From the Wall Street Journal:
Lenders Get Tougher
Qualifying for a Mortgage Becomes Harder,
Even for Applicants With Good Credit,
As Banks Probe Deeper Into Personal Finances
By RUTH SIMON
May 15, 2007; Page D1
Mortgage lenders are beginning to scrutinize borrowers more closely, causing some loan applicants, even those with good credit, to face higher costs and more hassles.
As the number of delinquent mortgages climbs, lenders have tightened their standards for issuing loans, including such well-publicized moves as raising minimum credit scores and cutting back on 100% financing and low-documentation loans. Now, some lenders are probing more intently would-be borrowers’ finances. They are taking a tougher look at how much the property a borrower wants to buy is worth. They are peering further into clients’ pasts for credit problems and requiring more in-depth reviews of borrowers who say they are self-employed. Some lenders are taking a harder stance when it comes to whose credit score a couple can use when applying for a mortgage, rather than simply allowing them to use the higher of the two scores.
“There’s no question that [lenders] are digging deeper,” says Doug Duncan, chief economist of the Mortgage Bankers Association. “The pendulum is swinging a little farther to the conservative side,” he says.
Tighter lending standards are adding pressure to an already soft housing market. Last week, the National Association of Realtors forecast the first annual decline in the median price of an existing home since the group began tracking home prices in the late 1960s, in part because mortgages are more difficult to get.
…
Looser standards weren’t much of a problem when home prices were climbing. But as the housing market has cooled, more borrowers are winding up in trouble. The mortgage delinquency rate climbed to 2.87% in the first quarter from a recent low of 2.03% in late 2005, according to Equifax Inc. and Moody’s Economy Inc.Some lenders are also doing more to ensure that the property is as described by the borrower. For instance, they are checking Web sources such as craigslist.org to determine whether a second home is really an investment property, which is considered riskier. Richard Redmond, a mortgage broker in Larkspur, Calif., says one of his clients was turned down at the last minute for a refinance on a rental property after the lender determined that it was a bed and breakfast, which is considered a commercial property.
“The increased scrutiny we’re getting now would have been normal in the 1990s,” although the Internet gives lenders today immediate access to more complete information, says Mr. Redmond. The broker says he supports the return to tighter lending standards because it will boost the confidence of investors who buy mortgage-backed securities, which will help keep rates low while providing liquidity for the housing market.
From Reuters via the LA Times:
U.S. banks tighten mortgage standards
A Fed survey finds stricter credit rules for sub-prime and nontraditional loans.
A wide swath of U.S. banks tightened lending standards for nontraditional and sub-prime home mortgages in recent months, while terms for commercial and industrial loans eased amid tough competition, the Federal Reserve said Monday.
The Fed, in its April survey of senior loan officers, said 45% of domestic banks polled reported a tightening of nontraditional residential mortgage standards.
More than half the institutions originating sub-prime mortgages also tightened credit standards.
The survey, which queried 53 U.S. banks on commercial and household lending practices, also found tighter prime lending practices among 15% of respondents. But the Fed said these actions were not associated with tighter standards for sub-prime and nontraditional mortgages, which include payment-option adjustable-rate loans and interest-only mortgages.
One-fifth of respondents reported lower demand for all types of home mortgages in the last three months.
Default rates in the sub-prime segment of the market have jumped in recent months as the housing sector has slowed and home prices have fallen.
From Reuters:
HSBC dips after U.S. mortgage bad debts rise
HSBC (HSBA.L: Quote, Profile , Research) shares drifted lower on Tuesday after Europe’s biggest bank reported another big jump in bad debts at its U.S.-based consumer finance arm, although it saw the value of its stake in a Chinese bank soar.
HSBC Finance said in a regulatory filing late on Monday its net income was $541 million in the first quarter, down 39 percent from a year earlier. The unit set aside $1.7 billion for credit losses, almost double a year ago.
Dozens of lenders to the U.S. subprime mortgage market were hit hard by a sharp downturn last year, forcing HSBC — one of the biggest players in the segment — to write off bad debts of $10.6 billion, compared to $7.8 billion in 2005.
From Bloomberg:
Easter Bonnets Turn Retail Sales Inside Out: Caroline Baum
Every piece of news suggesting the U.S. economy is weak gets dissected, parsed, interpreted and spun as a positive.
Business inventories probably fell in the first quarter, or else they rose at a slower pace than the prior one, lopping about 1 percentage point off growth.
Not to worry: Inventories will go up in the current quarter.
What if final demand stays soft? There are hints that the American consumer is finally cutting back on his spending. Retail sales fell in April for the first time in seven months. Chain stores had their worst month in at least 27 years.
Not to worry: Bad weather and an early Easter were to blame.
Maybe I just hang out with the wrong set of people, but I have yet to find anyone who shops specifically for Easter. What exactly do folks buy for this portable holiday, which sometimes falls in March and other times in April and seems to have such a potent effect on sales?
…
What he does do, when he isn’t keeping tabs on women’s fashion, is looking at hard data. He found that inflation- adjusted retail sales fell in both March and April. (He deflates nominal retail sales by the consumer price index for commodities.)
“Revised March nominal retail sales increased 0.97 percent,” he says. “The CPI for commodities increased 1.22 percent in March,” which means real sales fell.
April’s nominal decline of 0.2 percent will translate into a decline in inflation-adjusted retail sales as well.
“Although two consecutive months of contracting real retail sales is not the rarest event, in conjunction with falling house prices, I would conclude that it’s not good,” Kasriel says.
Home Depot First-Quarter Profit Falls 30% on Housing Slowdown
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNPNS41g4gpY&refer=home
“There is not a heck of a lot of upside at this point,” said Patricia Edwards, a Seattle-based money manager at Wentworth, Hauser & Violich. The firm holds $9.6 billion in assets including Home Depot shares. “I don’t expect sentiment to change until we see the whites of the uptick’s eyes. That’s going to take a while.”
CPI due out at 8:30 this morning
Missed the whole FSBO vs realtor listings debate yesterday.
Clot – question on your arguments.
1) You’ve said that a good realtor would typically get 8-10% more than what a seller would get the fsbo route by getting a more competitive bidding env. But where are the competitive biddings now a days?
