any other scenario, worse than this, to greet you on day 1.
Jase Rion,
This is a common technique used when someone with good credit gets married to someone with bad credit. The good credit spouse will simply add the bad credit spouse to their longest good pay credit card as an authorized or joint user. The bad credit spouse will see their FICO jump as they get the benefit of the good payment history. In the past this benefit was only available when the spouse was added as a joint cardholder (thus responsible for the any debts incurred on the card). It doesn’t work miracles in every case, sometimes only bumping the FICO up by 20 points or so. However if you are in a situation where that point difference results in a bad classification, it could result in big savings over the life of the loan.
jb
thanks jb.
JB [3],
Did Yellen let the cat out of the bag?
R Partick,
In that article, did they mention how much was put down for a downpayment?
We’ve been looking in N. NJ for about a year. Basically in Livingston and Morris county. We have noticed that prices have come down in only one of the towns we looked in – Randolph. The prices are down $50K – $100K for those that were in the $700K – $800K range. Are there other towns where anyone has seen meaningful decreases? In Livingston and Montville we have seen a slower market and steady or modestly lower prices, but nothing signficant.
JB: #1 comment awaiting moderation.
Rich
No they did not mention a downpayment amount but since the numbers echo our neck of the woods I was trying to figure it out.
Once I get some psych help to work on the same issues Make Money was talking about yesterday, and address my underemployed and Maslow needs I can then get going on the future.
And about the 401K match I agree with that, ( I need a real job first ) but I was told that since we are in a high inflationary environment that small investors are losing money by simply saving. And I think the Dow and the Markets are overheated.
I have school loans, a fixed mortage, and want to start saving for retirement, secuirty, and someday a house somewhere.
If the market crashes and I paid off the house then I not the mortgage company is holding the bag if I default.
I think I should invest in the 401k and possibly the 4k roth first since it will have the most time to grow ( paying off 1k in debt now, versus getting 20K back in 30 years from 1k in investment now )
I want security/car dies/need 3k in dental work money so I can have options. I like options. Maybe 10-20K since I do not have children in CD’s or something.
School loans are variable, but the interest is an above the line deduction, but RN’s make too much money to get the deduction. I was thinking this should be part of my payoff stratedgy, at least paying off the back interest this year in the year it’s deductable ( 1/2 years income ) while doing the 401K and getting some security money. ( Again see Maslow )
I want to budget in some fun, I have friends where they make good money. But it all goes to accounts payable ( like the Mortgage ), and they never get to enjoy any of it. And that is sad, to work all week and then not have any fun.
Any advice?
GDP is ugly
Regarding the oil tank:
Not a good situation. I have a customer that’s been trying to sell her home after discovering a leaky oil tank and consequently, contaminated ground soil. Well, so far the bill has exceeded 40K and it’s not over yet. The ground water needs to be monitored at some ridiculous expense to ensure the surrounding aquifer is not being affected. And besides don’t be in such a rush to buy, wait and see how this whole subprime lending fiasco plays out. I don’t think the market has seen anywhere near a true correction yet.
Pavlov’s dog is still salivating. However, the meal just became less desirable.
“In the last quarter of 2006, one-fourth of Countrywide’s sub-prime borrowers took out a loan or loans for 100% of their homes’ value. In the current quarter, only 3% of the firm’s sub-prime loans will have this zero down payment, Countrywide President David Sambol said.”
“Late last year, 90% of these zero-down sub-prime loans also had adjustable interest rates — mortgages that frequently become unaffordable when initial “teaser” rates expire. Countrywide has all but phased out this risky combination, it said.”
“In fact, it became easier getting a sub-prime loan approved than a prime loan,” Eckert said. “No verification of assets or employment. FICO scores were irrelevant. And appraisals just had to be in the ballpark.”
http://www.latimes.com/business/la-fi-lenders27apr27,1,6277682.story?coll=la-headlines-business&track=crosspromo
From Marketwatch:
U.S. 1Q GDP up 1.3% annualized vs. 1.7% expected
U.S. 1Q GDP weakest since 1Q 2003
U.S. 1Q GDP price index up 4%, highest since 1991
U.S. 1Q core PCE price index up 2.2% annualized
U.S. GDP up 2.1% in past year, 4-year low
(NJ) Builder sues Web site and Google over posting
A Bergen County builder is suing a consumer-advocate Web site and Internet search-engine Google over an anonymous online posting that described his home construction as a shoddy “nightmare.”
This builder thinks he can take on google because when you put his name in the engine, in the top 10 hits is the site RipOffReport.com with complaints about his company’s crappy building.
He even rebutted on the site:
I (Raffi Arslanian) including my attorny has contacted the person who filed the report and the person has denied ever making this claim. We have contacted Rip off artist with no success. We are now left with no choice but to file a claim directed at Rip Off Artist.
Please help
My number is 201-637-6553 Raffi Arslanina
Raffi – Edgewater, New Jersey
U.S.A.
I’ll let his grammer speak for itself.
JB [21],
Slower than expeted growth with inflation higher than anticipated. When Janet is a Yellen, should we be a sellen.
From MarketWatch:
U.S. ECONOMY GROWS AT 1.3% IN FIRST QUARTER, SLOWER THAN EXPECTED, AS INFLATION FLARES
Hit by rising energy prices and a weak housing market, the U.S. economy slowed to 1.3% real annualized growth in the first quarter, the weakest expansion in four years, the Commerce Department estimated Friday. The first estimate of first-quarter real gross domestic product was lower than the 1.7% expected by economists. Growth was led by consumer spending, state and local government spending, and business investments, offsetting drags from housing, foreign trade, inventories and federal government spending. Final sales of domestic product increased 1.6%, the weakest in five quarters. Led by higher energy costs, the GDP price index increased 4%, the most in 16 years. Meanwhile, core consumer prices – which exclude food and energy costs – increased at a more moderate 2.2% annual pace
Here’s another good one:
Baby boomers going bankrupt at faster rate
WTF?! Wasn’t it just 2 years ago when the great David Lereah said that Baby Boomers were the ones who had so much equity that they were getting second vacation and investment homes?!
NEW YORK – Americans over the age of 55 are filing for bankruptcy at a faster rate than the general population as growing mortgage debt and higher health care costs make them more vulnerable, a new study shows.
Yes, the official reason for the housing bust is now because Healthcare prices have increased, leaving people less $$ for their mortgages…
Assuming most boomers bought in their 30’s, they should have had a clean 25 years of good appreciation. If they bought more then 10 years ago, their mortgages should be literally nothing compared to the mortgages people are paying today.
Thanks for the feedback re: oil tank. We actually were not in a rush to buy at first, but we went under contract on a pre-foreclosure at amazing savings, only to have the deal go bust 3 weeks before scheduled close. In the meantime, we rented our apartment, so we are now homeless. Getting a storage unit, moving in with my parents (we’re way too old for this sh*t). So now we feel like we’re in a corner. At least we’re saving additional dp $.
Live and learn, I guess. I know the contaminated soil is a bad deal, but I’m feeling desparate and needed someone to scold some sense into me. Thanks for that.
We’ve seen this in a number of houses. Is the entire state sitting on a ticking environmental time bomb?!
“Dollar Weakens to All-Time Low Versus Euro as Economy Slows”
“A soft growth number may give the market an excuse to weaken the dollar further because it is a sign that the U.S. economy is lagging behind Europe and Asia,” said Adnan Akant, head of foreign exchange in New York at Fischer Francis Trees & Watts, which oversees $38 billion in assets, before the report.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aqSitBMvs6vQ&refer=home
allisonline,
I wouldn’t nix that deal just yet. The seller is in a very bad position, and you’ve got the upper hand. With the level of inventory on the market, no buyer is going to want to deal with that headache. Use that to your advantage.
The key here is that you get your own remediation estimate, from a reliable firm, and not rely on the one provided. You need to take that estimate into account when you make your offer. The seller might be out of cash, but are they out of equity as well?
Play hardball, what do you have to lose?
jb
Being a conservative and novice investor I need a little help….
Here’s the situation: I’m a contractor that just made a larger sum of money on a home sale prior to the burst. I’d like to keep it as liquid as possible for another purchase when the opportunity arises. Currently, it’s been growing at 5.25% apy in a countrywide money market. Is it possible to grow it Would a good mutual fund make around 10% in good mutual fund without assuming too much risk? Anybody care to share?
JB –
Thanks for the feedback. We’re nervous about buying someone else’s problem. The house has been on the market 6 months, and the deal is good, but the risk is high for first-timers like us.
The seller bought five years ago for 120k less than we’re offering now, so they should have equity. Our rea says that they can’t draw a HELOC because the house is on the market, but that they can escrow cash to pay for repairs after close. I am confident that our attorney will do her damndest to protect us, but even if we escrow 25k for an 8k repair, who knows what happens when they start digging? 15-20k is nothing for an EPA problem – as we’ve discovered.
Do you have an idea what the cost/procedure would be for an estimate of the type you’ve suggested?
Contractor Bill – do you know if that epensive aquifer monitoring is standard fare?
Thanks for all the feedback – it’s nice to hear from “uninterested” people. (I feel like I can’t trust anyone involved!)
GDP release can be found here, for those interested:
http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
I defer to master grim – lord of Treasury Direct
Bill: given your objectives, you are rocking the house – if you believe that you are going to sit on that money for more than 24 months…you could allocate a swath [no more than 25%] to something riskier.
MLS: 2372813
This home was listed for $850k not too long ago under a different realtor. It’s now listed at $699k. It’s been on the market for almost a year now (can’t remember for sure, but it’s been a loooong time).
I know that it’s been EMPTY for some time now. It’s on Jacksonville Road in the Towaco section of Montville. Needless to say, to see a $150k drop on this price is pretty big. There are almost 200 homes for sale in Montville, so it looks like “desperation” may be setting in.
I did some digging into, and in 2003 the owners of this home took out a $1.5 million construction loan to build a new home in another section of Montville…
The seller bought five years ago for 120k less than we’re offering now, so they should have equity. Our rea says that they can’t draw a HELOC because the house is on the market, but that they can escrow cash to pay for repairs after close. I am confident that our attorney will do her damndest to protect us, but even if we escrow 25k for an 8k repair, who knows what happens when they start digging? 15-20k is nothing for an EPA problem – as we’ve discovered.
Do you have an idea what the cost/procedure would be for an estimate of the type you’ve suggested?
Have the seller repair and get all necessary paperwork approving the repairs and clearning the property of any EPA issues before the closing.
Make sure the town approves of all work and inspects it. When it comes to any EPA issue, cost is one thing and TIME is another. It can take them MONTHS to approve/deny/inspect/pass/reject anything. Once you say “leak” I cringe because you don’t know the extent of how much/long, etc.
OIL TANKS ARE HUGE LIABILITIES!
Why do you think insurance companies ask you if you have an oil tank on (or under) your property? It it was leaking oil, then you already know there was a problem. Do not take on this headache until all inspections are passed and the EPA approves. Otherwise, you’ll be the one with the headache later.
-Richie
Richie,
The original asking price was higher.
MLS# 2257173
OLP: $889,900
DOM: 69
List Date: 03/14/06
Good point JB about not nixing the deal and applying leverage. However, it’s difficult to predict how ground water is affected by contaminated soil and hence the reason for water monitoring. These things are at times very dificult to correct, and contractors base things on man hours,volume of soil, etc. And there’s no clad gaurantee, rather more like that at “some point” it “should” be remediated. And once the cat is out of the bag don’t think anyone is going look away. You can can bet your bottom dollar that soil remediation industry isn’t about to reliquish the golden goose.
12K a month gross
2-3K taken out of the paycheck ( taxes ect )
9K left
More like:
10,000/mo gross
-3,500 taxes, HI, etc.
-4,500 mortgage
-900 RE taxes
-500 utilities/upkeep
That leaves $600/mo for food, gas, clothes, and the unexpected. Savings? What’s that?
Oops.
“Sorry, Hon, but we’re not retiring. Or having kids.”
What is soil remediation more than an inflated case of NIMBY, anyways? Don’t they just cart it away and hide it in one big toxic pile rather than in hundreds of thousands of small ones?
From what I understand, very little of the soil is actually incinerated – most of it just goes to that enigmatic place – “away”.
Richie: How did you find out that the sellers took out a construction loan?
[38]
Wow. 889k, now 699k? I guess my Chinese water tortue scenario has picked up velocity.
R Patrick, $120k a year will probably net you in the ballpark of $7k a month if you are contributing to your 401k.
tbw:
http://mcclerkweb.co.morris.nj.us/or_wb1/or_sch_1.asp
Enter in owners last name and document type “MTG”
How do I know if a house in my area is a good deal? how can I determine the right price of a house?
Jase Rion / JB
Buying and selling FICO scores is a scam. Actually its buying seasoned (open 12+ mts) tradelines (looks like a debt from a company on your FICO report) with no derogatory( i.e. late payments) issues to increase your own FICO score. Its been on our radar.
JB …. what you are talking about is common and legal. I personally wouldn’t recommend adding someone as a joint cardholder unless its for a new cc (for monitoring purposes) with a low limit that you can manage if the person cannot maintain the account. Also a good way to establish credit for your child (get a $200 limit cc).
Another legal why without doing that way is having the spouse with the good credit get the loan and use stated income (include both spouses income) on the application.
2008
R Patrick,
I’m with fanshawe on this one. We make approx 110k/year and only see about $6,500 take-home after 401k, pension contributions, taxes, unemployment, FICA, etc.
We’re looking at homes around 400k max. And don’t forget the dp and closing. It all pinches, but more and more is falling into our price range (though it is still severely limited).
allisonline, soil remediation is more than a NIMBY issue if the contamination has a pathway to contaminate nearby ground water, or has a pathway to the surface.
The “away” you’re talking about are hazardous waste landfills. Yes, they are taking small piles and consolidating them into a large one, but the idea behind this is that the large one would be properly contained and capped to prevent further environmental damage.
fanshawe –
Don’t get me wrong. I get it. Actually, I’m honestly appalled by the environmental impact involved. The few houses we’ve seen x the hundreds we haven’t = huge contamination.
I’m simply trying to question the remediation industry. The problem has to be fixed – no doubt – but I can’t help feeling like the ultimate result is removing contamination from expensive real estate and dumping it in undesirable locations. I’m sure that there are limits and restrictions on toxic landfills that minimize the damage, but honestly, how are they containing this oil long-term?
From MSN:
Baby boomers going bankrupt at faster rate
Americans over the age of 55 are filing for bankruptcy at a faster rate than the general population as growing mortgage debt and higher health care costs make them more vulnerable, a new study shows.
The trend of rising bankruptcies among older Americans is likely to continue for the foreseeable future, according to the study’s authors, John Golmant and Tom Ulrich, researchers at the Administrative Office of the U.S. Courts.
They found that the aging of the population alone does not account for the rise in older filers and that “bankruptcy courts can anticipate an influx of new bankruptcy petitions as the baby boom generation continues to age.”
Well Allison they say knowledge is power, but what you choose to do with it is your prerogative. Now that you’re armed with all the negative flack you’re in a better position to strong arm them, just keep in mind that 100% of zero is still zero.
This is odd… check out the dates on this Woodcliff Lake house.
ACT $580,000 9/20/2004
ACT* $580,000 10/1/2004
ARR $580,000 10/25/2004
ACT* $580,000 10/27/2004
U/C $580,000 10/28/2004
SLD $500,000 4/26/,b>2007
alisonline,
All landfills, including hazardous waste landfills, are specially engineered and constructed. They are not just big holes in the ground.
They have liners to prevent contaminant leaching, special covers to prevent volatilization, and monitoring systems for on-going oversight.
Also, if I recall correctly, even hazardous waste landfills also have acceptable limits for contamination, so if the soil is too contaminated, you’d have to remediate before dumping it if it is severely polluted.
Richie/JB [45],
Is there a similar public records search site for essex county?
any website that shows how much a seller is carining in mortgage.
Richie/JB [45], any website for Middlesex county?
Richie: How did you find out that the sellers took out a construction loan?
First, I grabbed the assessment price ($420,600) from MLS.
THen I goto http://www.taxrecords.com and search for all properties with an assessment of 420600 in Montville.
Now, I have the street address (1 Chapel Court).
I goto the Morris County Tax Board site and search tax records by property location (Morris County Tax Board) for the address I found. Hint: Don’t append the street suffix (ie: Street, Court, Boulevard, etc). Just put the name in.
Now I know the owners first and last name, what they pay on taxes, and the previous sales data (if available).
Click on the “County Clerk Records” link on the Morris county site and then search by the part name that you found. You’ll see all public records assigned to their name which include: deeds, mortgages, foreclosures, etc.
FYI: The morris county public records search only shows Morris County data. It won’t show data in Passaic, Bergen, etc counties. If anyone has links for those, please share them with everyone.
I looked at a house that was very interesting….had two tanks on the property so I had to have a tank inspector look at them. One which he said could be for the automobile, didn’t know back in the day (40’s???) people held gas for their cars on their own property. The garage also had a radiator for the car as well to keep it warm. Interesting right?
Anyway…the other tank had a hole in the line (some tool he had) somewhere. He then mentioned that I could have a $3k or $30k problem on my hand but the only way to find out was to have a company come out and dig around it to see where the problem was. I walked away from the house.
2008
Thanks for all the feedback. I have a pretty good idea of what the UST thing is all about, but some information seems to contradict other info. Our REA seems to think that it’s ok to close on a house with a leak as long as there is $ in escrow. She acknowledges the potential risks, but then minimizes them. I’m not so sure, and neither is my attorney.