2) An informed buyer who has done his/her research, why would a realtor’s opinion sway him about a home’s value. Case in the point – NJGal on this board. She’s bidding for a 3rd house and she seems to know the area she is looking at very well. She knows that she was kind of overbidding for the first home she bid and is bidding right for the current one. I’m 100% sure she would have spotted this home even if it were FSBO and not by MLS. Another e.g. I was looking at houses in Monroe. I see a new construction selling fsbo at 480K (came down from 505K). I’m pretty sure that fsbo seller would be ready to come down even more if I were to negotiate. At the same time there is another seller who is going via a realtor who has listed exact same model home in same town for 525K. I agree – this has realtor commission built in – but a buyer who has been doing research would be able to spot this and not go for the realtor brokered listing. Dont you agree?
3) From reading the posts over last few months, we can agree that realtors are pressuring current sellers to decrease prices to sell. An 8-10% below list price offer- and the realtor would try to lean on seller to take it. Now for an FSBO seller who has done reasearch, did the marketing of his home correctly to generate enough traffic, if he starts at pricing his house 8% below and sells eventually at 10% below – how did it make it better for him to hire an agent (notice I’ve said this fsbo seller knows market, underpriced his house and marketed well). The agent who used realtor ended up paying 6% to agent, although he got a price one 1-2% more than the FSBO guy. For a 700K house the commission comes to 50K. Man – I’d try FSBO anyday to save that 50K. What is the worse that can happen? The house wont sell – right. Well that could be the case even with broker listed properties. If it didnt sell, I can always go to realtor and try that route, but at least I would have the satisfaction that I tried to not pay 50K in commissions.
4) Lastly – I think there has to be some NAR/Realtor propaganda against fsbos. Where did these numbers of 85% fsbos not selling, almost all of them being overpriced come? NAR or some independent agency??
I really think it is a part of scare tactic that realtors apply to common man, so that they dont try that route. You can have your opinion, but the fact that realtors try to hide all info and have >80% marketshare, fits them into the category of a monoply. I hope some attorneys take notice and bring a lawsuit to break it into smaller companies with better competition.
Just my opinion. Nothing personal.
A little correction to post 5. For 700K house, the commission is 42k – which is still big.
Another case – A friend of mine was looking. He found a house for 550K and is now in contract for 525K. They started bidding at 500K against the advice of their buyer’s agenet who had adviced them to start offering at 525K.
Currently his agent is saying that he(agent) is surprised that the owner accepted his offer, because the area is very hot :). According to agent, they are lucky to get that house for 525K.
I’ll let you people judge on how honest is this agent.
“Looser standards weren’t much of a problem when home prices were climbing.”
I think they miss the point here. Aren’t “looser standards” the reason why house prices were climbing?
att: The agent needs to visit this site.
I was out yesterday so could not join in on Agent discussion. So continuing the theme today. I think the main question here is, though various means like FSBO, Internet etc… exist, why do people choose to pay high RE commission. Here is my crack at this,
1. Most people hate selling & negotiating. They have never been trained in their formal education. Even though they do many times demanding jobs (like Research, complex projects etc…), they are afraid to sell.
2. RE agents though start novice, but get better within first few transactions.
3. Sellers when they try to sell on their own, most keep asking prices same as other houses that have RE agent listing. They think because they are selling on their own, they should get more money.
In my opinion, the item #3 is most important. When FSBO’s will start asking prices which are at least 4% to 6% less then comparable houses, they are not going to be successful.
SG (post 9):
In my opinion, the item #3 is most important. When FSBO’s will start asking prices which are at least 4% to 6% less then comparable houses, they are not going to be successful.
I tend to disagree. If an FSBO is priced 6% less to start with as compared to broker listed houses, why is he not going to be successful?? esp. if he is willing to negotiate further?
att (5)-
Tedious. Very tedious.
The FSBO thing was yesterday. I’m played out on it. Let’s just say you’re 100% right on everything.
Are you actually ever going to buy a house…or just continue to construct these elaborate “what if” scenarios?
Clot (11) – I’m going to wait out 2007 and let the prices come back to earth :).
SG
Do you feel the reasons you listed will hold good if MLS database is made public for a flat fee? If MLS information is available publicly, service providers like Zillow will provide better services like comps, days on the market, ‘actual’ sale price which will help buyers negotiate a FSBO sale.
If Realtor led sale price falls on lower commission, FSBO will follow suite.
Did I mention in my post #7 that it was a townhome – not a house. So my friend got a 5% discount on OLP of a townhome.
Not bad, considering how “hot” RE in NJ is.
Do you feel the reasons you listed will hold good if MLS database is made public for a flat fee? If MLS information is available publicly, service providers like Zillow will provide better services like comps, days on the market, ‘actual’ sale price which will help buyers negotiate a FSBO sale.
Allow me to play counterpoint..
Realize that each individual MLS is a privately owned organization. These organizations were developed to allow for broker cooperation. They own the data that is generated based on the activity that takes place within their system. They don’t have to give that data away to anyone for free. If they make it available for public consumption, kudos.
jb
Negative cash flow anyone?
http://newjersey.craigslist.org/rfs/328733391.html
Second counterpoint. Allowing the public to list their own properties on the MLS for a “flat fee” would never work.
The following reasons are why:
1) Believe it or not, rules govern the timeframe in which listing statuses must be updated. When a listing goes ARIP, UC, Sold, the listing must be updated in a timely fashion or the listing agent gets fined. Brokers and agents take these fines very seriously, as they can result in a loss of MLS access, this would be devastating to an agency. What motivation is there for the public to keep their listing statuses updated in a timely manner? I’ve called owners about homes for sale on some FSBO sites, only to hear that they were sold months ago. What use is a stale database?
2) What motivation is there for a seller to be sure that property details are accurate on the listing? If you don’t think this is an issue, realize that Brokers need to carry E&O insurance (errors and ommissions) for this purpose. You don’t think an owner would puff the listing and omit defects?
3) Broker cooperation. The reason MLS systems work is because by listing on an MLS the listing agency also signs a contract allowing for broker cooperation. This contract is “insurance” for the buyers agency, it guarantees they’ll be compensated for securing a willing, able, and ready buyer. The seller would need to sign a similar contract which clearly states that any cooperating brokers will be compensated for their work. Without this, flat fee or FSBO only MLS systems are dead in the water. It means that the property will have very little exposure out of the system it’s displayed on.
4) Same goes for IDX-display sites. You don’t think exposure on Realtor.com is free, do you?
5) Volume. Even if a viable alternative did exist (I argue it already does), what percentage of people will still continue to use the traditional agency methods? Thus, without broker cooperation, exposure would still be significantly less than required.
jb
6) #3 would (obviously) require that a commission be paid to the buyers agency.
jb
“The FSBO thing was yesterday”
Clot,
I’m tired also.
“The increased scrutiny we’re getting now would have been normal in the 1990s,”
1990’s? R.E.M.- Losing my religion.
“The FSBO thing was yesterday”
Agreed. I hate realtor commissions… I have doing the laundry too.
…thats ‘HATE doing the laundry too.’
ugh.
#16 hobokenite Says:
I thought you could vacate the tenant if the buyer wants to live there? So I don’t get it? How is the tenant protected??
How is the tenant protected??
I admit, I’m not up to date on my section eight, but it might be a tenant protection voucher.
jb
I do think RE Agents & Commission are important part of buying & selling. I think 95% of house sales will be done with involvement of brokers. I missed out on yesterday’s discssions.
On topic of transaction costs, I read long time ago that Mortgage brokers get about 3% of loan value as commission. Is that correct? That seems very high.
If you want to rattle a racket, go after the title insurance business.
jb
From MarketWatch:
April core CPI up 0.2% as expected
U.S. consumer prices increased 0.4% in April, boosted by increases for energy and groceries, the Labor Department reported Tuesday. Excluding food and energy, however, the core consumer price index rose 0.2% as expected, cutting the annual gain in the core down to a one-year low of 2.3%. The CPI is up 2.6% in the past year. Economists surveyed by MarketWatch were expecting the CPI to rise 0.5% in April. The CPI increased 0.6% in March, with the core up 0.1%. The price gains in April were fueled by food, energy and medical care costs. Inflation moderated for owners’ equivalent rent, rents, apparel and air fares.
Antitrump,
I believe (but I’m not sure) that in the event that the property is sold while a tenant lives in it, he is “protected” for a period of 3 years (i.e. he can’t be compelled to move out). This is in addition to any rent control which may apply, as most of Hoboken is rent controlled.
So, in addition to the negative cash flow, if the market declines by 10%/year for the next 3 years, you can look forward to losing ~$45,000/year before you can rent the property out at “market rates”, which will probably be lower than they are today anyway.
Inflation moderated for owners’ equivalent rent
I expect to see the official inflation statistics moderate significantly over the coming months. 30% of the core inflation statistic is based on “owner equivalent rent”. With the housing market dropping and the number of homes for sale, vacant homes and foreclosures at record highs, many homes will be converted to rentals. This will put downward pressure on rental prices and make official inflation look tame.
These tame inflation statistics will give the Fed the green light to lower rates should they choose to do so…I’m not saying they will…
Re: CPI
My grocery shopping habits have not changed much in the last 2 yrs. But what I get for the same $100. is considerably less. Used to fill 5 shopping bags, today only 3 for same $ amount. It sure feels like more than 2.3%.
As of yesterday afternoon, the Fed Funds Futures markets put a 95% implied probability on “no move” in June, approx. 90% in August, and approx. 80% in September.
jb
U.S. consumer prices increased 0.4% in April?
Do you believe this number? The gas price increased more than 10% in April.
#14 att: Real Estate in NJ ain’t hot nay more, thats sooooo 2005.
Here is the CPI release from the BLS (PDF)..
http://www.bls.gov/news.release/pdf/cpi.pdf
jb
Orion [30],
But those are temporary volatile prices. They don’t count. Funny though, the volatility has been with us for over a year. Seems to me that a smoothing average[3 or 6 months] would be a better indicator than ex food and energy.
Not to worry, between the prices of plasma screens and hedonics there is no core inflation. The only problem exists if you want to eat, drink milk, drive a car, turn on the heat/ac, go to a doctor, etc..
2.4% increase for energy? I don’t believe this number. The gas price only increased 7 cents from March. Do you believe it? In my memory, the gas price increased more than 30 cents.
Re: #34
JB….Your timeliness in obtaining data is amazing.
There is a big commerical advert in the NY Times Business Section this morning for an insurance outfit.
In one section they talk about renters insurance, and how that area was ignored etc.
They go on to talk about 31% of Americans rent, and how many of those renters were former home owners, who have valueables that need to be protected. I thought it was interesting.
Re: #35
BC Bob….With the cost of milk lately, wait until you see the price of a shake this summer.
An auction of nearly 100 foreclosed homes [in San Diego] Saturday showed that mortgage lenders are having to accept huge discounts in some cases to unload such properties. A surge of foreclosures over the past year or so has left lenders struggling to sell a growing backlog of homes. At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.
=======================
Ring ring ring….This is your wakeup call Buddy, go to work!
They don’t have to give that data away to anyone for free. If they make it available for public consumption, kudos.
I’m not saying that the MLS data should be given out for free. If all MLS systems were available for a fee, then there is a potential business opportunity to normalize the data across systems and offer the information for a fee.
There are several ways to get sellers to update property on a sale. Ask for a deposit amount which will be returned when the house is either sold or withdrawn from market.
Those that need guidance should be allowed to hire an agent of the MLS for others a flat fee structure should be just fine.
It’s like buying securities. You can buy them online through your brokerage account for $7 or pay commission to your broker for research and execution. Those who want to pay commission will pay those who don’t will do the research themselves.
Orion [39],
What about a White Russian?
Things are smoldering below the surface. Do NOT listen to any propaganda.
It’s bad out there and if you are a buyer with a good downpayment make sure you get the very very best deal you can.
“At least” at a min 25% off of 2004-2005 phoney prices
Bleed’em dry!
BOOOOOOOOOOOOYAAAAAAAAAAAAA
Bob
Re: #40
Heard from a friend of a friend of a friend in the RE auction business.. an upcoming auction of
70+ condos at the shore (can’t disclose location yet).
“Appraisers urged to set ethics aside.
As the housing industry slumps, these supposedly impartial judges of property values complain they’re being pressured by brokers and agents to manipulate their findings to ensure loans go through.”