I think maybe we need a new REA.
From MarketWatch:
U.S. 1Q rental vacancy rate rises to 10.1%
U.S. 1Q homeowner vacancy rate rises to record 2.8% vs. 2.7%
Vacancy data release can be found here:
http://www.census.gov/hhes/www/housing/hvs/qtr107/q107press.pdf
vicefund.com
discuss….
Interesting that the homeowner vacancy rate is the highest since 1995 (I don’t have prior data).
I thought we had a shortage of housing…
jb
R Patrick #6,
In that show the couple “bought” with an interest only loan
Also, if one income goes away (kids?), how does the plan look?
Homeownership rates took a dip in q1..
From MarketWatch:
U.S. vacancy rate rises to record 2.8% in first quarter
The vacancy rate for owner-occupied homes rose to a record 2.8% in the first quarter from 2.7% in the fourth quarter, the Commerce Department reported Friday. A year ago, the vacancy rate was 2.1%, a record at the time. The vacancy rate for rental homes rose to 10.1% from 9.8%, the highest in two years. Of 127.3 million housing units in the United States, 17.6 million were vacant at the end of the quarter, including 2.2 million vacant units that were for sale and 4 million for rent. Compared with a year ago, the housing stock increased by 1.9 million, with vacant units rising by 1.5 million and occupied units rising by 400,000.
A leaking oil tank could cost up to $100,000 to remediate.
In addition, you may have a 20 x 30 hole in your front yard for several months, and your timeline for resolution is on the NJDEP timeline (i.e., months and months and months).
This post has been deleted. Advertisements are strictly prohibited.
Maybe this explains why the cost of children’s education is so high…
http://www.app.com/apps/pbcs.dll/article?AID=/20070427/NEWS/70427016
we fixed an oil tank problem on the sale
of my mother in laws house. total cost
was about 25k.
its fixable , just got to get the right
contractors to do the job. go to the states
dep web site. they tell you how to do it.
and reduce it from the sellers asking .
#70 – wonder how much the investigation will cost to find out who spent $175? ;-)
Interesting that the homeowner vacancy rate is the highest since 1995 (I don’t have prior data).
I thought we had a shortage of housing…
JB,
I have homeowner data back to 1956 for the Northeast. The Northeast is currently at 1.9%. The only higher number recored since 1956 was 2.0% in the 4th qtr. 2006.
Does anyone have any advice or know any websites where real estate investors looking to form partnerships can be found or exchange ideas?
Vacancy Data:
http://www.census.gov/hhes/www/housing/hvs/historic/histtab2.html
Interesting that the homeowner vacancy rate is the highest since 1995 (I don’t have prior data).
From looking at the data above, its the highest since 1956
Contractor Bill,
http://www.creonline.com/real-estate-clubs/nj.html
jb
Thank you jb.
[67],
Vacancies, for owner occupied, up 30% yoy. Ouch.
I guess it’s not a great day in Mr.Roger’s neighborhood.
“Vacancies, for owner occupied, up 30% yoy.”
There’s something logically wrong with this statement. Can’t quite put my finger on it….
Much more likely that the peak numbers were overestimated due to mortgage fraud (listing the property as OO).
What? Fraud? No! I really did intend to occupy all 5 of those pre-construction condos I purchased.
jb
Thanks for all the feedback. I have a pretty good idea of what the UST thing is all about, but some information seems to contradict other info. Our REA seems to think that it’s ok to close on a house with a leak as long as there is $ in escrow. She acknowledges the potential risks, but then minimizes them. I’m not so sure, and neither is my attorney.
I think maybe we need a new REA.
Ofcourse the REA thinks it’s OK to close. They need the sale.
Worry about yourself. Is the $$ in escrow enough to cover the repair costs? Do you want this headache? What if there’s a cost overrun, who’s responsible?
You’re better off looking for a house with no issues, none that involve oil anyway.
Also, if you do remediate the problems, they may come back to haunt you in the future when you try to sell. Those tank(s) will need to be inspected again (even if they are filled with sand). If there’s something wrong, you’ll have to deal with the whole situation all over again.
Can somebody give some indication on lowballs and what is happening with properties in edgewater & Cliffside Park.I cannot seem to get too much info on price levels and how much they have gone down in the last one year. Pls assist with whatever info anybody can give.
tks
alison, i walked away from a property that had a 35 year old buried oil tank with known leaks that were ‘fixed’ by a reputable firm. we walked away knowing the potential expense such a problem can bring. we later found out the buyers had it checked and sure enough there were still leaks and they had to clean it up to the tune of $17k.
a leaking buried oil tank is a ticking time bomb. unless you can get assurances that they will pay any and all costs related to clean up even after sale then go for it else run away.
Some owners are more vacant than others.
Richard –
Thanks. I knew that by coming here, I could get uninterested feedback and maybe even find ppl with personal experience. We have to remain humble and objective, but that can be easier said than done when you’ve been trying to buy in for 3 years (first in Boston, then here) and finally see prices coming back down.
I think we are going to have to walk away, even though we’re not seeing anything else out there right now. Still waiting for sellers to get the message that the bidding war feeding frenzy is over. Price it right, and they will come.
Ugh. So frustrating. What really blows my mind is the houses that have come on in the last month that are priced less realistically than those listed earlier this year. Don’t people read the news?
#86 Allison; I am sure some do, but in their minds, it is not their town, and their house is “special”.
And of course offering less than their asking price would be insulting to them.
There’s something logically wrong with this statement. Can’t quite put my finger on it….
[80],
Just do the math.[no pun]
R Patrick #6,
You have to redo your numbers, 12K a month is 144K a year, you were working from 120K a year, which would be 10K a month.
Ray
Welcome to today’s episode of Amazing Realtor Stunts.
In today’s episode we learn that a flipper recently listed a POS Cape at $1.5M.
After the realization that no suckers were willing to pay $1.5M for a Cape, did the realtor:
A) Instruct the seller that the POS Cape was stratospherically overpriced.
B) Update the MLS photo so it no longer depicts the tiny Cape, and instead shows only the front door of the house.
You are correct, the answer is B. Thanks for playing.
UnRealtor #90,
LOL! You remind me of myself.
Headline on marketwatch.com –
Inflation rise is steepest in 16 years, but investors take heart from consumer resilience
resilience or stupidity?
wait, I guess they mean’t resilient stupidity
meant
Reech is always full of surprises. I guess every dog has his day.
anyone having leaking issues with the recent rain? the ground hasn’t given up all the rain from the last storm so i would imagine some are seeing similar problems.
Gary #91, here’s your prize:
http://www.dianenewmanrealtor.com/asp/homes/2731%5C516122_5841987.jpg
That’s the photo for the “front of the house” referenced in post #90.
:)
Updated photo link, in case the one in post #97 doesn’t work:
http://www.dianenewmanrealtor.com/asp/homes/2731/516122_5841987.jpg
Richie Says:
April 27th, 2007 at 9:02 am
MLS: 2372813
This home was listed for $850k not too long ago under a different realtor. It’s now listed at $699k. It’s been on the market for almost a year now (can’t remember for sure, but it’s been a loooong time).
I know that it’s been EMPTY for some time now. It’s on Jacksonville Road in the Towaco section of Montville. Needless to say, to see a $150k drop on this price is pretty big. There are almost 200 homes for sale in Montville, so it looks like “desperation” may be setting in.
I did some digging into, and in 2003 the owners of this home took out a $1.5 million construction loan to build a new home in another section of Montville…
Is that the white colonial on the corner? If so, that house has been empty for at least a year.
Saudis arrest more than 170 terror suspects: BBC
By Ciara Linnane
Last Update: 9:38 AM ET Apr 27, 2007
NEW YORK (MarketWatch) — The Saudi Arabian authorities have arrested more than 170 terror suspects who were allegedly planning attacks on oil installations and military bases, the BBC reported Friday, citing a spokesman for the Interior Ministry. The suspects are reported to be Saudi and foreign nationals, Gen Mansur al-Turki said. The authorities have also seized weapons and $5.33 million in cash. “Some have begun training on the use of weapons, and some were sent to other countries to study aviation in preparation to use them to carry out terrorist operations inside the kingdom,” a ministry statement read out on state TV channel al-Ekhbariya said.
http://www.sanfranciscosentinel.com/?p=1546
C-R-A-S-H……
hehehehehehehe
“‘We’re definitely looking for further price erosion,’ David Seiders, chief economist for the National Association of Home Builders, said at the trade group’s Spring Construction Forecast Conference.”
No kidding….
WELCOME TO MISERY 2008
hehehehhehe
BOOOOOOOOOOOOOOOYAAAAAAAAAAAA
Bob
Repeat after me
“the return on real estate will actually be “substantially negative” over the next 10 years.”
BOOOOOOOOOOOOYAAAAAAAA
Bob
CR has a great graph of the homeowner vacancy rate:
http://bp1.blogger.com/_pMscxxELHEg/RjIrc7peaJI/AAAAAAAAAdc/UxiT022ivrw/s1600-h/Vacancy+Rate+Q107.jpg
Misery 2008
http://movies.yahoo.com/movie/1800152650/photo/547337
Clot,
Given your comments about overbuilding in the mid-80’s, I’d love to get your take on this current number. To me it seems to be pointing to a similar situation taking place right now (albeit contained to residential, of course).
jb
Bob #106, funny stuff.
That scene was brutal, as is the negative equity dropping on the heads of Greater Fools.
I think it’s clear that we do not have a housing crisis – we have an AFFORDABLE housing crisis.
Million dollar homes for everybody!!!
Is that the white colonial on the corner? If so, that house has been empty for at least a year.
Yes, right across from Camp David or whatever that big field is called..
Interesting piece on Reuters.. Either housing is starting to spill over, or it’s just a very convenient scapegoat.
Ford says April auto industry sales weak
Ford Motor Co. said U.S. auto industry sales so far this month have been weaker than expected as consumer confidence has been hit by a slow housing market and rising gas prices.
…
“This month is terrible,” Ford chief sales analyst George Pipas said in an interview on Friday . “We are not even close to where we expected to be in April.”
…
Pipas said the spillover from weaker housing to other areas of the economy and rising gas prices appear to be affecting consumers but added that many of these same factors were also present in March.
“similar situation” this one dwarfs early 1990’s in my opinion. Experienced both.
This bubble has had numerous lives fueled by foolish / greedy behavior.
A bubble is forming in commercial.
BOOOOOOOOOOOOYAAAAAAAAAAAA
Bob
JB [105],
Amazing, looks like Shiller’s.
CASH IS NOT ALWAYS TRASH.
It’s quite evident that the housing market has taken a tumble and primarily this is reflected in home’s selling above 500k range. It seems to reason that, considering all the factors involved, i.e., subprime debacle, less eligable applicant pool, large inventory of homes, absurd appreciation over past 6 years, etc., that there will be, or already is, negative equity in many of these homes. However, homes continue to close in the 3-400k range. I wonder if these homes will see negative equity as well, since the majority of home purchaser’s fall into this range and seem to hastily settle for modest discounts instead of wating for he market to bottom?
Misery,
Tell us what you really think.
BC,
Are you referring to shilling-case index?
And if so, could you comment on it. Is it a accurate tool for analyzing trends?
The S&P Case Shiller Home Price Index is just about the best index we’ve got. While it is not free of problems, the other indexes have bigger issues.
New and Existing Home Sales report Median and Average based on the survey method. Changes in median and average might also be describing changes in “mix”, not necessarily changes in the price of similar homes. Not to mention that only a small portion of the market is surveyed.
OFHEO HPI is probably the next best figure, since it’s a repeat sales measure. Unfortunately, the OFHEO HPI numbers have two fatal flaws. They include mortgage refinancing activity as if they were sales and they are based on Freddie and Fannie conforming loans (only a subset of the total market).
S&P Case Shiller is also a repeat sales measure like OFHEO, but it doesn’t include refi activity. The issue with S&P C/S is that it includes only single family detached homes, no condos, townhomes, or coops are included.
The methodology documentation can be found here:
http://www2.standardandpoors.com/portal/site/sp/en/us/page.article/0,0,0,0,1145771394017.html
jb
The other “problem” with the S&P C/S Home Price Index is that it isn’t more ‘granular’. The only number we get for our area is the New York City Area which includes:
Fairfield CT, New Haven CT, Bergen NJ,
Essex NJ, Hudson NJ, Hunterdon NJ,
Mercer NJ, Middlesex NJ, Monmouth NJ,
Morris NJ, Ocean NJ, Passaic NJ, Somerset
NJ, Sussex NJ, Union NJ, Warren NJ,
Bronx NY, Dutchess NY, Kings NY,
Nassau NY, New York NY, Orange NY,
Putnam NY, Queens NY, Richmond NY,
Rockland NY, Suffolk NY, Westchester
NY, Pike PA
All the World’s a Bubble
http://www.thestreet.com/_tscana/funds/followmoney/10353243.html
Grantham says we are now seeing the first worldwide bubble in history covering all asset classes.
“Everyone, everywhere is reinforcing one another,” he wrote. “Wherever you travel you will hear it confirmed that ‘they don’t make any more land,’ and that ‘with these growth rates and low interest rates, equity markets must keep rising,’ and ‘private equity will continue to drive the markets.’ “
Bill [118],
My reference was regarding the 100 year chart.
Unrealtor?
Help Wanted–Off Topic
If a particular beach city, (i.e. Asbury Park), was severely depressed for 15-20 years (prior to 2007), how can I arrive at home evaluations?
Given that some houses are priced at 20% accrued appreciation for six years (120% above what seller paid), how does one arrive at fair market value?
It’s not going back to 2001 prices (some sold for 100K). So, where do you start from? This is a tough one for me to tackle. Any input would be much appreciated.
Should we be worried?
From Reuters:
Furniture Brands to close plants, cut jobs
Furniture Brands International Inc. said on Friday it would close three plants and cut about 5 percent of its non-manufacturing staff to bring costs in line with revenues amid softer industrywide sales.
The maker of Thomasville, Broyhill, Henredon and other furniture brands said the moves were expected to save about $13 million annually but would result in charges of about 5 cents a share, to be spread evenly over the second and third quarters.
…
Furniture makers have pared profit forecasts, cut jobs and announced plant closures as slowing home sales and higher year-over-year borrowing costs have led consumers to pull back from big-ticket purchases over the past year.
In March, Furniture Brands cut its outlook for its first quarter, saying sales could fall nearly 15 percent.
Orion [123],
How about 2001 prices with standard, annual inflation appreciation. That’s my guideline. I don’t know where you arrive at 100k in 2001. At the peak, prices are/were up approx 80-100% since
2001. Don’t know where that 180k-200k house was located in NNJ.
“Should we be worried?”
[124],
If you’re long lumber.
BC Bob #122:
Shiller Chart of Home Prices for Last 100 Years
http://graphics.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
:)
You can’t use Asbury for historical comps because of the gentrification that has been taking place there. It might as well be a completely different town.
A portion of the change in value seen in the past few years is due to the improvement of the neighborhood. There was real value added during the time period.
What I would do? Create an aggregate appreciation number similar shore towns in that area. Use this value to go backwards to determine your rough valuation.
Realize that this is an extremely crude method of valuation and would make a good appraiser cry.
jb
Gees Louise……sounds to me like we’re headed for a recession!!
Slower Than Expected Growth Leaves Americans Vulnerable To Inflation, Recession, Loss Of Savings
April 27, 2007 11:22 a.m. EST
Linda Young – AHN Staff Writer
New York, NY (AHN) – During the first quarter of this year the U.S. economy grew at a slower rate than expected, it turned out to be the slowest growth rate in four years. The Commerce Department blamed the slump in new house construction and the soaring trade deficit. But the slow growth in the U.S. gross domestic product gave a boost to the Euro, propelling it to a record high of $1.3682.
GDP is a measure of the total goods and services output within the United States. That growth only amounted to 1.3 percent in this year’s first three months, down from 2.5 percent in last year’s final three months. The 1.3 percent increase was also below the 1.8 percent growth that Wall Street expected.
The disappointing news also had an affect on stock futures, which fell.
That was to be expected, even if the growth had come in at 1.8 percent, John Silvia, chief economist for Wachovia, told CNN. He said that people become nervous and sell off stock any time growth comes in below 2 percent.
“People are going to be nervous anytime the first number there is a one,” Silvia said, according to CNN.
The stock sell off is bad news for anyone relying on income from stock shares in their investment portfolio or retirement account, which covers most Americans who have anything in savings.
Slower growth also signals a potential for inflation, which puts pressure on the Federal Reserve not to cut interest rates in an effort to keep the slowdown from continuing or to protect the country from slipping into a recession.
You tell us Bill, how has the construction business been lately?
jb
From Bloomberg:
Credit Suisse Sued Over Losses on Subprime-Loan Bonds
Credit Suisse Group was sued by a Florida insurer that says it lost money on investment-grade bonds backed by subprime mortgages sold by the bank.
…
Bankers Life, based in St. Petersburg, is seeking to recover about $1.3 million to make up for losses of principal, interest and market value on about $1.4 million of the 2001 bonds it bought in 2004, Ledbetter said. Other investors considering suits will probably seek between $500,000 and $3 million each, he said.
Credit Suisse units caused Bankers Life to lose money by overstating how much of losses after foreclosures on the loans insurance would cover; accepting “shoddy, inferior” loans; failing to buy back fraudulent ones; and covering up delinquencies, according to a complaint filed April 23 in Tampa. Payments were being advanced on borrowers’ behalf to “maintain the illusion” defaults weren’t occurring, Bankers Life claims.