“The mounting pressure on appraisers “is like cholesterol threatening the heart of the mortgage industry,” Atrium Real Estate Services’ Amorin says. “If we can’t act independently, it could undermine the whole economy. You have to have the courage to say no, but that’s easier said than done.”
http://realestate.msn.com/Buying/Article_mw.aspx?cp-documentid=4787329>1=10029
Re: #42
More like Soy Russian!
M-I-S-E-R-Y 2008……….
ANYONE THAT PAYS ANYWHERE NEAR ASKING IS A FRIGGEN UNIFORMED DOPE!
D-O-P-E
I did’nt pipe in on yesterdays FSBO thread, so here it goes.
I do not go after FSBO’s , I don’t pound the pavement for business, I work with clients that come to me, from referals, friends, internet, open house, and office time. After almost 5 years it is referals from prior clients or their repeat business that keeps me afloat.
I had one 2 experience’s with a FSBO, in 2003 client’s that I had been working with for a couple of months saw a fsbo and asked me to call on the details, and to ask for them to work with me, I did. The homeowner was a construction/investor had sold many fsbo’s but this home was empty and he agreed, dropped off the keys, I made up offer, made it clear to HO I was buyer’s agent only, offer accepted, took care of transaction until close.
Two years later 2005 owner called me to list another home he was selling. Sold.
Second experience was strange,(2004) again clients looking for home came across went to the open house, but still asked me to represent them on the buy. The were asking 315,000 I called owner they agreed to work with me, we came to agreement on 305,000. I went to owner’s home to have paperwork signed, explained again I was buyer’s agent, husband was freaking out but signed, I am driving home and they called and cancelled. Three days later listed with agency at $305,000 open house that weekend, monday morning their agent calls me, says I understand you had clients interested they will condsider their offer. Okay offer is now $300,000 obviously we were overpaying, they accept. Duh! The easy money was made by the other agent.
KL
PS: On overpaying for services, I feel morticians are way overpaid, and they extort people at their weakest moments, I have made it very clear to my family I want nothing but the cheapest.
MLS flat fee would work. First you would be required to get an assessment by a licensed home inspector. This inspection is only good for a limited period. The whole inspection must be made available to anyone interested in making a bid.
The home inspection would have a specification sheet which would be submitted to the MLS. There would be a section for homeowner to talk up their property with flowery language.
Simple, eh?
#43 Readmylips: Things are not smouldering beneath th surface any more, they have actually risen to the top.
Re: Appraisers
Reminds me of an episode last summer. I was bidding on a house and the sales agent was also an appraiser. The appraisal I was given had 5 comparable sales but, I knew for a FACT that 2 had not actually closed, 1 was still under contract and 1 was in another town. These were comps?! I was p*ssed. The property sold. I hope the buyers didn’t rely on that bogus appraisal.
Grim (17)-
Thanks. I’m sure virtually everyone here works in some sort of industry that values its intellectual property and work product. I’m also fairly certain that they would assiduously defend their industries’ proprietary right to same.
Except when it comes to RE, many here seem to feel entitled to anything and everything for free. I’m not talking about comps, property addresses and other basic sales info…but things like access to directly list in MLS systems and statistical analysis. There is an inherent risk and responsibility in being a market-maker for any kind of asset (hence, Grim’s reference to E & O insurance, which is ridiculously expensive for RE brokers). To assert that market-makers deserve nothing for that risk and effort is both economically-ignorant and greedy.
Aaron (49)-
Like mounting your own expedition to Mars.
#41:
“There are several ways to get sellers to update property on a sale. Ask for a deposit amount which will be returned when the house is either sold or withdrawn from market”
Actually the easiest would be a listing fee (say $100) and then a monthly renewal fee (maybe $20). Just enough to be annoying and get the lister to cancel when appropriate.
I too like the idea of an MLS which lists ALL houses for sale – either FSBO, discount or full service agency. It is the best way to really show whatever additional value the realtor brings to the table.
#48 – KL –
I’m involved in the death industry (and it is an industry). If you want value the best way to go is to write down your wishes in advance. DO NOT pre buy anything, that is a complete rip off and there are currently cases of people who have forked over a fortune to a mortuary and cemetary only to have them change hands, go out of business, or have spent money which was supposed to be kept in escrow.
You might want to look at memorial societies – they charge a $50 fee to join, but contract with local mortuaries for a basic funeral so they can offer very good rates and protect you or your family from getting pushed around.
Funerals.org is an excellent resourse (they are a non-profit umbrella for all the memorial societies nationwide) and list groups in this area.
OK – off of the depressing topic now.
Aaron #49,
I’ll buy that.
The End of The Realtor’s 6% (part 1)
Watch: http://www.paperdinero.com/BNN.aspx?id=183
60 Minute’s Lesley Stahl chronicles the NAR’s 600 “pound gorilla”, namely the fact that in the age of the internet, traditional Realtors and real estate agents services are akin to the buggy whip. Try as they might to justify the need for a Realtor, the times they are a changing for the real estate industry and NARs vicious grip will soon be broken. Ahh.. Technology!
Originally aired on: 5/13/2007 on 60 Minutes
Running Time: 13 minutes 17 seconds
“Actually the easiest would be a listing fee (say $100) and then a monthly renewal fee (maybe $20). Just enough to be annoying and get the lister to cancel when appropriate.”
That works too :)
I’m also fairly certain that they would assiduously defend their industries’ proprietary right to same
Sure. But there is a difference between asserting a right to your intellectual property and using your intellectual property to engage in anti-competitive business practices. No one says that Microsoft can’t assert property rights for its operating system, but it can’t use its operating system to push out competitor’s applications.
Except when it comes to RE, many here seem to feel entitled to anything and everything for free. I’m not talking about comps, property addresses and other basic sales info
I would be happy with this level of access and I would even be willing to pay a nominal fee for this access (to be refunded if I buy). An educated consumer would benefit you as well. I would come to you with a better idea of what I want, where I want it and how much I can expect to pay. Consumers would need less hand-holding. Of course, this quite frankly, makes it more difficult to justify 6%. But, I actually think this would be good for the industry. Get rid of the dregs and keep the true professionals. Leverage better access to information and an educated consumer to spend less time per transaction and complete more transactions. I think you could still make a good living in RE.
…but things like access to directly list in MLS systems and statistical analysis.
The problem is that the MLS basically has monopoly status. There realty is no other game in town. If you’re not in the MLS, you are blacklisted. It’s an anti-trust issue. Either business practices must change to allow for better competition from other systems or more direct access to the MLS should be afforded to consumers.
I wouldn’t be surprised to see the courts eventually break up or force changes to the MLS.
First, let me say that I’ve spent a tremendous amount of time (and a fair amount of money) on trying to develop an open-listings system. I’m sure some of you remember me talking about it before. I’ll try to sum up the business and legal issues that I’m currently facing in another post (too much to post here).
jb
Not to mention that I have doubts that it can really ever be a self-sustaining business, especially since it would need to compete with the two major national services FSBO.com and ForSaleByOwner.com. Both of which offer the same service (and in some cases offer Flat-Fee MLS listing, etc).
jb
I would think that a truly good realtor would have very little to fear from an open MLS. Poor ones live off of their access to information. Good ones still have plenty to offer:
Better language and photography on the listing (think what professional resume writers make).
Home staging.
Additional marketing.
Background help and info on titles, insurance, inspections and the like.
Assistance negotiating.
And plenty of other hand holding excercises.
For every person that is willing to do all of the work themselves there are plenty of others who actually want help and assistance.
… as well competing against the RE agencies in NJ that would be glad to list the property on the MLS for a flat-fee.
I’m surprised nobody has really mentioned that option.
jb
JB – true open source can only work if it includes ALL listings, and that means realtor controlled too. The system is already very developed and opening it up would probably have to be by legislative, anti trust means. The realtors have it all locked up unless enough consumers cause enough of a stink.
The bubbles that built America
The cycle of over-the-top hype, vicious competition, bankruptcies and consolidation that characterized the late-90s dot-com boom and this decade’s real estate market could be the key to America’s economic success.
By Daniel Gross
NEW YORK (CNNMoney.com) — Here’s a question you might ponder as you Google, on your wi-fi-enabled laptop, for a YouTube video. Without the debacles of Global Crossing, Worldcom, Webvan, Etoys, and a hundred other dot.com flame-outs, would there be a Google today? Or wi-fi? Or YouTube?
The answer, historically speaking, is: probably not.
And therein lies a contrary tale of why investment bubbles – far from being lamentable outbreaks of reckless investor behavior – have been a net positive for the American economy. Indeed,
…
The cycle, which returned with a vengeance with the Internet in the 1990s, is still going strong. With the aid of Federal Reserve Chairman Greenspan, the U.S. economy cycled from the dot-com bubble almost directly into a real estate bubble. And many of the same Silicon Valley folks who brought us the fiber-optic and dot-com bubble of the 1990s have returned for an encore.
…
JB – the issue isn’t listing on the MLS. It is who has access to it. Unless Joe Public can see standardised information on all listings and can effectively shop by themselves and choose to use a realtor for the finicky stuff (or not), all other discussions are pointless.
Unless Joe Public can see standardized information on all listings and can effectively shop by themselves and choose to use a realtor
I would even agree to go through the realtor if that’s the way the seller wants to do it. I would just rather do the research myself. I just want this level of service reflected in the price of the transaction.
This is the problem with the current system. It’s like going to a restaurant. I just want coffee and a roll, but I get changed for lobster no matter what I want. Since this is the only restaurant in town, I have no choice but to pay for the lobster if I want to eat dinner.
I think another reason people feel realtors are over paid is because many feel they can’t be trusted. You can’t blame people for feeling that when David Lereah, the grand poobah of all realtors, keeps telling people it’s a great time to buy no matter what is going on. Let’s face it, he represents (represented) the industry.
Then you have realtors who just parrot useless sales pitches, like, “this town is insulated from the downturn.” (just heard that one last week)
Another realtor, at an open house last week told me that a similar house next door sold for 150,000 more than the one we were at about 9 months ago. When I said that the guy must feel bad about it, she said, “Oh no, he’s so happy.” That makes no sense.
When I first moved to NJ last summer, I was with a realtor who was recommended to me by a friend (she was her personal friend). I looked at one house priced in the 700’s. She never said to me that she thought it was overpriced. It turns out that the house eventually sold for more than 100,000 off that price. My conclusion was that either a) the realtor knew it was overpriced but didn’t want to tell me or b) didn’t know it was overpriced. Either way, she’s either dishonest or dumb – why work with her-What was her value added to me?
Maybe that’s the problem. The value added seems to be only for the sellers, not buyers.
On comparisions to doctors – if all doctors said that it was always a good time for heart surgery, of course, people would start to question their value. If you found out your doctor was being paid to push certain drugs or procedures, wouldn’t you lose faith?
MLS is just a dumb idea folks. Soccer will never take off in this country…oh, wait a minute – you mean THAT MLS? Not Major League Soccer? Sorry, my bad :)
RentinginNJ –
The model would really require a change of payment system – the seller pays for their agent, the buyer pays for theirs. That way each side can choose which way they want to go and the agent is effectively hired by the person that they represent. I’m not a fan of the commission structure, but if it remained, the buyers agent could still be paid by having the percentage added on to the mortgage from the buyers side if they didn’t have the cash. More realistic would be for sellers agents to be commissioned and buyers agents to be fee for service.
Another point that seems surprisingly absent here is that commissions are negotiable.
jb
Clot –
You mentioned previously that you don’t think that your industry should be required to share intellectual or proprietary property.
What part of the current MLS system would you deem to be intellectual propery?
James Bednar Says:
May 15th, 2007 at 11:20 am
Another point that seems surprisingly absent here is that commissions are negotiable.
Negotiable for the seller, not the buyer.
Negotiable for the seller, not the buyer.
Really? Because I’ve got the authority to cut the commission on the buy-side when I present an offer.
jb
What a difference a year makes.
Look below (I cut out the exact street name):
Address: 16 xyz WAY , , , Kendallpark, NJ 08824
Date Sold: November 04, 2006
Date Officially Recorded: April 13, 2007
Sale Price: $ 570,000.00
Address: 17 xyz WAY , , , Kendallpark, NJ 08824
Date Sold: January 09, 2006
Date Officially Recorded: February 23, 2006
Sale Price: $ 672,000.00
This year they are going for low 500s.
More to slide downwards… buyers beware!
(courtesy: NJ.com)
I stand corrected then, although I would guess that few buyers know that – they don’t even realize that they are the ones paying the full commission as it is tied to the sales price.