Can someone with GSMLS access please give me the address for 2397671 in Chatham Boro? Trying to figure out what is wrong with it. thanks. I am a lurker who thinks this is a great site.
BTW, speaking of open discussion, a book recommendation:
_Boomsday_, by Christopher Buckley.
Basically, imagine if someone staring down the barrel at the Social Security/Medicare nightmare proposes tax benefits for baby boomers who kill themselves by age 70. Dark, funny stuff.
(Also, _Thank You For Smoking_, by the same author, though I’d say rent the DVD)
68 Kings
Just curious.
Many have been on this site for over a year. Back then, the argument pitted us [bears]against the bulls; RE never goes down, proximity to NY, there is no bubble, wannabes, immigration, etc.. Blah,Blah,Blah.
It has been a tumultuous past year. Personally, I did not anticipate such a swift unraveling of market data/fundamentals, not pricing. Presently, the discussion focuses on subprime, alt a, contagion, foreclosures, bailouts,credit restraints, Moody’s downgrades, etc… Has these rapid, at least to me, turn of events resulted in anybody fine tuning their original estimates?
From day one, I have been at 30-40% off the highs in a 5-7 year time frame. Currently, I feel that the duration may be somewhat hastened.
Well let’s just say I’ve never been one to live live beyond my means, and that my biggest assests have been my abiltiy to take calculated risks while not pidgeon holing myself into one particular area.
Can someone tell me why we haven’t had a recession in 15 yrs. is that normal?
Those of you who are historians how long is the average time between recessions.
Please advise. Thanks.
#138
Here is a list of US recessions
http://www.nber.org/cycles.html
We did have a recession in 2001, it hasn’t been 15 years, although the creation of the housing bubble “helped” bring that recession to an early close.
From the AP via MSNBC:
Freddie Mac boss: Housing worst isn’t here yet
The sharp decline of the subprime housing market offering high-cost mortgages hasn’t yet hit bottom, the head of home mortgage buyer Freddie Mac said Friday.
The number of home buyers starting such loans peaked last year, and interest rates for those buyers are due to rise in the next few years, which could cause foreclosures to spike further, Richard F. Syron said in an interview with The Associated Press.
“I don’t think it’s troughed yet, because of the class of 2006,” Syron, chairman and chief executive of Freddie Mac, said before speaking at a housing conference. “The mortgages written in 2006 in the subprime market are probably the most troublesome. They haven’t hit the reset point yet on interest rates.”
Make,
Where have you been? What about 2001?
http://www.ombwatch.org/article/articleview/1747/1/263?TopicID=1
#139 Rent: That was no recession, although called one, and once the Fed started with is dramatic easing, it ended quickly. That was just a small taste of what a rela recession is,a nd sooner it later we will have one again.
And it will be ugly, the longer it takes to come, the uglier it will be.
The owner of the house at 1393 vauxhall rd, 07083 is walking away…..Looking in zillow price is 412K http://www.zillow.com/HomeDetails.htm?zprop=40072209
Now they offer 340K to take over that owner. Please give me some advice. should I take it? 340K is a right price?
Thanks for your help
BC,
I agree with you that it will not take 5-7 years this time.
NJGator #133
JB gave u the street address. I know where the house is. It’s right next to some power towers. some apartments behind it too.
just an fyi.
BC Before I moved out of jersey I thought prices were too high… they were too high in 2000! 200,000 for a POS 1,200sf cape with 1 little bathroom is just too damn much. I saw Lucent shutting down and now Fort Monmouth…. and prices haven’t budged yet.
I think this is going to take a longer time than many think.
A large mature bull and his immature son see a heard of cows grazing in a pasture. The young bull says to his father, “come on dad let’s run down there and have are selves a few a them cows!” The mature bull looks at his son and says “no son let’s just take our time and walk down there and we’ll have them all.”
BC Bob Says:
April 27th, 2007 at 4:33 pm
Just curious. Many have been on this site for over a year. From day one, I have been at 30-40% off the highs in a 5-7 year time frame. Currently, I feel that the duration may be somewhat hastened.
Bost: I predict that sometime this weekend, Reech will post something offputting and obnoxious, but not specifically direct it at anyone. As a result, most posters will be left with a heightened sense of irritation, but he will act as if about pettiness. Our stealth troll will maintain his pattern of agita inducing polemics, while enjoying a perverse prurient gratification.
I predict……..
“above pettiness” not “about”
2001 recession was a joke. I made more money in 2001 then in 2006 and 2007 combined.
RE is in a recession today but someone forget to tell the media.
Thanks JB & Closer. I googled the address and it’s right on the train tracks too. Looks like the trifecta of bad location! Explains the low taxes too.
Orion–123:
Are you thinking of buying in Asbury? Cause from my perspective–long-time homeowner next-door in Ocean Grove–prices are way too high for the gentrification progress that’s been made. The only “buys” are bad houses in bad parts of town, and then you’re really gambling that all of Asbury’s going to be able to ride the gentrification wave. That will take many years to happen, imho, assuming that it can be made to happen at all.
So, in terms of evaluating prices, I can’t say that I totally agree with JB’s method. Asbury’s been in a state of flux for the past four or five years, and I think it’s got another four or five years to go. And it could still go either way, based on the economy. Comparing it to other shore towns isn’t going to work because the appreciation rate isn’t the same. Only place that might work with that kind of equation is Long Branch, but I’d deduct at least 20-30% off a LB comparison to Asbury.
But, if you really want to buy in Asbury–or any shore town–wait till the end of the summer. Prices usually dip then.
All you need is one more drive-by shooting in Asbury Park and all the gains made over the last few years will dissipate. That town is one headline away from a true housing collapse. Rainbow Row (you know where I mean) will bail out of there so fast they will leave vapor trails.
Peace
Have you forgotten what a hell-hole Ocean Grove looked like for a very very long time.
I hate people who forget where they came from.
BC, if I remember correctly (don’t bet the farm), I was one of the quicker and more negative prognosticators. Do it quick was my motto.
Got no respect, especially from schmuck balanced conservatives like CF ;P, but I’ve been sticking with them.
1999 start, no need to deal in percentages.
I don’t remember where I said we’d be in ’07. Maybe 25% off. I don’t remember where I thought we’d be in ’08.
Oh, yeah…and I’ll never forget CF’s response when I went with stagflation.
“Stagflation!” the man said.
…and Rainbow Row ain’t leaving till they own the place. Wake up.
Who do you think made South Beach Miami what it is today ???
And there are probably 2 or 3 towns in every state that have a Rainbow Row.
Fact is…It is always a blessing for that town.
Then…after a few years, they all sell their houses to the 2.2-child white nuclear family and move away millionaires.
It has happened over and over.
okay so someone please tell me that my recent decision to get into real estate wasn’t a bad one? and I’m not sure what it is, i’m going to do with a license yet..
If I can make money and a living, that’s great, but it’s not why I got into it.
Pat [155],
Hell yeah, I remember. A Nittany Lion with a trace of Cornhusker Red. It’s quick and vicious.
Anybody who drove to school listening to Darkness [or was it Badlands] has my utmost respect.
Make [150]
“I made more money in 2001 then in 2006 and 2007 combined.”
I get it, you must have been short the dot bomb. I like it, going against the herd. What made you join the herd this time?
okay so someone please tell me that my recent decision to get into real estate wasn’t a bad one? and I’m not sure what it is, i’m going to do with a license yet..
Don’t quit your day job until your sure that you can make a living in real estate.. Most make the jump first, and later realize that they can’t.
jb
Re: #123
I appreciate all your thoughts. Yes, I’m thinking of buying there, but the prices for a decent SFH east of the tracks, is waaay too high. Been doing tax data research, and I know I missed the boat during 2001-2003. Area was still too funky for me back then. But lots of people made lots of $$.
Yes, I’m aware of several 1,100 sq. ft. POS in the 400K range, which need additional 100K repairs. Can’t justify that.
Funny, doing tax research, I’ve noticed several “funky” transactions.
Asbury Park is sure in a world of it’s own.
Anyway, thanks for the formulas suggested.
BC Bob #125,
It’s not in NNJ. It’s in central NJ, near Belmar.
Zac #157,
I totally agree because I’ve seen it happen in Palm Springs, North Hollywood, and South Beach. These three areas went from anarchy, depressed real estate, boarded-up businesses and transformed into vital, thriving cities. Asbury Park is following the identical footsteps.
Only a recession can put a halt to it.
The only thing that did not happen it those three cities was the 2.2 nuclear family moving in. And, imo, it won’t happen in Asbury either.
Orion,
I’m glad to see that your eyes are wide open.
Asbury is still at a discount to any of its prudish neighbors.
Orion,
MLS#: 20700098 – on the lake, very cool.
MLS#: 20700098 – 2 family,great income.
MLS#: 20703267 – another groovy house.
MLS#: 20716054 – i like this one too.
all these are in good locations.
how much are you lookin to spend ?
20703267 is cute, but mid-$500K is a very heavy bet on the Asbury Park of the future. (That house, by the way, has a very interesting sales history. You could look it up, as they say.)
If I were looking to spend that kind of money, I could think of several other towns to do it in. And most of them are not in New Jersey.
#143,
340K in Union is way too much. 10 years ago it was a good town, but not anymore. You can’t even send your kids to school anymore.
#120,
JB, C/S Home Price Index comes on a zip level, it’s very accurate and very expensive to buy.
Pat Says:
April 27th, 2007 at 6:30 pm
Got no respect, especially from schmuck balanced conservatives like CF ;P, but I’ve been sticking with them.
http://www.youtube.com/watch?v=skSa0Cbp-mA
“It’s not in NNJ. It’s in central NJ, near Belmar.”
Orion [162],
I didn’t realize, in your original post, you were talking about Asbury. This, to me, is a conundrum. This is a whole different topic as compared to the great bust of 2007.
This is a scenario that I have struggled with for a # of years. To the north you have Allenhurst, south, Ocean Grove. I almost bought property there in 2001. When I read that someone got shot, 2 blocks from where I was looking, I began to look for a bailout.
I always thought that, “My City in Ruins”, had unbelievable potential. This has been a puzzle, to me, I can’t seem to put the pieces together. All I can say is; “Come on Rise Up”.
Lindsey??
by that logic,
should everyone move from Bricktown because of
Mcguire the Bricktown Butcher ?
according to the posters on this site no one should buy until historical fundamentals of income versus home prices are re-established. pretty useless advice when looking at individual circumstances.
okay so someone please tell me that my recent decision to get into real estate wasn’t a bad one? and I’m not sure what it is, i’m going to do with a license yet..
If I can make money and a living, that’s great, but it’s not why I got into it.
Why did you get “into it?” To pursue opportunities for your own benefit? Then great. Go for it.
But there are enough wishy washy part timers destroying the reputation of dedicated full time agents, who’re actively representing buyers and sellers who need a FULL TIME AGENT. This is ONE OF THE REASONS why the public image of REALTORS is down the tubes; LOW to NO educational requirements and no experience agents pawning themselves off as capable of dealing with the complexities of a real estate transaction while bringing it to a successful close. When the transaction is botched, all REALTORS suffer the consequences, as can be witnessed by the attitudes on this blog.
Can you help the homeowner realize the most money for him and his family and/or the best price for the buyer?
The other reason is clearly illustrated by the young lady who was considering a purchase of an oil tainted property. My neighbor down the block would have spent in excess of $100K in clean up costs if he didn’t have VERY long standing insurance that covered that issue (no longer available BTW). I’d never allow a client to entertain purchasing a tainted property. If she want’s to do it, find another agent. That’s not what I got into this business for…a quick sale. Quick sales are cool when all the circumstances are right. Also, I don’t promote properties in flood zones. If I wouldn’t have my kid buy it, my client won’t be advised to either. That’s how I run my business. BTW, I can sleep at night.
As a practicing real estate agent you’ll have to pay yearly E&O insurance (mine is $500), National, State and Local Realtor Membership fees (yes, you have to be a member of all), pay for your SupraKey. Just the basics will run into $3K. Those are all essentials to be in the business. Last year my combined necessary expenses were $13K. That’s low…I stayed away from newspaper advertising. They’ll double this year, I know.
So, why exactly did you get your license?
“by that logic,
should everyone move from Bricktown because of
Mcguire the Bricktown Butcher ?”
Zac [172],
Please, give me a glove if you want me to play shortshop. I have no idea what you are alluding to?
I have tried to balance the enormous potential of Asbury relative to its obvious albatross. I can not come to a conclusion. Is it akin to a high flying stock, priced for perfection? Risk/reward? You are much more cognizant of the potential/challenges than I am. Can you shed some light regarding the pitfalls versus aspirations? Is it gang central or a resurgent artsy town? Also, please leave the Butcher in the bullpen. Please educate me, I am totally baffled.
Asbury [Thank you, Bruce];
MY CITY OF RUINS
There’s a blood red circle
On the cold dark ground
And the rain is falling down
The church door’s thrown open
I can hear the organ’s song
But the congregation’s gone
My city of ruins
My city of ruins
Now the sweet bells of mercy
Drift through the evening trees
Young men on the corner
Like scattered leaves
The boarded up windows
The empty streets
While my brother’s down on his knees
My city of ruins
My city of ruins
Come on rise up! Come on rise up!
Come on rise up! Come on rise up!
Come on rise up! Come on rise up!
Come on rise up! Come on rise up!
Now there’s tears on the pillow
Darlin’ where we slept
And you took my heart when you left
Without your sweet kiss
My soul is lost, my friend
Tell me how do I begin again?
My city’s in ruins
My city’s in ruins
zac,
Your Bricktown Butcher?
KL?
http://www.stewartsofkearny.com/contact.html
Zac, #166
Thanks, but…
#1- purchased $75K, asking $545K
#2- this is a duplicate listing number
#3- purchased $265K, asking $549K (was $729K)
#4- purchased $70K, asking $549K
#1- Half a mil on the west side?!! Not for me.
#2- N/A
#3- Nicely updated inside, beautiful lake view, tiny rooms, small lot, access to garage difficult, at $366/sq.ft., I don’t think so.
#4- Half a mil on the west side?!! Not for me.
Wish I had had the conojes back in 2001/2002 but I had my head in the sand and body in the ocean.
BC Bob #171,
“My City in Ruins” HAS unbelievable potential. Saw Bruce do an impromptu concert at the Paramount last year, awesome.
grim will post if it makes the cut……..
WSJ
Homeowners Wage a Tax Rebellion
Rising Property-Value Assessments
Drive Up Appeals as House Prices Decline
By JEFF D. OPDYKE
April 28, 2007
Falling home prices and rising property-tax assessments are fueling a grass-roots tax rebellion.
From coastal Florida to the shores of Hawaii, homeowners are lodging record numbers of appeals, fighting against rising assessments that are, in many cases, pushing up annual tax payments significantly.
“My City in Ruins” HAS unbelievable potential. Saw Bruce do an impromptu concert at the Paramount last year, awesome.
Orion [176],
I can’t figure out if it’s a fastball, straight at my head, or a hanging curveball; Moonstruk versus the corner gangs. I’ve seen Bruce, many times, at Convention Hall and the Pony. After both, felt like I needed a bullet proof vest to get to my car. I’m looking for answers. I’ve gone to great lengths evaluating this. Is the potential priced in? After all, this town has seen more head fakes than a defensive lineman trying to tackle Barry Sanders. It seems as if the bribes, corruption and sleaze of Kevin Sanders and his cronies make Hudson Co appear to be childs play.
Who is Mcgiure, the butcher?? By the way, let me know when rumors surface regarding a Bruce appearance.
“From coastal Florida to the shores of Hawaii, homeowners are lodging record numbers of appeals,”
Chi [177],
The first stages of the upcoming revolution.
Washington Mutual tightens mortgage lending
Fri Apr 27, 2007 5:16 PM ET
http://yahoo.reuters.com/misc/PrinterFriendlyPopup.aspx?type=comktNews&storyID=urn:newsml:reuters.com:20070427:MTFH44053_2007-04-27_21-16-24_N27213259
By Jonathan Stempel
NEW YORK, April 27 (Reuters) – Washington Mutual Inc. said it is making fewer subprime mortgages and emphasizing higher-quality loans to boost earnings and cut risk after its home loans unit lost $113 million from January to March.
The largest U.S. savings and loan said on Friday it is also significantly reducing loans that require little documentation of borrowers’ income or assets and second mortgages that let borrowers buy homes with little or no money down.
Seattle-based WaMu, as the thrift calls itself, is making the changes amid an industrywide increase in defaults and foreclosures at a time that home prices are stalling and homeowners find it tougher to refinance as interest rates adjust higher.
“We’ve completely changed the culture from a volume-based culture to a quality-based culture,” said David Beck, an executive vice president in capital markets, in a presentation to fixed-income investors.
The home loan loss caused WaMu’s first-quarter profit to drop 20 percent to $784 million, despite higher earnings in its retail banking, credit card and commercial banking units. Overall home loan volume fell 34 percent to $29.6 billion.
Beck said WaMu has reduced “piggyback” second mortgages and “stated-income” loans, sometimes called “liar” loans, because they require little documentation and can lead to fraud.
He also said “we no longer do” combination loans, in which principal equals 100 percent of properties’ value.