I used the 2% Foxtons (then still YHD) back in 2002 and it was a complete mess. The ‘realtor’ was a retard. Unfortunatley, with the amount of volume in RE, I think a lot of those morons started to make their way into the more reputable RE companies. When you get a good realtor (the one I work with worked in Wall Street for years), they are worth the price.
Is there still a rule/law in place that prohibits a realtor from becoming a broker unless they work full time for a broker for a given amount of time?
Agent must be licensed and continually employed, on a full-time basis, for 3 years to be eligible to become a broker. At that point the agent must take an additional 150hrs of education as well as pass the broker exam.
jb
eighty posts and no one seems to really take note of the monumental development that is described in the articles that headline this thread
– mortgage originators get candy taken away from them
grim: you left out this passage
“Mortgage lenders say they are tightening standards in response to pressure from mortgage insurers, investment banks and investors who buy mortgage-backed securities. Spooked by rising delinquencies, Wall Street is now pushing lenders to beef up their underwriting. “We’re not dictating this, the market conditions are dictating it,” says Donald Henig, president of American Home’s wholesale division.”
People – this development is HUGE
– LOD, you can stop the primitive tribal rain dance – the rain is here – BLEEDING EDGE
!!!!!!!!!!!!!!!!!!!!!!!!!
*************************
!!!!!!!!!!!!!!!!!!!!!!!!!
“We’re not dictating this, the market conditions are dictating it,”
Chi,
The market giveth/taketh. One door shuts, another opens.
http://en.wikipedia.org/wiki/The_Rain_Song
Clotpoll(53), I FSBO’d my house in Monmouth county, had it sold in a week (2004). I think I spend 200$ for an ad in the paper. I priced the house $10,000 under market, which I got back after it was bid up.
Yes, the market was hot at the time, but let market forces work. If someone tries FSBO and it doesn’t work out, then hire a Realtor.
You equating it to building the space shuttle is ludicrous.. the space shuttle can blow up.. worst for FSBO is to loose a little time and money.
The market giveth/taketh. One door shuts, another opens
BC
Great line to go with this article
http://money.cnn.com/2007/05/13/news/economy/bubbles_gross/?postversion=2007051509
KL
#80,
As a card-carrying member of the LOD, I’m feeling a little optimistic today.
BC
I just got/replied to your email – you somehow ended up in my spam box?
KL
(Please note NAR’s new Chief Economist is quoted in this story)
Home sales pace off in 33 states: realtors
WASHINGTON (Reuters) – The homes sales pace slid in 33 states in the first three months of 2007 while the metro regions with a price increase outnumbered those with a decline in a sign of broad stabilization in the housing market, a leading real estate trade group said on Tuesday.
While the data from the National Association of Realtors was mixed, it was seen as an overall positive for the battered housing sector.
“Conditions changed fairly rapidly during the boom, but we need more patience now to see a slow, gradual recovery, which should start in the second half of this year,” said Lawrence Yun, NAR’s chief economist.
The Dow Jones home-building index, which had been trading in negative territory, turned slightly positive, up 0.2 percent after the report’s release.
More at:
http://www.reuters.com/article/domesticNews/idUSN0838048620070515
CNBC Question of the Day…
Is there too much debt driving the economy and financial markets at this time?
Aaron (82)-
Got any feeling for how much money you left on the table?
Beware those foreclosure auctions…!
Bank Sells House Complete With Owner’s Corpse
MADRID (Reuters) – A Spanish bank repossessed a house and put it up for auction complete with the mummified body of the former owner who had missed her mortgage payments, newspaper El Pais reported on Wednesday.
The corpse, preserved by salty air in the seaside town of Roses after an apparent death by natural causes, was discovered by Jorge Giro, who entered the house for the first time on Saturday after buying it at the auction, El Pais said.
More at: http://www.reuters.com/article/oddlyEnoughNews/idUSL1535595820070515
Clotpoll Says:
May 15th, 2007 at 12:29 pm
Aaron (82)- Got any feeling for how much money you left on the table?
clot: shhhhhhhhhhhhhhhh ignorance is bliss
rhymingrealtor Says:
May 15th, 2007 at 12:25 pm
BC I just got/replied to your email – you somehow ended up in my spam box? KL
bost: KL – seems ok to me
sorry – I meant KL
Bost: I give you Luis Polonia night at Yankee Stadium, and you give me SILENCE :(
First Quarter Metro Home Prices are out.. From the NAR:
Median Sales Price of Existing Single-Family Homes for Metropolitan Areas (PDF)
Here’s an alternative model:
Require homes going up for sale to formally file with the town planning board or the state listing the basic information of the sale, price, address, stats and any problems (errors and ommissions could be insured at the seller level). That way the information goes into the public domain. Price changes could be filed, but the start date not reset.
Realtors could compile the information and add to it with their own stuff in order to maintain a competitive edge. Any enterprising entrepreneur could compile the information and use it to set up different listing sites online (and make money charging access – like the big forclosure sites do). Individuals could just go to their own planning board if they want to do the legwork themselves.
The biggest complaint seems to be that realtors hold as proprietary pretty basic information – where the house is and what its actual details are. Putting that information into the public domain would remove that objection and level the playing field so that any added value that realtors bring to the table is easily tabulated and verifiable.
From MarketWatch:
Housing bust holds down core inflation in April
A growing glut of housing on the market helped moderate U.S. consumer price increases in April, raising hopes that the Federal Reserve can declare victory over inflation.
The consumer price index increased a smaller-than-expected 0.4% in April, boosted by higher prices for energy and groceries, the Labor Department reported Tuesday.
Excluding food and energy, however, the core consumer price index rose 0.2% as expected, knocking the annual gain in the core down to a one-year low of 2.3%.
Rents and owners’ equivalent rents, the biggest factors in the CPI, increased at the slowest pace in more than a year, reflecting a flood of vacant units in the rental market.
clot,
What do you think of this scenerio.
Joe Public wants to sell a home, he goes to a realtor and after a realtor reviews the house they provide offer to list a house for xxx and a commision of 6%. You tell them that you will think about and let them know. You call them and say NO thanks.
now you have a solid understanding of comps in the area, a suggested listing price from a “proffessional” and you go and sell the home by yourself. You put an add in the local paper and a sign in th efront lawn sell the home in a week for a full listing price(2003-2005 only).
If he had used a realtor he would have lost $30,000.
Buried in section C of the WSJ
Really interesting this distinction that was not entirely apparent to me. If you are conisdering these investments, you should note the distinction in the risk profile. The ETN’s are debt securities of Barclays, not a stand alone investment trust. Big deal as you are introducing the credit risk of Barcalys to the investment.
Disclaimer: This information should not be considered a solicitation to buy or sell such securities. You should perform your own independent research, and you cannot rely on this information for investment decisions.
Move Over ETFs, as ETNs Hit the Scene
Barclays’s Currency Notes Join Funds From Rydex;
Weighing the Best Move
By JOHN SPENCE
May 15, 2007; Page C17
Just when it seemed the ETF market couldn’t get any more confusing, along come exchange-traded notes.
[edit]
Now, there is a new kid on the block in the form of exchange-traded notes, or ETNs, which are managed by Barclays Bank PLC, a unit of London financial-services giant Barclays PLC. Another unit, Barclays Global Investors of San Francisco, is the largest provider of ETFs.
Barclays Bank last week listed three new currency ETNs on the New York Stock Exchange designed to provide exposure to the movement of the euro, British pound and Japanese yen, relative to the dollar. The trio is comprised of iPath EUR/USD Exchange Rate ETN, iPath GBP/USD Exchange Rate ETN and iPath JPY/USD Exchange Rate ETN.
[edit]
Currency speculation is notoriously dicey. But for long-term investors looking for foreign-currency exposure or a hedge against their assets denominated in dollars, a natural question is which is better: ETFs or ETNs?
The products that Barclays and Rydex offer are designed to capture currency moves plus the yield of the underlying market, based on overnight deposit rates minus a fraction of a percentage point. But they achieve this goal in different ways.
With ETNs, investors are essentially getting a promise from Barclays to pay the index return plus any accrued interest. This is a different setup than ETFs, where investors buy a piece of a portfolio. The structure of the ETN shifts the risk of index-tracking error to Barclays, but investors are taking on credit risk that Barclays will be solvent when they want to sell shares.
“With ETNs, the investor is taking credit risk to the issuer,” said Philippe El-Asmar, Americas head of investor solutions at Barclays Capital. “Barclays is committing to giving you the return of the index in question.”
Like the Barclays ETNs, the CurrencyShares ETFs have expense ratios of 0.4%. These products, which are listed on the Big Board, are structured differently than most “true” ETFs because they aren’t registered investment companies, but rather grantor trusts. They hold their currencies, for example euros, in interest-bearing accounts maintained by J.P Morgan Chase Bank in London.
Like the ETNs, the Rydex CurrencyShares gain in value when the foreign currency rises versus the dollar.
There are also subtle tax issues that arise due to the differences between ETFs and ETNs. The Rydex CurrencyShares pay out interest income on a monthly basis, which is taxed as ordinary income. Meanwhile, any short-term or long-term gains in the ETF due to currency moves are taxed at the ordinary rate up to 35%, according to Rydex.
On the other hand, the Barclays ETNs are senior, unsubordinated, unsecured debt securities that don’t make periodic income distributions. Instead, investors are taxed once at the end on gains and interest when they sell shares, or when the securities mature after 30 years.
MARKETWATCH: Housing bust holds down core inflation in April
Consumer price index up 0.4% as gas prices jump
WASHINGTON (MarketWatch) — A growing glut of housing on the market helped moderate U.S. consumer price increases in April, raising hopes that the Federal Reserve can declare victory over inflation.
More at: http://www.marketwatch.com/news/story/housing-bust-holds-down-core/story.aspx?guid=%7BF7A5B6F3-728E-4CEE-B75B-95F6FCC9FDB5%7D
First Quarter – NJMLS Bergen County Median Price
SFH, Condo, Co-op, Townhouse
1999 $215,000
2000 $248,500 +15.6
2001 $261,000 +5%
2002 $290,000 +11.1
2003 $335,000 +15.5
2004 $370,000 +10.4
2005 $427,500 +15.5
2006 $475,000 +11.1
2006 $450,000 -5.3%
What do you think of this scenerio.
It’s entirely nonsensical, especially since most agents will be glad to give you a CMA with no strings attached.
Bad karma too.
jb
lisoosh (72)-
Actually, not much. I have no problem with complete access (even flat-fee, discount and menu-priced companies are fine with me), but I DO have a problem with unlicensed individuals participating on an ad hoc basis. If you want to sell your home on your own, great. There are plenty of high-traffic websites out there to give your house plenty of exposure. By going FSBO, you are declaring that you choose not to be part of an organized marketplace; therefore, you shouldn’t be able to demand cheap or free access to it.
Any market-maker’s decision to impose certain membership minimums and requirements is NOT anticompetitive behavior, and it is NOT a boycott of the competition. You don’t see private individuals running around the trading floor at the NYSE, NMX or ICE…why should individual, unlicensed homeowners be allowed active participation in an MLS?
The fight here has been misconstrued by many. There seems to be a feeling that access to information will magically transform the lay person into a RE wizard. The fact of the matter is, RE information is ubiquitious…and therefore, worthless. If one Realtor or company withholds info, go to another one. Pretty soon, you’ll have found somebody who’ll give you everything you want. It’s what you DO with that information that matters.
Is there an attorney here who works in anti-trust? I’d love to hear a legal opinion on the constant bleat that RE is a cartel. It’s a provocative statement, but no one here has produced one ounce of evidence supporting either the price-fixing argument or the boycott-of-competition argument that provide the basis for anti-trust actions.
The other oft-repeated assertion here, along the lines of “I’d be willing to pay a nominal fixed fee for MLS access/info” is just plain laughable. Guess what? Nobody will accept your offer of this little payment, because the MARKET has decided that it’s worth more. Unless you truly believe that we somehow force the public to work with us (despite the plethora of alternative selling platforms now available), it must be acknowledged that the public’s willingness or unwillingness to hire Realtors determines our fee. If mass public dissatisfaction with our fee structure were to occur, you’d see fees drop in a nanosecond. As it is, the last ten years have seen a significant downward trend in commissions paid to agents. That, in and of itself, is evidence of a free marketplace at work.
Not every market is tanking…..