WaMu expects to slash subprime loans 70 percent this year to $8 billion from last year’s $27 billion. On April 18, it pledged to refinance up to $2 billion of subprime loans at below-market rates to help borrowers who might otherwise miss payments. Subprime loans are to borrowers with poor credit histories.
The thrift also expects to boost “Alt-A,” or “Alternative-A,” lending, which falls between prime and subprime in quality. First-quarter Alt-A loans rose 49 percent to $7.6 billion from $5.1 billion, the thrift said.
Other lenders that tightened loan standards this year include Citigroup Inc. , Countrywide Financial Corp. , IndyMac Bancorp Inc. and Wells Fargo & Co.
WaMu shares closed Friday up 12 cents at $42.37 on the New York Stock Exchange. They are down 7 percent this year. The KBW Mortgage Finance Index and Philadelphia KBW Bank Index are down 6 percent and 1 percent, respectively.
Zac–#154
Yes, I do remember what Ocean Grove was like in the ’80s. I was here. But Ocean Grove then was never what Asbury Park is today. Mental patients living in hotels through the winter is not equivalent to school shootings and gang violence.
Will the recent influx of gays and lesbians be able to turn Asbury Park around? Maybe. I sure hope so. But it seems doubtful, imho. To turn around a whole town instead of just a neigborhood, like South Beach, you have to have voting power, and most of the gay men that I know who’ve bought in Asbury don’t live there year-round.
Orion–I know people made money in Asbury over the past five years or so. But I also know people who bought within the past two years (granted, on the wrong side of the tracks) and they want out.
If I was looking for a shore house in Monmouth County, I’d look in Bradley Beach. Just sayin’.
[90] omigod funny!
second only to watching clot dye his chesthair!!
sl
Now Playing: Homebuilder Blues (part 1)
WATCH: http://www.paperdinero.com/BNN.aspx?id=170
Chronicles some of the goings on during the National Association of Home Builders (NAHB) Construction Forecast Conference in Washington yesterday. Stresses the gloominess of the outlook forcing the conference to take a bit of a self-effacing comical tone. David Seiders states “Generally, the outlook for the housing industry has deteriorated since the beginning of the year.”
Originally aired on: 4/26/2007 on CNBC
PBS had this video on TV yesterday.
http://www.pbs.org/now/shows/317/video.html
Housing in the United States is taking a big hit as “too-good-to-be-true” home loans fail, refinancing dries up, and foreclosures surge. How did the market plummet so quickly — and are current homeowners paying the price? NOW revisits a California town whose real estate fortunes have taken a hard turn for the worse.
But there are enough wishy washy part timers destroying the reputation of dedicated full time agents, who’re actively representing buyers and sellers who need a FULL TIME AGENT. This is ONE OF THE REASONS why the public image of REALTORS is down the tubes; LOW to NO educational requirements and no experience agents pawning themselves off as capable of dealing with the complexities of a real estate transaction while bringing it to a successful close. When the transaction is botched, all REALTORS suffer the consequences, as can be witnessed by the attitudes on this blog.
The issues surrounding the almost nonexistant educational requirements impact both full and part time agents.
When was the last time you sat in on a salesperson licensure course? I did it a few months back, and in the name of politeness, I won’t say anything…
However, I’d caution you from making the assumption that every full-timer is just like yourself, or your colleagues. It ain’t so.
I’d rather see a part-timer flop, than a full timer push someone into a bad sale because they’ve got to pay their rent, their car payment, or put food on the table.
I believe that until an agent is established and has a regular income stream, it will be very challenging for them to act in the best interests of their clients.
How can an agent truely be a fiduciary if only one outcome in the transaction results in them being compensated?
Commission means the kids eat and we’ve got a roof over our heads, no sale means we starve on the street. I know it’s an exaggeration, but it hits the point I’m trying to make.
Don’t bother jumping head first into real estate in this market if you’ve got no experience or at least a spouse whose income can support you both.
jb
SG,
That is a great piece.
jb
http://www.indexuniverse.com/printer.php?id=1939
When you look at that nice man – Shiller – would you ever think he could dream up a nightmare like this? He like the Stephen King of economics.
BusinessWeek article,
By Christopher Palmeri and Dawn Kopecki
Why This Slump Is Different
Foreclosures are rising fast, investors are sweating, and lenders are now bending over backwards to keep bad loans alive
http://www.businessweek.com/magazine/content/07_19/b4033053.htm?chan=top+news_top+news+index_top+story
Grim (107)-
The ’80s boom/bust was a lot different. As the bust was developing, builders were throwing up units at a record pace…AND buyers kept paying ever-escalating prices, even in the face of tons of unsold inventory. It’s tough for all of us to remember, but the inflationary mindset (buy today, tomorrow it will be more expensive) was hardwired into everyone’s DNA.
Today, there’s a lot of unsold inventory, but builders are much more conservative in how they massage their cash flow…mainly by not beginning homes until they have binding contracts in hand. Back in the ’80s, builders commonly built too many homes too fast, burned all their cash and went belly-up.
And- no surprise- not too many buyers are going to pay up in today’s environment. Prices will continue to drop in the face of dwindling sales activity.
new (158)-
What??? What did you get in for, the fun of it?
This is a great environment…IF you have some prior sales/marketing experience and you’re ready to work hard.
If not, please get that license to a referral company…quick.
My business already has enough gapers. We don’t need any more.
Pat (189)-
Shiller is a bitter renter.
WSJ Editorial
REVIEW & OUTLOOK
Economic Ups and Downs
April 28, 2007; Page A8
Investors and the statisticians sent seemingly contradictory messages this week, with the Dow Jones Industrial Average hitting new highs and breaking past 13,000, while GDP growth for the first quarter came in at 1.3%, its lowest level since before the 2003 tax cuts. So whom do you believe?
The stock market is hardly a perfect predictor of the future, and the recent upward trend could reverse itself at any time. But the market is, as the old adage goes, a mechanism for discounting the future, while statistics like Friday’s GDP estimate are calculations about the past. So if we had to choose between the two conflicting signals, we’d put our money on the collective sense of the market, which these days is saying that the economy is stronger than the conventional wisdom would have you think.
The housing slump has undeniably taken its toll on overall growth for the past three quarters, and that continued in the first quarter of this year. For the quarter, the decline in residential investment shaved about one percentage point off GDP growth.
The good news is that the housing slump shows no signs of tanking the larger economy. Unemployment remains low, at 4.4%, and wages are rising amid an overall very tight labor market, especially for skilled workers. This wage growth in turn is helping consumer spending, which continues to increase despite rising gas prices. Hidden beneath Friday’s disappointing headline growth number of 1.3% was 3.8% growth in consumer spending on an annual basis. That’s none too shabby, given that home-equity extraction has dropped precipitously with rising interest rates and falling home prices.
Corporate profits, meanwhile, continue to come in ahead of expectations, even though profit growth will likely come out slower in the first quarter than the double-digit rates of recent years. Trade also knocked first-quarter GDP down by about 0.52%, as exports declined and imports rose. Rising imports are a sign of strong domestic growth, and we doubt exports will keep falling given buoyant growth overseas. Trade figures are a part of the GDP report often subject to revision, and that could make the quarter look better in future weeks.
If there’s a real red flag in yesterday’s economic data, it’s the inflation numbers. The personal-consumption expenditures deflator — the inflation measure used to derive real economic growth from the nominal figure — rose at a 3.4% rate in the first quarter. The “core” number, which excludes food and energy prices, rose by 2.2%, still above the Federal Reserve’s comfort range. The core number has now been above 2% for more than a year, and the inflation expectation for the coming year, as measured by the Bureau of Labor Statistics, is above 3%.
There’s still too much underlying strength in the economy to call this stagflation; it looks more like “growthflation,” to borrow a phrase from economist Michael Darda. The Fed has been betting that slower growth would bring inflation down, thus vindicating its decision to stop raising interest rates last year. But we all learned in the 1970s, or should have, that inflation can coexist with slower growth.
Inflation is a monetary phenomenon, and bringing it under control means creating fewer dollars. We doubt the Fed will find much inflation comfort in Friday’s data, and it shouldn’t. With gold near $700 an ounce and the dollar hitting record lows against the euro, the danger is too much dollar liquidity, not too little. The Fed has been hoping to see how bad the housing slump gets before it considers further tightening, but in the meantime price pressures have been building and dollars are sloshing around the world. As we said last year, we think the Fed would have done better had it not gone on “pause.”
The stock market closed basically flat on Friday, suggesting that the headline GDP weakness didn’t spook anyone much. The Dow’s march into record territory this week signals that investors believe that the economy will emerge from this inflationary period intact. But Wall Street’s professional economists have been underestimating the inflationary threat since this cycle began. There’s no sign that this has changed, which means that the further tightening that the Fed will likely have to come to grips with may come as a rude awakening to some Wall Street pros.
All of which is another reason that this is exactly the wrong moment for Congress to be toying with tax increases and protectionism. The 2010 expiration of the 2001 and 2003 tax cuts is looming ever-larger as an economic question mark. We can expect to feel the effects of that event long before New Year’s Day, 2011. Tax rates affect decisions throughout the economy, and unless those cuts are made permanent, or a pro-growth tax reform is put in place to replace them, their expiration will influence economic activity before that day arrives. Economic decision-makers, like the markets, try to look forward, rather than back.
The Bricktown butcher is the Mcguire woman who stuffed her dead husband inti suitcases and thrwe him in the Atlantic.
She was found guilty this week. All over the news.
The song My city in Ruins is about NYC after September 11. It is not about Asbury Park.
DUH!
Greenspan on 1927 recession.
“When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve’s attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain’s gold loss and avoid the political embarrassment of having to raise interest rates.
The “Fed” succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930’s.” (end)
http://www.prudentbear.com/articles/show/2001
And Peace (183)
They just swept the school board elections this week.
I can’t stand people like you who have made a hobby out of bashing Asbury Park. If you not part of the answer, then you’re part of the problem.
So shut up.
BCBob (180)
Correct me if I’m wrong but you seem a tad Afro-phobic.
Are there any Black people in your town?
SG (186)-
Thanks for the link!
CF..did you noticed that for some reason, that opinion misses the obvious connection between the current “collective sense of the market” and the “dollars are sloshing around” problem?
It’s another chicken and egg. Is the sloshing being mistaken for some insightful proper valuation of assets?
I’m watching the net movement in overall retirement assets from domestic to int’l.
That’s interesting. As is the persistent problem of private equity buyouts, and recent resurgence in buybacks.
These are deck reshuffles. Shuffling, shuffling, but not making more cards in the deck.
Zac[200],
You’re totally off base. Only a simpleton would come to that conclusion. My statement was based on a real life experience off of Cookman.
It had nothing to do with color. As a matter of fact, it was 3 white guys, yes white trash. It apppears that your phobias are clearly displayed. By the way, one of my best friends is African American.
[197]-“The song My city in Ruins is about NYC after September 11. It is not about Asbury Park.
DUH!”
DUH? And with an exclamation point? Sorry. Have some coffee and go to the Pony and ask anybody who knows anything about Bruce, about that song. Bruce schooled? That’s funny, the song was written in 2000, a benefit for AP. It is Asbury’s anthem. It seems odd that an Asbury expert would not know this. The song was then adopted as a 9/11 song, a single on the Rising. On the flip side, maybe Bruce spent too much time with Madame Marie and became supernatural.
Asbury’s anthem?
Says who?
I’ve lived here 15 years and thats a first for me.
If you’re afraid of Asbury than do everyone that lives here a favor and stay out. And keep your trap shut while you’re at it. You’re not welcome.
By th way; Most people who look for trouble…find it.
$1.2B Redevelopment Taking Shape along Jersey Shore
ASBURY PARK, N.J. – Somewhere, Bruce Springsteen is smiling . . . maybe.
Asbury Park, N.J.’s favorite son, rocker Springsteen has carved a large part of his legend out of hard-truth tales about his hard-luck hometown. (“My City in Ruins,” for example, while fittingly embraced as a post-9/11 anthem, wasn’t really a song about New York. Springsteen wrote it a year earlier, and he wrote it for a benefit concert in Asbury Park.)
I didn’t realize it either, when Bob mentioned it, it piqued my interest.
jb
That was a great piece by PBS, thanks for the link.
So, I’m reading and seeing all this foreclosure stuff, defaults, asking prices below the value of the mortgage, median prices lower on a YOY basis for the first time since the depression and then….. I do a search on a town like Wayne, for example and I see bi-levels last decorated when All In The Familywas the number one rated show with an asking price of $599,000.
So, some stupid, drunken b*stard thinks their palace is speecial (pronounced ‘spee shull’)and that that price is justified because of the walnut paneling, glued tile floor and dropped ceiling with flourescent lights in the musty smelling basement.
And, I guess the owner expects to land a bigger, stupid, drunken, b*stard who is going to get this house at a “bargain” of 10% off this speecial (pronounced ‘spee shull’) home because based on the standard lending practices of 2.5 to 3 times salary, this is what this person can afford.
So, because (insert Walter Kronkite voice here) lending practices have substantially tightened (Walter Kronkite voice off), a paltry salary of $200,000 per year is reasonable for the cabbage smelling, musty, 1970’s looking bi-level in the swanky town of Wayne. Do I have this correctly? Am I catching on?
“In Asbury Park” or for Asbury Park ?
THE GRANDE A T H A N O V E R
House of the week!!!!!!!
Homesite #1044
EMERSON $571,990 reduced –
SPECIAL VALUE – $450,000
$75,000 MAY INCENTIVES
Building 5 – FIELD MODELS – completion June/July
Fulton II #1049 – $618,555
Delancey #1045 – $586,635
Emerson #1047 – $603,950
Courtland #1048 – $525,205
Includes: Granite countertops in Kitchen, upgraded Maple cabinets through-out, Whirlpool appliances: stainless steel dishwasher, microwave, range and refrigerator,
Washer/dryer – white, master bath tile: level 2 – 12x 12 on floor, 9×12 on walls with Listello, Hardwood floors, upgraded carpet and padding. See manager for details.
Building 6 – FIELD MODELS – completion August
Emerson #1054 – $579,990
Fulton II #1059 – $594,990
Emerson #1057 – $579,990
Includes: Outstanding standard features.
“By th way; Most people who look for trouble…find it.”
Zac [204],
That’s your answer? A little edgy today? Issues?
I’ve been called many things throughout the years. Looking for trouble? Maybe an ignoramus would state that.
I can just imagine what your response would be if I was bashing Asbury. I was describing a real life situation. What can I say. It happened, it could happen anywhere. As a matter of fact, I was close to buying a property, the wife nixed it. Save your venom for her. That said, we have been to numerous benefits/functions for Asbury, for years; Sunset Park, the Pony, the Saint, etc.. If we went to the shore for the day we would go there, when everybody else said we were nuts. We wanted to spend $ there to help support the town. I’m glad your attitude is not ingrained throughout the many great people we have met there. Everyboby has expressed their sincere gratitude everytime we have supported a benefit there. Simply write you off, like a bad debt, as an exception.
re; City of Ruins, 9/11; Go to the Bruce library today.
JB [205],
I have seen him, in concert, 53 times. I have met him and talked to him about various songs. Anybody, with any connection, to Asbury knows what that song is all about. Written in 2000, pleading for the town to “rise up”.
I’ve been known to be an Asbury supporter as well. In 2004 and 2005 we worked with the town to put on the Asbury Park Criterium. We met on a number of occasions and thought it would be positive for the town. We had hopes of turning it into a “Tour de Somerville” at the shore.
Anyway, the town screwed us over by changing our routes the night before. They had originally promised us that we could close off a section of town for a true criterium course. They relegated us a couple of desolate side streets and provided no support. Promised advertising never came through. Promised sponsors never came through.
Oh well, we tried. We lost a considerable amount of money on both occasions.
jb
The problem is:
That you all want to help from the outside.
The way to help is to move here and make it a better place.
One house at a time.
sg (186)
good find!
Re: Asbury Park
BC Bob #180: Hoboken, in the 70’s, was gang-filled, drug-infested, welfare-burdened, crime-laden and, wholly corrupt. Used to work there. Today, one square mile totally cleaned-up. Asbury can do the same and, it’s a beach town.
I’m tellin’ ya’, it’s happening already. Also, noticed that people who bought there in late 2004 and 2005 are today asking somewhat near their purchase price. In trouble? My guess is yes.
Where I live, which is the epitome of tranquility, a human body was found stuffed in a suitcase. My point: crime is everywhere. Asbury Park though, does have more crime.
My issue with asking prices there is that many sellers have a significant amount of built-in “future appreciation”. Since I believe prices will drop, I’ll just wait.
Great day for gardening, see ya’.
Interesting, in Nevada
Thug & Thug tactics: RSA HOMES – RAFFI ARSLANIAN
SAS
housing has hit bottom. If you don’t buy now, you are missing it. Guys, don’t get confused by all the sky falling media stories!!!!
RE: 194
There’s no sign that this has changed, which means that the further tightening that the Fed will likely have to come to grips with may come as a rude awakening to some Wall Street pros.
Anyone want to hazard a guess if/when we will see a .25 bump?
“housing has hit bottom. If you don’t buy now, you are missing it. Guys, don’t get confused by all the sky falling media stories”
You gotta be kidding. Beat it kid.
SAS
Zac (#213)-
As a PA resident with a shore property, I find some of your comments disturbing.
If you live in a seaside community, visitors come with the territory. My shore neighbors can’t wait for summer to end. The entire community seems to treat visitors with contempt.
‘Your not Welcome’?? The message has been heard loud and clear. People don’t flock to the Jersey Shore like they did 20 years ago. If you are an indication of an AP local, I can assure you that folks like BC Bob are not the problem.
Jim & Friends,
I’ve been waiting in the dogout for the past two years. I could see it, there are some desperate sellers out there. For a first time future home owner like me.you should teach some of us. how to make a good offer? or find out the correct value of a house. maybe we could get some good deals in between this trouble times? what do you think?
Gee sounds like SAS must be one of those who bought high and is now trying to unload. Sorry SAS, the best has yet to come. Time for a little dose of reality
Sorry SAS my bad! I should have scrolled a little further.
What I meant to say was that dishonest realtor has a hell-of-a-sense of humor!!
Bill: SAS is the man. He has just been laying low. He has the best stories.
To Orion re 215:
Difference is Hoboken was a mob town. In Hoboken many, many people died in fires in those tenements. In one of them at 1st & Washington across from the old Shop Rite over 25 people died, many of them kids.
Hoboken is a town full with ghost of the poor minorities who got cremated by the mob real estate developers.
You must understand the level of corruption is such that next time you leave the Lincoln Tunnel take a look on top of the hill and you will see a house, that property was a Weehawken town park.
You tell me how a town park can become a private house with the NJ State green laws. But this is Hudson County.
“The writing was on the wall once first-time buyers, ultimately the lifeblood of the market, could no longer afford to buy using traditional financing options. Instead, they were forced to take out interest-only mortgages and expensive loans that did not require a deposit”
Noone was Forced to take out any loan…A bunch of dolts decided to be gamblers.
d2b (221)
That rhetoric was not meant for all visitors, Please re-read the dialogue.
The Annual Grand House Tour of Asbury Park is tomorrow.
Please do come.
The last time I took the salesperson licensure course is the last time I’ll suffer through it, not that long ago…in 2003.
My wish is that the REC should incorporate more practical elements from the GRI course into the licensing course; pricing a property, constructing an offer, negotiating techniques, guideline on purchasing an investment property, etc., etc. A primer on real estate etiquette and showing customs would be helpful as well. All I remember is a lot of boring yammer about deeds and different forms of holding property. Oh, yeah, and an acre is 43560 sq. ft.
I don’t assume every full timer is like myself. Far from it. I’ve been in contact with all kinds…but mostly clients who have been through the ringer and back. One of my recent clients was a really sweet guy who was pushed into a sale he wanted to flip to make money for his divorced son to start a new life. He bought WAY too high which set the stage for failure. By the time we finally sold the house he had total assets of $83.
Jim you ask, “How can an agent truly be a fiduciary if only one outcome in the transaction results in them being compensated?” My response is that this business is about PEOPLE not about PROPERTY. After a bit, one can depend on referral business from past clients. But don’t people realize when they’re being pushed into something? Does no one consult instinct? When I feel I’m being intimidated into a decision, my first instinct is to get pissed and walk. Does no one else react that way?
Clot’s advise was the best. Become a referral agent. Typical referral fee is 25% of the agent’s commission, not a bad paycheck for making a phone call.
Oh, and I forgot MLS fees in my last post…and don’t forget the rising cost of gas…$2.87/gallon at the cheapest Gulf in my area. Yep, do referrals.
222 Carlitos,
If you want to put together a good offer you need to look at recent sales in the town in question for comparable properties. Then if possible determine how much the owner paid. Look at improvements in the home, if any. If you want to have some real fun, look at the county clerk’s website for the county in question and bring up the homeowners current mortgages on the home. That doesn’t determine property value but it could give you some insight into level of motivation. Ask family, friend, co-workers if they know of any REALTORS they can recommend. Don’t just call off an ad or a sign. DON’T CALL THE LISTING AGENT AS DUAL DISCLOSED AGENCY IS EXCEPTIONALLY DIFFICULT TO PULL OFF AND YOU WON’T BE FULLY PROTECTED. Hire your own realtor.
Between you and the REALTOR you hire, you should do ok. If you feel the REALTOR is a POS or a bad fit, walk. Just walk quick and dont’ invest a lot of your time, and their time. Make an honest decsion ASAP.
Real Estate TV Alert
Bought & Sold – Sunday HGTV @ 10:00PM
They are 12 tough realtors in one of the toughest markets in the country, northern New Jersey.
http://www.hgtv.com/hgtv/shows_hbas
http://money.cnn.com/2007/04/28/news/economy/yellen_downturn.reut/index.htm?postversion=2007042818
she[Fed’s Yellen] said that in the U.S. economy “there is potential for a downturn that could have major spillover effects around the globe.” The United States contributes roughly 25 percent to world economic output, she noted.
…the U.S. central bank does not use inflation targets but is discussing whether to adopt them
>>
So much for other economies supporting US downturn.
“Sorry SAS my bad! I should have scrolled a little further”
Accepted.
“Time for a little dose of reality”
I got my dose of reality along time ago on a summer night in the Quang Tri Province.
;)
SAS
AMS (231)-
Good stuff. Also, there’s one thing that will cure a lot of ills with agents in NJ: single licensing.
In a nutshell, single licensing eliminates the “salesperson” class of license and forces all licensees- both new and current- to earn a “broker” license. The broker license requires more classroom time, is more comprehensive in scope and harder to earn. Single licensing is currently the law in Oregon, South Dakota and Colorado…and has been very successful in raising the performance bar for agents.
Buyers and sellers in NJ do not realize that there are two different levels of licensee. The client simply wants someone to be “my agent”. By employing single licensing, the public would be assured of the ability to receive a dependable- and uniform- level of skill from any licensee. Single licensing also offers owners of RE offices the security of knowing that uniformly better-trained licensees- many of whom work from home and do not come into the office very often- do not have to be hectored and supervised, like in the “old days”.
Wow! you’re right Quang Tri huh? I read the province received the heaviest carpet bombing campaign in the history of the WORLD!
Hi all
I’ve glanced only briefly since wednesday, feel like I missed so much, but I can’t go back and read it now, its too much. This was the last few days before a huge school fundraiser. So I was really busy. It’s over now, however I noticed just how much work I can get done when I don’t check this blog so often (obsessivly) and I hope I don’t have to change my ways – like I did when I gave up soap operas.
):
143)
I would not pay 340k for that house. Vauxhall is surrounded by gang bangers, check out the statistics and by the way Irvington is not far from there.
SG (186)
Excellent link to that PBS piece, thanks! The RE bust really hits home (if you’ll pardon the pun) when you see how real people are affected, rather than cold statistics or anecdotes about nameless, faceless people.
“Wow! you’re right Quang Tri huh? I read the province received the heaviest carpet bombing campaign in the history of the WORLD”
you got that right. and we were in the carpet and I don’t see Hollywood knocking on my door.
;)
SAS
#235
There is more wrong than the type of license with the US/NJ real estate sale and purchase system. It is absolutely obscure that it can cost between 6 to 10% of the property value to change ownership. Looking at other western countries the cost is typically under 3%. Some even around 1%, and that includes the cost of the listing agent.
In many countries being a Realtor is not even a profession and the system works great, people buying and selling properties just as frequently as her in the US…………
Contractor Bill (116),
Can you share how you developped these opinions? Specifically that “the majority of home purchaser’s fall into this range ” and “seem to hastily settle for modest discounts.” I’m trying to predict the bottom and statements like yours are very interesting to me!
Thanks,
Par.
“However, homes continue to close in the 3-400k range. I wonder if these homes will see negative equity as well, since the majority of home purchaser’s fall into this range and seem to hastily settle for modest discounts instead of waiting for the market to bottom?”
vinland (241)-
What brand of crack are you smoking? Many foreign countries do not feature an organized RE marketplace or mature RE industry…and they are characterized by byzantine and conflicting RE statutes, illiquid mortgage markets, rampant title problems (heck, in places like France, quiet title is an abstract concept!) and other threats to the ownership and enjoyment of private property.
Indeed, agency and fiduciary responsibility to clients are a joke in many countries; that’s why there’s no money in the RE game and private citizens are often forced to fend for themselves. There’s nothing good about any of this, and there’s nothing in the foregn RE business model worthy of emulation.
As I’ve said here before, ANYONE can sell a house. However, when that’s the ONLY way to get things done, the selling environment becomes pretty dicey. The US real estate profession- at its core- provides an organized marketplace for buyers and sellers. As in stocks or bonds, it’s generally acknowledged that organized marketplaces are a good thing and offer ease of transaction and transparency for all players. In the absence of organization, there is chaos. Unless you are an anarchist, it’s specious to claim that this state of affairs is to the clear benefit of anyone.
I should also note that Foxtons is a UK-based company that entered the US market in order to buzzard the carcass of the failed YHD.com. In the UK, they are somewhat of a market force and seen as a legitimate player in RE. Though they have not been in business long here, they’ve changed business models like you and I change clothes; the only constant in this “evolution” is that everything they try fails. Their constant public bleat that RE is a “service” industry (and not a skill-based profession) is laid to rest by their utter inability to do anything right. Their upstate NY operation is now shuttered, and I wouldn’t be surprised to see the whole outfit go belly-up any day now. Their flea-like life cycle here is prima facie evidence of what a rug bazaar RE is once you leave the US.
Clotpoll,
Am I missing something, but shouldn’t transaction fees generally be lower in a mature market as opposed to an undeveloped market? That’s the reason why it’s almost always cheaper to hedge a position over the exchange rather than an OTC market. This seems to contradict your reasoning that overseas real estate markets which are less liquid and developed have lower commissions as a result. Given the byzantine and complicated markets overseas according to you, isn’t there a greater need for and as a result demand for full service brokerages?
ac
Clotpol (243), I wouldn’t be so cocky if I were you. Perhaps you are the one that should lay off the crack pipe. Which overseas countries have you visited, not counting the Italian pavillion in the EPCOT center…??? your ignorance regarding overseas realestate regulations is blatantly obvious. France actually has some of the most buyer protective/friendly legislation in the world.
In the US we are forced to use a lawyer in order to protect our interests and avoid get f….. over by some sleazy RE agent.
[quote:provides an organized marketplace for buyers and sellers. end quote] The US realestate market is only organized for the RE agent and only functions as an increased cost element in the process. Heck, a RE agent doesn’t even have to tell the truth as he/she is free of all liabilities concerning the property their representing.
Clotpoll! Do your homework next time.
edjs
China raises it’s reserve ratio once again..
No. Hudson Boy, #227,
I’m well aware of the house above the Lincoln Tunnel. Back in the days when it was a park, friends and I used to hang out after high school and do homework.
My parents witnessed the Hoboken fires. It was horrific. Criminal way to clean up a bldg.
On the other hand, Asbury Park has cleaned up two major buildings (90+ units) without casualties. They’re now condos.
Re: RE transactions
I’ve friends who purchased residential RE in Mexico. Seller shakes buyer’s hand, takes the money and says “It’s yours”. Buyer says “Thank you” and proceeds to document the purchase with the local clerk at the hardware store (no joke).
No title search, no lawyers, no agent, no contract, no commission. Also, no protection. I prefer our system, even with its imperfections.
Can you share how you developped these opinions? Specifically that “the majority of home purchaser’s fall into this range ” and “seem to hastily settle for modest discounts.” I’m trying to predict the bottom and statements like yours are very interesting to me!
Thanks,
Par
Well for starters, if we consider the market and look at it in terms of a bell curve then we know that the vast majority of home buyers fall into this range, 300-400k. I’m sure most will agree thas this is, by-and-large, the entry level of the market in northern nj. However, we’ve seen absurd and unrealistic appreciation (10-20%) for quite a few years now, yes? We see lot’s of low ball offers being accepted for homes that are much more expensive,yes? So I’m of the opinion that since the “perfect storm” is just now starting to gain momentum due to factors such as subprime, less eligible applicants, increasing foreclosures, absurd appreciation, etc., it’s foolish to buy into current market level prices. We need to see home prices corrected to the point where appreciation was 3-5% yearly and start with those numbers. And since more homes continue to close in the 300-400 range, I’m a believer that these are just mere modest discounts and people are foolish to purchase.
Just because everyone else paid too much, doesn’t mean you need to as well.
Inventory in NJ has hit last year high of 91,350, up 2% since last week and prices are dropping drastically. Perfect storm has arrived.
Can you share how you developped these opinions? Specifically that “the majority of home purchaser’s fall into this range ” and “seem to hastily settle for modest discounts.” I’m trying to predict the bottom and statements like yours are very interesting to me!
Thanks,
Par
Well for starters, if we consider the market and look at it in terms of a bell curve then the vast majority of home buyers fall into this range(300-400k), which constitutes the entry level of the market in northern nj. However, we’ve seen absurd and unrealistic appreciation for quite a few years now, yes? We see lot’s of low ball offers being accepted for homes that are much more expensive,yes? So I’m of the opinion that since the “perfect storm” is just now starting to gain momentum due to factors such as subprime, less eligible applicants, increasing foreclosures, absurd appreciation, etc., it’s foolish to buy into current market level prices. We need to see home prices corrected to the point where appreciation was 3-5% yearly and start with those numbers. And since more homes continue to close in the 300-400 range, I’m a believer that these are just mere modest discounts and people are foolish to purchase.
Just because everyone else paid too much, doesn’t mean you need to as well.
Did you guys see this? No wonder our state is a mess, our governor is in NYC, dating.
http://www.nytimes.com/2007/04/29/nyregion/29acting.html?_r=1&hp&oref=slogin
SG[186],
Great find. Thanks.
KL,
Thought you were stranded on a boat in the east part of the town.
“Vegas house-flippers crushed as market crashes”
http://www.denverpost.com/popular/ci_5770959
SAS
I am kind of surprized to see the words “market crash” in the title.
Wasn’t Vegas the cats meow just a few years ago?
SAS
#234
Well I was specifically talking about western countries and most of them have a more organized marketplace than the US. The high transaction costs in the US are actually very much a reflection on a lack of organization.
Take this scenario. Buyer should be prequalified to be able to make an offer on a house, not just preapproved, but actually backed by guarantee for financing for a house of a certain value. Second, the house should be prequalified as well with a house inspection from an independent inspector and appraiser. The seller brings the house to the market and announces an open house in a few weeks. There is no need for realtors to be running around with people showing houses etc. After the open house the then agent accepts offers and presents it to the seller, some negotiation etc and the house is sold.
The key is that everyone involved is qualified to take part in the game and there is a set timetable, listing period, showing, and offer period. If no acceptable offers are present the round is repeated. Using this method we can expect a agent to sell at lest a couple of houses per month as the workload can easily be adjusted……..
http://www.informationweek.com/galleries/showGallery.jhtml?galleryID=21&articleID=199202140
IT salaries.
NJ OIL TANK (UST) Problems 1st hand knowledge
For all who are interested in oil tank issues I having been dealing with a closing for almost 1 year now. We are buying out 1st home and we love the home. We didn’t need to be into the home until June 07, yet we placed a bid June 06. The sellers never tested the 295 gal tank before they put it on the market. I had the tank tested with the stipulation that prior to closing they remediate the tank if it was found to fail the “ait test”.
Well it was a small leaker and now I have been waiting since JUNE 2006 for the No Further Action letter from the NJDEP and Homeowners. We have a copy of a Remedial Action Report that will be sent to the DEP by the sellers, but it will now take an additional 3 to 6 months for the DEP to get a NFA (No Further Action Letter) to the sellers to give to us. So a word to all of you who love a home and can afford to wait. It will not happen overnight for the NFA. I have researched and called the DEP directly and they say the same thing. 3 to 6 months for. So basically it will be at least a 1 yr process to get the NFA once you find out the tank is leaking, perform the clean up and get the NFA letter.
Has anyone ever closed on a home before with money in escrow waiting for the NFA letter from the state? If so how much $$$$ did you request be left in escrow until the letter arrives.? Could you respond? I would love to know.
PS…..if the tank is tested and it isnt a leaker than its a 1-2-3 easy cleanup and paperwork is a breeze. If its a leaker or fails the “volumetric” EZY air test then you will be waiting at least a year before the property will have a clean bill of health…
The air test costs about 350$ to 400$ and takes about 1 hour time to let you know if the tank is a leaker or might have a problem. At this point if you love the house you can either tell the sellers clean it up, you can move on.
Also if you want to see oil tanks in your area or street that your house is on in NJ goto GOOGLE.com and search NJDEP DATAMINER
Click on the open puplic records act and search the Dataminer website, which is a link on the NJDEP webiste. You can sort by home address or site specific # if you have the cleanup number. Once you find the address location you are looking for, click on PENDING PERMITS. This will tell you what the status of the cleanup is for the property that you are researching. This website will also tell you if your neighbors property or nearby homes had an oil tank that leaked and what the cleanup was or is.
I have researched and called the DEP directly and they say the same thing. 3 to 6 months for. So basically it will be at least a 1 yr process to get the NFA once you find out the tank is leaking, perform the clean up and get the NFA letter.
Anytime you need a response from the DEP, 9 months is minimum. I had to get DEP approval to build my house, I waited 9 months for them to respond saying I didn’t need any further approval from the DEP.
Environmental issues (wetlands, water, oil, hazardous materials) are VERY costly and huge liabilities and you have to wait for the slow DEP to respond on all those matters.
-R
#245 Vinlad,
The key is that everyone involved is qualified to take part in the game
===================================
You’re damn’ right!
all the byzantines I knew, were 100% qualified (not pre-qualified) to take part in the game – RE transactions were ‘cash only!!!
Been there done that, up ’til 9/11/’01 – no realtwhores, no subprime, no ‘mature’ western “debt peonage”.
Prices were down to earth, many a weddings paid off a new flat/house for the newlyweds the very next day.
… then the western stench came in the form of a rotten-cartel-organized RE marketplace …
Speaking of real estate in other countries, here is a story from India (a country not exactly known for protecting consumers):
Real estate fraud: 11 houses demolished
Kolkata, April 28: Asit Halder, Gopal Karmakar, Maya Roy and several others have now no place to stay. On March 8, they were removed from their houses, which they had built on the land they had purchased from one Gopal Mandal, after making full payments some 15-years ago. They have also got documents which apparently establish transfer of ownerships.
Eleven such families at Bara Battala of East Balia in the southern fringe of Kolkata, are now the victims of a major real estate fraud.
Santanu Nag, one of the victims, told Newsline, “I had been staying at my house built on that plot for the last 13 years and recently planned to construct a flat on the first floor. The plan also got sanctioned. But before I could start construction work, everything was over. On March 8, Biman Bhattacharjee, a real estate promoter came with the police and court order and demolished our homes.” Another victim, Kalpana Pradhan, whose land has been mutated on March 15 (Mutation No. 1442/07), said that Gopal and his cousin Bechulal Mandal have been fighting over the issue of ownership of land in the court for years. An injunction order had also been issued on the land, he said.
“Keeping us in dark, Gopal sold us the land after forging documents. Recently, the court has given a verdict against Gopal and declared Bechulal as the owner of the plot, who later had sold the land to real estate promoter Biman Bhattacharjee,” he added. Minati Paul, Montu Ghoroi, Sandha Bera, Madan Naiya and other victims also echoed similar sentiments.
The victims had lodged a joint complaint at the Sonarpur Police Station on March 9. Basudeb Das, the inspector in-charge said, “We received complaints that Gopal had duped 11 families for a huge amount of money. Immediately, we visited his place and found all family members absconding.”
However, this correspondent met Gopal’s wife Jyotsna. Accepting that despite injunction order they had sold the land to these 11 families, she said, “I do not know where my husband has gone and when he would come back. He fled as police were looking for him. My husband only knows why he has done so.” At least 20 complaints of real estate frauds have been reported to various police stations in and around Kolkata. The frauds, according to police, are active in Garia, Sonarpur, East Jadavpur, Rajarhat, Lake Town, Bantala, Regent Park and few other places near Kolkata.
In a separate incident on Tuesday, based on the complaint of house owner Arwind Jaiswal, Shakespeare Sarani Police had arrested a Howrah Court lawyer and clerk Nabakumar Manna and Debaranjan Khan respectively, for their attempt to sell a 14.5 cottah vacant land at Camac Street, valued at Rs 10 crore. DC (South) Ajay Kumar said that the duo had tried to sell the property on the basis of fake deeds obtained from Alipore sub-registry office.
“If you want to buy a plot at any of the fringe areas of Kolkata, be alert and thoroughly get the documents checked before buying. Some real estate fraud gangs are active in the city which are involved in selling plots by forging actual property ownership documents,” warned the police.
DIG CID Niraj Nayan Pandey said, “We have received petitions about a number of such real estate fraud cases in different districts around Kolkata, but did not take up any case for investigation. All these cases are registered with the local police stations and they are looking into these cases.”
police sensed that a section of employees of various land registry offices were hand in glove with the real estate agents.
“The frauds gather basic information about owners of the lands and status of the property from corrupt government employees and then they prepare forge property ownership document,” an officer said.
JB, my comment with date/time April 29th, 2007 at 11:29 am is awaiting moderation.
James Bednar Says:
April 29th, 2007 at 6:53 am
China raises it’s reserve ratio once again..
You get up before 7AM to tell us this crap?
Contractor Bill Says:
April 29th, 2007 at 7:58 am
We need to see home prices corrected to the point where appreciation was 3-5% yearly and start with those numbers.
Bill: Just remember that if we see a flat market until 2011, even if the prices you see are the same, they have dropped roughly 12-13% on a REAL basis. Additionally, you have avoided all the additional cost of carry as well [e.g., prop tax, maint etc.].
I knew it was only a matter of time before they removed the term “crash” and replaced it with “cools”
“Vegas house-flippers crushed as market crashes”
By Ryan Nakashima
The Associated Press
Article Last Updated: 04/28/2007 02:15:10 PM MDT
http://www.denverpost.com/popular/ci_5770959
Now, after some complaints about the term “crash” we have a new update.
“Flippers flop as housing market cools By RYAN NAKASHIMA, AP Business Writer
Article Last Updated: Sun Apr 29, 9:09 AM ET
http://news.yahoo.com/s/ap/20070429/ap_on_bi_ge/flippers_flip_out
SAS
edjs Says:
April 29th, 2007 at 3:05 am
Clotpol (243), I wouldn’t be so cocky if I were you. Perhaps you are the one that should lay off the crack pipe.
edjs: FYI – You picked on the wrong dumbass realtor. You don’t have to take my word for it. You’ll see.
another post is awaiting moderation.
come on big brother… cut me some slack.
just kidding JB!!
;)
SAS
Back to an old topic; cell plans & phones.
Looking for family plan; best plan/service in NNJ?
Which phone?
Rich,
Motorola Razr? Which model?
Thanks.
Bob, in this area Verizon generally has the best call reliability and clarity.
The best phone, is the one that’s free with the plan. :)
For me, if a phone doesn’t clip securely into a belt holster, it’s useless. The RAZR was a disaster in this regard, always falling onto the floor (fun on concrete).
ac (244)-
RE fees in the US are low…and they have been dropping over the past ten years as a function of selling price.
I’m gonna go out on a limb and guess that you are one of the many here who think that agents pocket the entire commission on any given transaction as pure profit…and that we have no cost of sales, taxes to pay or insurance obligations.
If you saw what the average agent’s cost structure entails, you’d quickly realize there’s not some extraoridnary windfall we’re reaping here. It’s a good living, but not an easy- or cushy- one.
edjs (245)-
Perhaps it it now time for you to STF up, as your latest post sadly exposes your complete ignorance…and exposes you as a basement-dwelling, Bolshevik forced-wealth-redistibutor.
Homework? How about having family in France that owns RE? Check. How about having a good friend who puchased- and was allowed to close- on a piece of French RE without having clear title to the property (on a now three-year-old “promise” from a French attorney that “we’ll clear it up later”)? Check. Anyone who is even a casual visitor to France realizes that anything having to do with business or government DOESN’T WORK. Period.
Now, let’s get on to the three whoppers you jammed into your last inane post:
1) “France actually has some of the most buyer protective/friendly legislation in the world.” Yep, they do…if being advised it’s ok to close without having clear title to a property is “buyer-friendly”, France is the bee’s knees.
2) “In the US we are forced to use a lawyer in order to protect our interests and avoid get f….. over by some sleazy RE agent.” False. I am not aware of any place in the US in which it is required that people buying or selling RE use an attorney. Although many in NJ use an attorney to finalize deals, I have never had a client- or attorney- state to me that one of the jobs of the attorney is to protect the client from me.
3) “Heck, a RE agent doesn’t even have to tell the truth as he/she is free of all liabilities concerning the property their (sic) representing.” Utterly false. Failure to disclose material defects about a property is an actionable basis for both civil litigation and professional discipline by the RE Commission.
Perhaps you would be more pleased to be able to buy and sell RE thru the “services” of a bank teller. If US banks have their way, these poorly-paid, unlicensed (as the banks who want to get into RE are federally-chartered, they will not be subject to RE statutes and licensing requirements of individual states) individuals will be able to guide you through an extremely “low-cost” transaction process. Doesn’t that sound like a great way to handle the biggest financial transaction of your life?
Unrealtor [265],
Thanks.
And, edjs, please come to this board with more game than just spewing the “cabal of sleazy/corrupt/overpaid Realtors” line. It played out here long ago and just exposes your dime store intellect.
#269
Clotpoll, take it easy …
I cannot speak of other countries. But…
1) In Hong Kong, buyer pays 1% of closing price to buyer’s agent, seller pays 1% of closing price to seller’s agent. If you don’t use an agent, you don’t have to pay (for buyer and for seller).
2) Sames rules in China. I think the commission is 0.75% for each side.
3) In Hong Kong and China, banks provide loans to the buyers directly. There is no so-called ‘mortgage brokers’. So, you don’t have to pay ‘origination fee’. There is no fee to pay up to front at the closing for mortgage.
4) At closing, the buyer has to pay one type of tax to the government (about 1% of closing price), other fees (1-2K USD for a 400K USD property, such as lawyer fees)
5) Property tax in Hong Kong: 1K USD/year for a 400K USD property).
6) Title is clean at the closing.
I guess, Hong Kong market is not mature since transaction fee is lower compared to USA’s.
Maybe, you can argue, Hong Kong is not a ‘western’ country. As far as I know, the disposable income of Hong Kong resident is comparable to USA’s, if not better, given the fact that they pay 15% of income tax for earning income ONLY with 25K USD deduction.
Here in USA, hard to find a ‘honest’ agent. One easy test, call any agent on http://www.realtor.com, tell them that you are interested in the listing property and you don’t have an agent. Argue with them that since you don’t have an agent, can they take only 3% of the commission and take the other 3% off from the listing price…
Guess what you will hear: NO, it is the LAW that the seller has to pay 6% of the commission. On the other hand, it is not YOU to pay the commission.
This is just one of the tricks REA brain-washes the mass. First, there is no such LAW, they can not count NAR’s rule as LAW, second, it is the buyer pays all commissions one way or the other.
A true story about NJ REA:
One of my friends wanted to purchase a house 1 month ago in NNJ. The seller showed them the survey and claimed the lot size is x acre and didn’t allow them to make a copy of the survey. They used mobile phone to take a picture. Later on, they measured the picture and found out the actual size is just half of the claimed size.
My friend’s agent pushed them to sign the contract all the time. I doubted how professional and how good this REA was since she even couldn’t measure the size of a lot at a glance. And guess what, my friend figured out that the seller himself is a REA! No wonder!!!
#257
I also have first hand knowledge of a leaky in-ground oil tank but our clean up took a few months. Maybe it was because everything was handled by our tank insurance company but from start to finish it was no more than 3 months including the EPA inspection.
#271
EPA should be NJ DEP.
So sweat Bob.
RE: realtor fees
It’s irrelevant to the consumer if the agent received 1% or 6%. The “realtor” slice of the transaction pie is still ~6% — where the money goes after taken from the seller is moot, unless you’re an agent.
To say “My broker gets a cut, my office gets a cut, so I don’t see that much money” is irrelevant to the consumer, who simply sees 6% of his “equity” go out the window.
It’s one damn fine day today, so hope everyone gets out of here, and goes outside.
Dear Clotpoll (267 & 269), what’s with all the negativity and the bashing!! What are you trying to compensate for?
Who are you to say STF up to me… you started the criticizing and ridiculing of posters and their posts. You even took the time to bring in negativity about foreign countries you obviously know nothing about. Now you are the one acting like you have been attacked?
Regarding your comments:
1. Obviously legislation is not a vaccine for stupidity. Think about it. I know this one will sink in sooner or later.
2. I agree, “Forced” is not correct. But you NEED someone who knows the process and is on your side, because on the other side there are you and the seller and (be honest here) the two of you couldn’t care less if the buyer bought the biggest LEMON in history.
3. I know generalizing is not right. The problem is that I have never met an honest RE agent in my life. Not here, not abroad, not anywhere. Regarding your extensive licensing requirements, I seem to remember that JB posted something about how licensing requirements to get a hairdresser license in NJ is harder than to get your RE agent license.
Finally, you may not be sleazy, I hope you are not corrupt and relax, I don’t think you are overpaid. You are just stupid.
Hey I was the one who posted the rant on being new to the game. First, thanks to all who commented… Second, I should probably know this being fresh from class, but I do have to admit (since I’ve been assisting an agent) that there wasn’t much substance to the class, besides the mandatory know what/laws/etc; I’m still kind of clueless as to what I can get into. I mean, what are my options?
Well, let’s consider why I got into it, since you’re curious, and I thought I could get away with not explaining… apparently not =)
I got into it because I love architecture, I love designing, and I love homes. I want to be a smart buyer and know about the business before I buy my own home (with a white picket fence), some day. I grew up on the beach and favor “beach cottages” I got into it because I would like to specialize in beachy properties (eventually) and if I’m successful in NJ – I’m going to attack Cali and FL and some islands. I want to find people their dream home, and their dream vacation cuddy. But, the ultimate step is flipping homes. I know a lot of people in the construction (doors, windows, siding, fences, floors, painting, landscaping, pools, roofing, gutters, marble, kitchen) business, most of which, are dear friends of mine. I’d like to bring them along into business, it would be nice to create an empire, but really just to live comfortable would be even more nice. I know real estate is a hard business, but if I’m able to hit off, and can do my ultimate plan, then maybe I’ll start some kind of designing real estate, interior design business myself, specializing in beach property. So, here it is, I’m getting into it because I like the challenge, I love people, and I want to learn the homes inside and out. I love going to open houses and seeing really nice decoration, use of good material, nice fixtures, etc. I love it, and to be really honest. I want to be a better person. I know being an agent isn’t exactly the answer, but I like the ethics code involved and I like being truthful, I am not afraid to tell people things they don’t want to hear, I just want to help them. I’m obsessed with this challenge and I can’t wait to see the good, bad and ugly.
I truly believe I am going to have a blast with this.
And that’s it.
I guess my response was kind of lame or whatever, but this is my life, I’m young and I don’t have many options. Like I said, I’m not planning to become a millionaire, just make a living and not really have to worry about much. I know as an agent, there’s potential for good money, but there’s more potential to learn, as I see it (esp for my dreams). Agree or disagree, I’ve already learned a lot as an assistant…
Thanks for listening and giving feedback.
Yawn
Too nice of a day to blog..
jb
edjs (276)-
So now you’re bringing up examples of how RE works in two countries that are command-and-control economies. What of value can be gained in the comparison? From your example, buyers and sellers do a lot of direct dealing with each other and with banks. That can be done in the US, too (you can go straight to a bank or a cooperative originator and get a “clean” loan that’s not junked up with fees). The idea that title is magically “clean” at closing is utterly laughable and exposes the giant hole in the middle of your overfried doughnut of an argument; title can never be clean in a communist system, since private property rights don’t exist and property can be seized by the government any time, for any reason (even in Hong Kong). Why even waste money on searching or insuring title under such conditions? Perhaps those low-low fees would allow you to be more comfortable transacting RE in a communist country; I invite you to do so.
I’m not intimate with the cost structures of Hong Kong or Chinese RE, but 1-2% fees probably don’t attract the “best and brightest” of the young, emerging, financially-saavy business class. And, if some miserly 1-2% fee became the norm in the US, you’d be buying and selling homes thru unlicensed twentysomething bank tellers. Is the illusory “savings” of a paltry few thousand in commission worth the chance taken of flying blind into a lemon of a house costing hundreds of thousands of dollars (your statement that agents- as a group- don’t care about clients and have no real liability for misdeeds is utterly ridiculous, incorrect and a knee-jerk generalization with no basis in fact).
In the US economy, people and companies that have nothing to offer a client and cannot add value to the transaction use price as an inducement to transact business with their help. It’s true of WalMart and dollar stores, and it’s true of RE. Many “cut-rate” companies have come and gone over the years; after their price-cutting inducements have failed to actually benefit the public, these companies wither and die, as they invariably are exposed as having nothing of real value to add to the process. These companies never attract the “best and brightest”, since there’s no damn money to be made. After all, who gets the best financial minds, Goldman Sachs or some boiler-room chop shop? God bless us all if RE falls into the hands of banks and cut-rate internet scams like Foxtons…on the other hand, I’d welcome their increased competition; it’d probably drive even more people our way.
The funny thing is, the American public is not forced to do business with us…yet the vast majority choose to do so. The fees we charge are directly related to what the market is willing to bear. So, the numbers are clearly against you and the handful of other basement-dwellers here who’d love to see a future RE transaction model whose greatest feature is a really cheap price. If the US public were that united in its dissatisfaction, things would change plenty fast. As it stands, there are probably more people WITHIN the industry trying to make things truly better than there are from without.
As to your assertion that I am stupid, let’s go with that. I’m a “lifer” in the business, have survived (and am surviving) three bust cycles, own commercial RE and own and direct a successful RE company. I oversee around 125-130 transactions per year, and have done thousands in my life. If I’ve done all that through what must be the most incredible run of luck any idiot such as myself has ever had in human history…then I stand here a stupid man.
However, I’ll stand here and answer your infantile questions and half-baked observations ’til the cows come home…so perhaps my greatest exhibition of stupidity is in trying to elevate a conversation that you seem intent on beginning- and ending- in the muck.
I’m back (280)-
Good luck to you. Please make sure you spend plenty of time in the “people” part of the game, especially in learning to read personalities and the things that trigger fear of loss. At the end of the day, all the other stuff in RE pales in importance to those things.
#283
Clotpoll: you attacked the wrong person. Look like you have a B2 bomber.
title can never be clean in a communist system, since private property rights don’t exist and property can be seized by the government any time, for any reason (even in Hong Kong):
If you never lived there, especially in Hong Kong, just shut up your mouth. There are over 60,000 US citizens live in Hong Kong and many of them own properties. Do you think all these 60,000 fellow US citizens are ‘stupid’? Call US Consulate in Hong Kong, you can verify my data.
Perhaps those low-low fees would allow you to be more comfortable transacting RE in a communist country; I invite you to do so:
In Hong Kong, the low transaction RE fee started from British colony time. Study the history fist and stop your arrogance.
but 1-2% fees probably don’t attract the “best and brightest” of the young, emerging, financially-saavy business class: again, talk to those REA in Hong Kong, you will be surprised how professional they are, maybe better than you?! At least, they know a word called ‘modest’.
The funny thing is, the American public is not forced to do business with us…yet the vast majority choose to do so: because most American don’t know how other countries work and demand a change. Because they are brainwashed by REA and NAR on daily basis. Please dare to name your company here, I will definitely not do business with you. I hope the publics’ mindset will change gradually, the REA has value, but, not the 6% and the way they are doing business.
And your 125-130 transaction per year: go to Hong Kong, UAE, Singapore, you will find that your achievement is just so-so.
I hope those Asian countries stop funding US real estate bubble by not buying US bond. Clotpoll, you don’t like those ‘communists’, as a matter of fact, please count how much mortgage money of your 125 transactions are eventually funded by those communists.
Study history, give the fact and stop your arrogance.
Bob, Post 257
Thanks for the benefit of your experience firsthand. It’ll help many consumers and professionals alike. I just advised a client who’s interested in listing his mom’s house soon to get that UG tank AG asap; it’ll be a huge issue otherwise and a deterrant to the sale.
Clot post 235.
Thanks for your positive feedback. I agree single licensure via broker licensing for all would be the best filtering tool overall.
As it stands, as you know, a licensed salesperson can’t even hope to take the broker’s course until they’re licensed 3 full time years. Change the requirements to broker status only; excellent. I’ll take it in 2008 w/GRI reduction of hours allowed; wouldn’t have that option given the current status quo!
I truly look forward to the broker’s course.
Off Topic-
Is it possible to find out how much a seller has refinanced? Are there any public mortgage records?
Thanks.
the article states wall street money is propping up the high end real estate markets in manhattan. it also states the more affluent markets are holding up fairly well due to supply and demand. makes sense to me but i’m sure not to many of you.
http://news.yahoo.com/s/nm/20070429/bs_nm/usa_property_wealthy_dc_1
Brainlock (285)-
I don’t need to live in a communist country (or like Hong Kong, one shadowed by a communist regime) to understand that private property rights are always subject to termination. 60,000 Americans live in Hong Kong and own property? Great. I hope their ownership rights are never pre-empted. The chances of that may be very slim; however, it’s not a thing I’d be comfortable with.
The American public is brainwashed? By “stupid” people like me? What a lame, played argument. Why don’t you join the trolls and losers at Housing Panic who still get their jollies by spouting this 7th-grade garbage? By the way, which is it? Am I an idiot…or a mastermind of propaganda of the magnitude of Albert Speer?
And, what makes a Hong Kong RE agent fundamentally honest, modest and hardworking…and American RE agents intrinsic louts, cheats and malingerers? You speak of RE agents in such generalities, yet offer nothing beyond blanket invective or blanket praise with no distinction among individuals. Seems like your eagerness to praise or damn entire classes of people might have more to do with Albert Speer- or Goebbels- than anything I’ve said or done.
I don’t really care who started the fee system in Hong Kong. Was it the British? Great. Whatever it is, it doesn’t work here. It’s been tried- in various forms- for years, and it constantly fails.
My 125-130 deals pales in comparison to many agents, both here and abroad. The point I was trying to make is that I didn’t arrive in this business yesterday, and the vagaries of day-to-day business are not enough to drive me out of it.
Finally, I love the old “Chinese stop buying US bonds and the whole world comes crashing down” theory. As if a Chinese boycott of US debt wouldn’t have even worse reprecussions on their own economy…
As far as my company, please click my name and go thru my blog to my website (and thanks for going elsewhere…if and when you decide to waste some RE company’s time). Please do not think I’m wringing my hands over your lost business; my agents and I tend to work best with people who are slightly further up the evolutionary chain than the Piltdown Man (something you have yet to demonstrate). We also tend to work best with people who are more about action than talk; all I’ve seen from you is an ad hominem attack against the entirety of my industry (which started this tedious back-and-forth) and lots of rambling talk from…the tone of which increasingly leads me to believe that you have- and have no intention of having- any skin in the RE game.
Get long, get short…or shut up. And please raise your arguments above the junior-high level.
In a refinance, the original mortgage would have been paid off and a new mortgage would be issued.
Dissolution of Original Mortgage
Initiation of a new mortgage
#290
Like B2 dropped so many bombs. Be careful, some might drop on yourself… Feel free to drop more bombs…
Where is your blog? Dare to share without listing the URL? Don’t behave like a junior-high…
#279
edjs:
Agreed with you. I hope somebody just needs to open his/her ears.
I’m back…
You sound like the type of person what the industry needs more of – you have a love of the preliminaries of the buying and selling process.
The intricacies are more involved but if you have the sincere base you’re operating from, I have a gut feeling you’ll do well. Thank you for explaining further.
IQfall (292)-
Like I said before, click on my name in any of my posts, and it will take you to my blog. Jesus…is this the first blog you’ve ever visited? Let me know if you’re still having trouble; I’ll help you get there.
BTW…I should also clarify one point: per the Constitution of Hong Kong (generously and unilaterally imposed by the Chinese gov’t), capitalism and private property rights will get a 50-year run, before the commies can ostensibly come in and spoil everyone’s party. See Article 5:
http://www.servat.unibe.ch/law/icl/hk00000_.html
Makes you wanna rush out and purchase Hong Kong RE to leave to your heirs, huh?
IQfall (293)-
Perhaps you and edjs can fuse your brainpower and crack triple digits on the IQ scale.
http://www.servat.unibe.ch/law/icl/hk00000_.html
clot: I was going to jump all over this item and you beat me to it.
“…title can never be clean in a communist system, since private property rights don’t exist and property can be seized by the government any time, for any reason (even in Hong Kong…”
From what I understand, real estate property rights in China amount to a license to rent.
Ugh! Duplicated a link and got moderated!
Post 277
It shouldn’t be irrelevant to the consumer where his equity goes. He’s hiring a professional to market his property. 1% gets you nothing, 6% should ensure maximum exposure.
A portion goes to marketing, a portion goes to the real estate agent’s TIME. Hello, we should eventually be reimbursed for our TIME should we not?
Do you in whatever field you’re involved in, get paid for the TIME you invest? I don’t work for free. Do you?
Your equity is lovely. Now my efforts in selling your home are worth a good dime as well. Marketing is expensive; my time and experience has it’s cost. It’s all relative. Wake up, smell the coffee and realize everything has a price.
Flippers flop as housing market cools
By Ryan Nakashima, Associated Press
USATODAY.COM
http://www.usatoday.com/money/economy/housing/2007-04-29-flippers_N.htm
LAS VEGAS — In the rampant real estate speculation of the Las Vegas valley three years ago, people lined up outside Pulte Homes sales offices overnight as if they were waiting for the release of the latest video game console or hot new movie.
Having seen his house in an upscale part of suburban Henderson, Nev. jump $200,000 in value in 18 months, Sam Schwartz felt he couldn’t miss any part of the boom.
He spent the night in the parking lot with TV, snacks and drinks, along with about a hundred other people.
Schwartz intended to buy a new home and then quickly sell it within the year — for a huge profit. Most people waiting were flippers just like him, he said.
“We had seen real evidence of what was possible in this crazy, inflated market, and we just wanted to get a piece of that investment equity,” Schwartz said.
But when home prices unexpectedly took a backward step, many investors seeking to cash in quickly were left “upside-down,” or owing more on their mortgages than what their homes were worth.
The result was a glut of homes in the marketplace, communities spotted with empty houses and for sale signs — and a foreclosure rate in Nevada that leads the nation as owners unable to sell became saddled with unbearable debt payments.
Foreclosure filings across the United States rose 47% last month from a year ago to 149,150 — one for every 775 households, according to statistics from Realty Trac Inc., a foreclosure listing service. And for the third straight month, Nevada’s foreclosure rate led the nation when it rose 220% from a year earlier to 4,738 filings, or one in every 183 households.
In Clark County, which encompasses Las Vegas, one of every 30 homes began the process toward foreclosure last year.
The day Schwartz reserved his home, the sales staff was raising prices $20,000 after every fifth buyer came inside. The $500,000 house he and his wife were eyeing had shot up to $540,000 by the time they sat down. Somehow, it still seemed like a good deal.
“Everybody was thinking, ‘Hey it’s not the end of the world, because the homes across town are selling for $720,000. We have almost $200,000 in equity in the house and it isn’t even built yet,'” Schwartz said.
He and his wife put down $5,000 on a home that would end up costing $560,000 with upgrades.
While the Schwartzes were able to cancel before closing on a property that suddenly was worth only $490,000 — and recoup their deposit on a legal technicality — others were less fortunate.
MORE …
clot: you didn’t let me down – you may even top the Sporanos tonight if we don’t get the killing fields
Re (248),
CB, thanks for going into a bit more detail…
AMS – not much RE activity this weekend for you?
We had this 6% discussion before and it was as ugly as this time around.
IMHO, The only reason 6% is still accepted is because of NAR’s monopoly on the RE industry.
#301:
Good point.
HOUSE OF CARDS,
see my post at #264.
SAS
Post 301 Dumb & baseless assumption. “Thanks” for your input.
Chicago (263),
CB I’m still hounding you for feedback too…
so…factor in “normal” price inflation and overhead inflation in 2001(???) dollars? Would you consider 300-400 to be a generally appropriate entry point for first time buyers of SFH in NNJ? some first time buyers that I know with good credit and deposits (although not 20%) are coming into the market at that price point…some sellers seemed to have learned from the guys that spent 6 mths-1 yr trying to sell 3 bedroom starter homes for 500K and have priced 50-100K lower than similar homes 12-18 mths ago. Just seems to me that in some places the market may have bottomed or is closer to bottoming already. Many first time buyers also seem have a stronger sense of value as far as schools, quality of life, balancing price with taxes for services provided etc. Especially two income married first time buyers.
All that was to say that I think the entry level price point has gone up in real terms (especially for people with some cash and good credit) and will remain so after the crash/correction is done. By how much…???? That’s what I think will be interesting.
Sopranos on and then Bought and Sold at 10!!!!!!!!!!
Ask expert:
I am new to NJ. Try to understand the ‘rules’ of RE here. I have no plan to hire a buyer’s agent. If I buy a house in NJ, can I ask the buyer’s agent to get 3% and give me 3% discount up to front?
Thanks.
ChiFi (295)-
Thanks. Actually, in my post that’s locked in moderation, I went and checked the Constitution of Hong Kong (graciously and unilaterally imposed by the Chinese government)…in Article 5, it states that capitalism and private property rights will be maintained for the first 50 years. Then, presumably, all bets are off.
Makes you wanna rush over there and make some long-term RE investments to pass on to your loved ones, eh?
brain fluid fall (307)-
I’m gonna assume your world-class writing style failed you here…did you intend to ask whether you can ask a buyer’s agent to essentially work for you for free?
If that’s not your question, could you re-state it?
Rent (301)-
But again, I ask: which is the true story here?
1) Realtors are bird-brained nincompoops, who cannot organize a full day of work for themselves, much less organize the structure of their business. Or,
2) Realtors are masters of subliminal influence and propaganda, using sophisticated and nefarious techniques to assert a vitual and literal monopoly upon a process that any private citizen would otherwise be able to easily navigate on his own. This cabal routinely uses collusion and other tactics of intimidation to routinely thwart what would be an easy, profitable exercise…if Realtors didn’t exist.
Ask expert:
I am new to NJ. Try to understand the ‘rules’ of RE here. I have no plan to hire a buyer’s agent. If I buy a house in NJ, can I ask the seller’s agent to get 3% and give me 3% discount up to front? How?
FallDown (311)-
Hey, it’s a free country. Go ahead and try (LOL!).
And, good luck with re-inventing this wheel.
#308, #309, #310
REAs in some countries live with 2% commission. What make NAR’s agents so special?
“brain fluid fall”: Ooops, you are not only dropping bombs, but also biting.
“Then, presumably, all bets are off.”: You make this conclusion for that country? Who are you? A U.N. judge?
“Makes you wanna rush over there and make some long-term RE investments to pass on to your loved ones, eh?”: hmmm, in USA, pay the estate tax first. For your information, there is no estate tax in Hong Kong. You can pass the full value of RE investment to your loved ones.
AMS (297)-
To define this even more precisely…I’d submit that it’s not the public’s concern how much TIME we invest on their behalf, but rather the RESULTS of how we use that time and how much SKILL we bring to bear in obtaining the best possible result.
Many Realtors famously misuse large chunks of time in fruitless or irrelevant effort. In doing so, no value is added to the transaction, and no principal ever stands to gain simply from the sole expenditure of time. The public is not obliged to finance our on-the-job training.
However, to the extent that an agent brings skill to bear in obtaining a favorable result, reward should accrue to him in proportionate fashion. The obsession over fees- expressed as a percentage of sales price- on both sides of the Realtor/client argument fails to address the critical questions:
1) What is the definition of “added value” as it relates to RE?
2) Once a definition of “added value” is agreed upon and measured in terms of performance and result, should the agent not share proportionately in what he has helped achieve?
3) What is the future of an agency model in which top practitioners are expected to deliver added value in the form of outsized results, yet their potential reward is capped in some arbitrary and unilateral manner (i.e., by any compensation solution that is anything other than market-driven)?
4) If the good money to be made in RE ever dries up, where will the top RE agents go? I sure as hell know where I’ll be going.
5) When all the good agents are gone, what will fill the breach?
I guess writing Putin throws you into moderation?
I guess not.
Lost track of time working on a research paper.. Missed the premier of “Bought and Sold”. Did I miss anything worthwhile?
jb
#313
Thank you for your suggestion. I will definitely give a try.
It is late for this week’s discussion. I will re-post this question next week.
The worst case: contact the seller and get rid of seller’s agent, if the seller’s agent doesn’t cooperate. Tell the seller that he/she can simply wait until the contract expires. A win-win for the buyer and the seller!
I love this internet world: most information that an agent provides can be found online: crime rate, school district ranking, transaction history, comparable sales, etc.
As I said, REAs have values, but not as much as that 6%. It is the time to end NAR’s monopoly, call your senators!
Clot #311, If the RE marketplace was efficient don’t you think a RE agent should pocket more than the 2% that he/she finally appears to make? We are talking about 67% lost to parties that the seller and buyer never interact with.
6% on a ‘starter home’ of $500k comes to 3 years of RE taxes in NJ (approx ofcourse). Now, anyone complaining of high taxes should also complain about the NAR cartel ripping off buyers and sellers.
Clot, to me, you and I are just players caught in the show orchestrated by the (NAR) “system”
As it stands now, at least 4 parties get compensated via that commission. The buyers agent, the buyers broker, the sellers agent, and the sellers broker. If there were referrals involved, the referral agent would be due a cut. If the lead came through a lead-generation firm, they might be due a cut as well.
Given this breakdown, at a 5% or 6% commission (and at typical splits), no agent ever gets more than 2%. Assuming a 50/50 split for both sides of the transaction, a 6% commission is only 1.50% to a piece to the both the buyer and seller agents.
jb
Clot made a good point about single licensing above that was largely ignored. What better way to lower commissions than to reduce the number of hands in the pot?
#322:
jb: thanks.
Can you address my question in #312? Is it possible in NJ?
gsmls: 32,877 and rising it seems….
Rentlord (301),
bullseye! Providing public access to MLS through a fee based subscription mechanism will infact help NAR profit margins. Those who think can benefit from complete MLS access will pay a fee to NAR others can pay 6% to a realtor.
Hey thanks for responding and AMS thanks for your kind words.
By the way, I am not quitting my NIGHT job. bartending. come on, summertime, beach area…
I am new to NJ. Try to understand the ‘rules’ of RE here. I have no plan to hire a buyer’s agent. If I buy a house in NJ, can I ask the seller’s agent to get 3% and give me 3% discount up to front? How?
Not possible. First, the sales agent can’t represent you, it violates the principle of agency. An agent can only represent one side of the transaction unless both parties enter into a dual disclosed agency relationship. Since most brokerages won’t allow this, they will most likely want to assign you an agent to act on your behalf.
Why not just try to find a buyers agent that will work for a reduced commission? If the agent will work for 1% (and his/her broker allows it), it would save you 2% on a 6% listing.
jb
Just thinking about ways to properly compensate performance, but also bring some level of professionalism to the NAR’s current scheme, which for whatever reason, is perceived as a consumer crapshoot right now.
How much IS it worth to have a house sold, within 5% of the average DOM for the last three months, and within 5% of the comp?
I mean, is there indexing for agent performance out there, or is it all hearsay?
Has this been quantified to the extent that a fund manager’s performance gets quantified?
If I’m paying 6% on $500k ($30k..more than the entire life savings of many, if not most Americans) shouldn’t I have some concrete performance criteria on which to base my selection of my agent?
I’m not saying that it’s wrong/right to pay $30k.
But that’s a chunk of change. When I’m thinking about investing that kind of money, I make sure the investment performance is there relative to some standard, or that I at least understand any discrepancies.
Hong Kong’s PCCW seeks delisting from New York effective May 18
http://www.forbes.com/technology/feeds/afx/2007/04/29/afx3666082.html
The company said in a statement it reached the decision after considering, among other things, the time and cost of maintaining a listing in the US and meeting regulatory compliance requirements.
Cars Worth Less Than the Loans
http://www.washingtonpost.com/wp-dyn/content/article/2007/04/28/AR2007042801297.html?hpid=sec-business
Car valuations matter because an increasing number of consumers are “upside down” on their auto loans, meaning they owe more than the car is worth. In the first quarter of 2007, 29 percent of consumers were upside down on their vehicles, Kelley Blue Book reports. Additionally, on average, people traded in cars on which they still owed more than $3,600. And what do many of these buyers do with that loan balance when they want another car?
They roll that negative equity — the $3,600 and often much more — into yet another vehicle loan.
>>
Why don’t cars appreciate at 5% year? :)
Pricefall and RentLord:
Nobody is forcing you to do business with a Realtor. You are free to go to open houses and represent yourself. Do your homework and come up with your own price. Discount it 3% for the buyers commission and present it to the seller’s agent.
The arrangement between the seller and their representation is none of your business. If you formulate your own price, you can sleep at night knowing that you made a great deal.
I know who is the best Realtor in our town. If I decide to sell, I’d rather pay her 6% than 4% to a so-so agent. What good does it do to have 2% of zero? That 2% will get my house sold. That’s what it’s all about.
JB (319),
It was interesting. Mulitiple bid situation with one agent. She handled it well…(of course…it’s tv). It was good to see things from the “inside” perspective. I think the show will help buyers to understand the process and feel less paranoid. As far as sellers…I don’t know. That part of the show seemed lighter to me…try to catch the repeat if you can. Definately one of the better new shows on HGTV.
B+
#328
JB: Thanks.
“Since most brokerages won’t allow this, they will most likely want to assign you an agent to act on your behalf.” No wonder this NAR system s**ks.
What’s the normal term of contract, regarding the representation of seller’s agent? 6 months? 12 months?
This leaves me two options:
1) Grab an agent with reduced commission
2) Contact the seller directly to get rid of both agents. Just send the seller my bid directly, and tell him/her that this is my bid AFTER his/her contract with his/her agent expires. So, the seller can FSBO. Given the current market’s condition, it is norm for a seller couldn’t sell the property within 6 months.
#332 d1ck2bu7t,
Nobody is forcing you to do business with a Realtor.
WRONG! Can I buy a house listed on the MLS without involving a Realtor?
The arrangement between the seller and their representation is none of your business.
Who’s paying again?
I know who is the best Realtor in our town. YOU ofcourse!
That’s what it’s all about.
Ofcourse Lereah’s cheerleader! It’s all about your pom poms. LOL
Clot #269,
You are going out on a limb when you say that I think that the full commissions hits the realtor’s bank account. I am fully aware that this is not the case.
I agree with Unrealtor #277.
In any case, stating that a mature market justifies a higher commission is akin to saying that the FX spread on a non-deliverable forward should be tighter than that on a G7 currency FX forward. It just doesn’t make sense. Under similar laissez faire conditions, a more efficient market should always have lower transaction costs priced in, unless there are the usual hindrances to perfect competition such as legislators and lobbyists.
I happen to think that some realtors do provide good service for their fees. But I also think that Foxtons is moving the industry in the right direction. Lower transaction costs should theoretically improve liquidity especially in times like these. It is unfortunate that they weren’t doing a better job with the implementation of their strategy.
#328
JB: Thanks.
“Since most brokerages won’t allow this, they will most likely want to assign you an agent to act on your behalf.”
Since you mention “most likely”, is it still possible for the buyer to represent him/herself during this transaction?
Not to throw fuel on the fire but China recently passed laws to strengthen private property laws (in the face of the burgeoning middle class in the new faux-Capitalist China):
http://www.pbs.org/newshour/updates/asia/jan-june07/china_03-16.html
“I know who is the best Realtor in our town. If I decide to sell, I’d rather pay her 6% than 4% to a so-so agent. What good does it do to have 2% of zero?”
Why do we have to accept that a so-so agent is worth 4%? Why would anyone sign up a so-so agent for 4% if MLS is accesible for a flat fee?
335, Rentloser:
Now you’re whining because other people choose to use Realtors?!? Punish them by not buying their house. Or better yet, go cry on their lawn.
Step up to the plate and make your own deal. Go overpay for a FSBO because obviously you too smart to deal with outside help. The same Realtors that you hate will be dancing in the streets because a sucker like you raised their comps.
Or keep sobbing about the big bad Realtors. Boo-hoo, Boo-hoo. I have my house. I found a good agent and she brought me a great deal.
ac (336)-
“But I also think that Foxtons is moving the industry in the right direction. Lower transaction costs should theoretically improve liquidity especially in times like these. It is unfortunate that they weren’t doing a better job with the implementation of their strategy.”
The Edsel looked good, too…on paper.
d2b (340)-
No big. It looks like a whole new crop of bunker-dwelling LOD losers just ripened and burst on this board this weekend.
Their fundamental misreading of RE as an asset class and the subsequent idiotic postulations (that haven’t been made here since September or October of last year) are laughable…and ultimately, pathetic. What really takes the cake is the moronic bravado of PriceFall, who thinks he can re-invent the wheel, pulling such “sharp” moves as forcing discounts from listing agents and colluding with sellers to cut agents out of potential deals. The sad thing is, someday Mr. Fall may finally decide to engage an agent…and unconsciously confirm his own bias against the business by associating himself with the biggest shyster out there. I’ve seen it happen more than once; the people who hate RE agents the most always seem to hook up with the worst among us. They expect dishonesty and incompetence, and then go out and find it.
d2b (340)-
“Go overpay for a FSBO because obviously you’re too smart to deal with outside help. The same Realtors that you hate will be dancing in the streets because a sucker like you raised their comps.”
Hardy-har! Can’t tell you how many times I saw this happen when the market was running hot.
rebar (339)-
Check the track record of the local “flat fee ML access” brokers. Less than stellar.
Funny, but most of the homes they “list” come from FSBO websites who offer the “guarantee” that if your home doesn’t sell, they’ll refund your fee…IF (and only if) you list your home with their “affiliated and approved” broker.
If this type of brokerage is so terrific, why is it that they have only miniscule market share and scores of withdrawn/expired listings? Why isn’t the world rushing to engage their services?
Oh, I forgot…it’s our mean little monopoly, freezing them out.
Please.
As I said before, I’m not a Realtor. I know what I know, so I will turn to someone else for help when it involves complex situations.
My response to RentLord was actually meant to help. I would have no problem engaging a sellers agent directly to get questions answered while working on an offer.
I see more value in the listing agent than the buyer’s agent. If buying a home, I would do most of the legwork myself and then bring in the buyer’s agent to wrap up the process, because she would fire me otherwise. I can be a real pain in the a**. I wouldn’t want to waste the agent’s time while grinding through homes. Again this is my opinion.
I understand that ultimately I pay for both agents. But I’m going to concentrate making a good deal and getting the right property. I can’t control the behind the scenes stuff. Once I read about title insurance. I find it outrageous, but I’m not going to refuse to buy because of it. It would be like jumping off a bridge to avoid paying a toll. I’d be the smartest guy in town until I hit the ground.
I’m going to go get a doughnut. I’m buying a doughnut because I’m hungry. I don’t care what it cost to make and how much the lady behind the counter makes.
d1ck 2 be # 340 –
fyi – I’m also a home owner (twice over).
It does not matter what my personal situation is. We are talking about a monopolistic NAR and its cheerleaders like you. Stop the GOP-style rhetoric and don’t try to change the subject.
Just a question.
Lets say you make an offer directly to a listing agent, but you stipulate you want the buyer side commission eliminated and the price discounted by an additional 3%.
Who is to say the seller wants to give you that additional 3% back as a discount? As a seller I might want that 3% in my own pocket, no discount. Heck, it’s my equity after all.
Why should the buyer be entitled to that 3% if they represent themselves?
jb
Clotpoll: You’d better study economic 101 regarding efficient market before you push your NAR’s monopoly 6% all the time.
6% is not a ‘good’ example of free market.
“who thinks he can re-invent the wheel, pulling such “sharp” moves as forcing discounts from listing agents and colluding with sellers to cut agents out of potential deals.”: Hmmm, it is perfectly legal and I will do it again. Maybe, contact one of your sellers?
“Mr. Fall may finally decide to engage an agent”: I might hire you, test your IQ and fire you. It is LEGAL.
As I said, REA has value, but not 6%. Agents in some countries can live with 2%. Do you think NAR’s agents out-smart 2% agents 200%? I don’t think so, because an average person can pass the NAR exam with 1 week’s study; how advanced these skills?
I am not re-inventing the wheel. I bought and sold house 4 times in other states, none of these transactions got agents involved. If the commission was 2%, I would love to get agents involved.
Why are you so angry when I revealed 2% and those tricks to avoid agents? You think you knew RE market better than lots of people here in the forum? What kind of “value add” a REA can provide to justify 6%?
Broker/agent fees of other industries, such as travel, stock brokerage, etc, dropped dramatically in the internet age; because people can get information on the internet, making those agencies less and less valuable.
REA is nothing special.
JB #347 –
What are the odds that such an offer will even be submitted to the seller by their agent?
The buyer (and for the most part) even the seller is at the mercy of the listing agent. a) the commission is determined long before the buyer came knocking,
b) even if the agent is fired he is entitled to his commission under the law (look at Jerry Seinfield’s case).
It’s a monopoly favoring the Realtor and his agency.
Richie (291),
Thanks.
Why not just go ahead and screw the agents over?
If a home you are interested has a contract near expiration, contact the buyer and let them know that you’d like to make a deal after the contract (and any other contingencies) expire.
If you go this route, do not make contact with the either the listing agent, or any other buyers agents. At no point should you ever let an agent claim that they are the “procuring cause”.
Or, you can try to find a home that is listed under an “exclusive agency” contract. This lets the buyer sell the home on their own, without an agent. In this case contact the buyer directly as well. These listing types exist in NJ, but they aren’t very common. For example, only 82 listings in Morris out of more than 3,600 are this type.
jb
RentLoser:
I really don’t care about the real estate monopoly. I’m not buying or selling my house. But if I were I would rather figure out a way to manipulate the system rather than reinvent the wheel. There are ways to do this. Drop off a copy of your offer to make sure that the seller gets it.
My positive experience with one Realtor hardly constitutes a glowing endorsement for the whole industry. Sure there are issues, but it’s their system. You know the commission structure, so discount accordingly.
The bottom line is my bottom line. I’m going to do what I need to do to reach my goal. If I were selling, I would list with an agent. I want maximum exposure and I wouldn’t want to have to show my house. If I were buying, I would go it alone for a while until I found a place. Then I would bring in someone that is better suited to close a deal.
Now, I’m getting back to work, so I don’t have time to respond to your clever twists on my screen name. You just keep screaming with your fingers in your ears. Someday the entire world will come around.
#349 RentL0rd
Just mail your offer to the seller. It might be better to find the seller’s name from county record.
#351 JB
“At no point should you ever let an agent claim that they are the “procuring cause”.”: If I walk into a open house, and contact the seller after contract expires, will ‘procuring cause’ apply? Your view is appreciated.
Guys – I’m not asking for advice. After 3 RE transactions, I know better. I am just stating how unfair the RE industry is.
d2b, regarding your comment “Someday the entire world will come around.” – It only takes a few at the top to call the shots on changing the commission structure (or atleast put NAR under the microscope for monopoly). It does not take the entire herd to achieve this.
Price Fall (348)-
You further expose your abject ignorance with each post. Colluding with a seller to cut an agent out of a deal on a listed property is a breach of the listing agreement, which most certainly IS a valid contract…and enforceable. In addition, most listing agreements also have a 60-90 day “protection period” after expiration, to discourage buyers from waiting until properties expire to approach sellers directly with offers.
You also seem to be working under the assumption that sellers who have listed with an agent have done so under duress and that there’s a wide audience of angry sellers waiting to entertain your sleazy proposals. Nothing could be further from the truth. Most of my clients over the years would’ve hung up the phone on you if you called them with one of your harebrained ideas.
Call me? Don’t bother. You couldn’t make it thru the first five questions of my interview (yes…I interview prospective clients). Sleazeballs and wheel-reinventors need not apply.
If you have bought successfully in the past without ever using an agent, why the interest in coming here and defaming my industry? You’ve ostensibly done well and have never needed us. Why the desire to go on the attack?
Your comparison of RE as an asset class to travel agency and stock brokerage is predictable and again shows your lack of comprehension. Plane tickets, hotel packages and securities are all mark-to-market, “commoditized” assets; RE is not marked to market and is illiquid. Over the years, scores of companies have attempted to treat RE- and RE sales skills- as fungible, commoditized entities. The one common denominator among all who have tried this is failure.
The day that you can put a price tag on a house, and all the potential buyers in the running for that house are willing to pay the same price for it, you’ve turned RE into a commodity. At that point, the deal you get and the price you pay will simply depend upon which living-box you choose, and the timing of when you click the “Buy Now” button. Until then, enjoy your continuing effort to re-invent the wheel.
BTW…to you, RentLard and others: if you engage me to help you, agree to pay me 30K, and I make- or save- you 40K, have you gained or lost?
Lard (355)-
Again, where’s the monopoly? You can go FSBO, flat-fee ML access or any number of alternative routes to transact RE. Anyone can buy or sell a house. Information on RE is ubiquitous. If you can’t get it in one place, go to another.
And, who are these “people at the top”? Congress? The board of NAR? What’s there to discuss? I have plenty of quibbles with NAR, but in all the communications I get from them, I’ve never seen mention or discussion of commissions…from ANY point of view.
The reality is, you are a member of a trace minority of people who feel entitled to free access to the intellectual property of others- intellectual property which goes far beyond mere compilations of basic information- and is looking for something for nothing. Over 85% of all Americans who sell a home simply engage an agent and get on with it. We don’t hold these people at gunpoint…they CHOOSE to engage us. We provide a simple level of comfort and convenience that they are willing to pay for.
If millions of American homeowners mobilized against us in dissatisfaction, our fees would reflect this situation immediately. Certainly, there’s no shortage of “alternative” RE companies out there shouting to high heavens how traditional RE is a useless, money-sucking cost center in the sale of property. Why, after years of this saturation of negative publicity, do so many Americans remain unmoved? As it stands, commissions- as a percentage of selling price- have gone DOWN over the past 10 years, so the allegation that we’re colluding to “fix” fees is laughable. If we’re doing that, then we’re not doing a very good job of it.
Clotpoll:
“Call me? Don’t bother. You couldn’t make it thru the first five questions of my interview”: Dare to share your first ‘sharpest’/greediest questions? A piece of cake to fool you around.
“BTW…to you, RentLard and others: if you engage me to help you, agree to pay me 30K, and I make- or save- you 40K, have you gained or lost?”
Pay you 30K? Give me a break. Your info is worthless, at least to me.
“defaming my industry”? I don’t have to ‘defame’. It is already ‘notorious’.
“Until then, enjoy your continuing effort to re-invent the wheel.”: I have already done so. Just need to verify in NJ.
“most listing agreements also have a 60-90 day “protection period” after expiration, to discourage buyers from waiting until properties expire to approach sellers directly with offers.”: You just list another fact how greedy the NAR is.
#357: RentL0rd
Looks like “Clotpoll” is full-time NAR watchdogs, no, a watch-mosquito:
http://ruina.tam.cornell.edu/Personal%20photos/KonMin_A2_MacroSamples/originals/mosquito.JPG
Clotpoll: you win, as usual!
FallDown (358)-
I was beginning to think I was going too hard on you; however, it appears I haven’t been hard enough. Each subsequent post reveals you to be more of a liar and dirtbag than I originally sized you up as being.
Let’s go to your latest list of idiocies:
1. I don’t ask “sharpest/greediest questions”. My questioning is for the purpose of discovering what a prospect’s needs are and whether I can help. Some people- like you- are unable to accept or acknowledge help…for them, I have nothing to offer.
2. My “information”- as is all RE information- is indeed useless. That info is ubiquitous has rendered it so. However, my knowledge and skill are worth plenty. Perhaps you are one of the many LODs who have cannot understand the difference between information and actionable knowledge.
3. Please keep us posted on your success in encouraging people to breach valid NJ contracts. Very impressive.
4. And, how is it that your efforts to circumvent and/or breach valid agreements is somehow acceptable behavior…while if a Realtor did the same thing, you would probably howl with indignation? The only explanation for this would be that you are a sociopath; judging from the tone and content of your writing, that may well be the case.
Enjoy your Googling for more bug pictures.
Hey Genius (359)-
Go back and read some archived stuff here. I’m no apologist for NAR. In fact, I’m quite the opposite.
Notice that no one here is joining you in your feeble attempts to take a run at me. Each successive post of yours tops the previous one on the idiot scale.
Googling for bug pictures is a good activity for you. Keep it up.
Hey 360,
Take a rest and prepare for the next fight for your 30K nonsense fees…
#360
Impressive fight-back:
1) Your info is useless to me, let me re-state. Your info might be useful for some buyers who don’t know how to dig out information.
2) “However, my knowledge and skill are worth plenty”: Hmmm, post some testimonials?!
3) “Please keep us posted on your success in encouraging people to breach valid NJ contracts.”: My success is legal and of course, impressive.
4) “And, how is it that your efforts to circumvent and/or breach valid agreements is somehow acceptable behavior”: See, how frightened you are, are you scared by these legal tactics?