*****************
Sales still soar: Greenwich isn’t suffering from a real estate slump
By Susan Nova
Special Correspondent, Greenwich Time
Published May 11 2007
Defying the force that’s weighing heavily on the real estate market in other parts of the country, sales of single-family homes and condominiums gained ground in Greenwich in the first three months of the year.
Sales of houses moved up 10.9 percent to 173, from 156 a year earlier and 166 in 2005. Five price categories out of nine showed increases in the number of sales, and two remained stable, according to searchgreenwich.net, an Internet tracking service that monitors all sales in town.
Seven houses were sold in the $600,000 to $750,000 range this year, compared with two a year ago. Sales of $1 million to $1.5 million numbered 27 this year, up from 23 a year earlier. From $1.5 million to $2 million, sales were 29, up from 23. For $2 million to $3 million, 34 sales were completed, up from 27 the year before. From $4 million to $5 million, sales climbed to 14, from 11.
Sales were identical in the $400,000 to $600,000 range, with three sales in both years. Sales that topped $5 million numbered 22 each year. But sales of $750,000 to $1 million and $3 million to $4 million declined.
http://tinyurl.com/yrt6n6
Bost: I give you Luis Polonia night at Yankee Stadium, and you give me SILENCE :(
Chi,
I’m missing something? Maybe, my glove.
JB: Can you tell me if this njmls listing went UC 2701382? Thanks.
make money (97)-
Why are you assuming the value of a home is fixed before it is prepared for sale or marketed? And why do you assume that different marketing approaches all reach the same potential buyer pool…OR that all potential buyers would willingly pay the same price for a home?
If homes were a fungible commodity, and the value of a home could be determined precisely at any given moment, the RE industry would die immediately.
How’s that apartment building coming?
I think the Greenwich story provides an interesting contrast to the main post on credit tightening. The markets that are flooded with no down payment buyers and IO loans are getting hammered (e.g., Vegas and Miami), whereas places like Greenwich, where many more people likely come to the table with substantial amounts of cash, seem relatively unfazed.
If anyone wants MLS information, just ask. I get at least 20 requests a day for details on specific listings, and that doesn’t include the public inquiries. By all means don’t be shy, and email me if you don’t want the details posted publically.
I’ve done my part in trying to make this information accessible to NJ residents. So while this system isn’t going to change overnight, so until then, I’ll continue to offer an alternative that I feel is just as useful, at no cost.
jb
JB
Further to your post of 108 – if you were’nt so dang fast – I myself would reply and provide information requested as I have on occasion when your slacking and,as I do for my clients, and also for you when needed. Now that your one of us -you know were not so bad.
KL
Clot : I’m not actually anti-realtor. I just think that while I am willing to buy that a good real estate agent brings added value, it is very hard to quantify exactly where and how much because of the system that is currently in place.
“There seems to be a feeling that access to information will magically transform the lay person into a RE wizard. The fact of the matter is, RE information is ubiquitious…and therefore, worthless.”
I don’t think this is true. I think most people just feel that they don’t have enough information to make a full and qualified decision in whether to use a realtor and when. Nor is RE info as ubiquitous to the layman as you seem to think. Sure I could go to an office and ask for everything they have, but if I don’t buy within a short time frame, the realtor pretty soon loses interest, and understandably so. Dragging around to multiple offices just to keep up to date in the long term is extremely time consuming and tiring. It seems that the majority of desenters here would be happy having access to a full listing of houses for sale in their desired neighbourhood and would be fine going through a realtor if and when they find something that really interests them.
“The other oft-repeated assertion here, along the lines of “I’d be willing to pay a nominal fixed fee for MLS access/info” is just plain laughable. Guess what? Nobody will accept your offer of this little payment, because the MARKET has decided that it’s worth more.”
I disagree with this too – it has never been put to the test of the market. In addition, the popularity of sites such as Realtor.com shows a huge market for easily accessible and free information on houses for sale.
And, as always, I’ll provide ML info AND even give free advice to anyone who contacts me thru Grim. And, no, I still will not do a transaction or accept compensation from anyone I meet on this board.
James Bednar Says:
May 15th, 2007 at 10:41 am
… as well competing against the RE agencies in NJ that would be glad to list the property on the MLS for a flat-fee.
I’m surprised nobody has really mentioned that option.
jb
Actually, I alluded it to it in my post last night – has anyone heard of this:
http://www.iggyshouse.com
JB – its a good offer – and one which demonstrates the limits of the system as you don’t have access to other MLS listings, such as Middlesex.
I live on the Somerset/Middlesex border and have found in the past what a complete pain in the a$$ it is to be dealing with 2 different systems.
The whole thing is a mess.
From Bloomberg:
U.S. Homebuilder Sentiment Index Falls to 8-Month Low
Confidence among U.S. homebuilders this month unexpectedly fell to the lowest in eight months as a wave of mortgage defaults sapped the housing market.
The National Association of Home Builders/Wells Fargo index of sentiment fell to 30 this month from 33 in April, the Washington-based association said today. The reading matched the figure for last September, which was the lowest since February 1991. Readings below 50 means most respondents view conditions as poor.
Developers including Beazer Homes USA Inc. say they see few signs of an end to the housing slump that helped reduce the pace of economic growth to the slowest in more than four years last quarter. Subprime mortgage defaults are further increasing the inventory of unsold homes and prompting banks to tighten lending standards.
“The decline in homebuilder sentiment is largely due to fears of subprime mortgage fallout,” said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York. “We could see a decline in demand going forward.”
Economists had forecast the sentiment index would be unchanged at 33, according to the median of 37 estimates in a Bloomberg News survey. Forecasts ranged from 31 to 35.
From Reuters:
Home builder sentiment sinks to 15-year low
Homebuilder confidence sank to a 15-year low in May as lenders made it more difficult for borrowers to qualify for mortgages and order cancellations mounted, the National Association of Home Builders said on Tuesday.
The NAHB/Wells Fargo Housing Market index dropped three points to 30 in May, matching the 15-year low set in September 2006, the group said.
Economists polled by Reuters had forecast the index would stay at April’s 33 reading. The index stood at 46 last May.
From the NAHB:
Builder Confidence Slips Again In May
Ongoing concerns about subprime-related problems in the mortgage market caused builder confidence about the state of housing demand to decline three more points in May, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. With a current reading of 30, the HMI has now returned to the lowest level in its current cycle, which was previously hit in September of 2006.
“Builders are feeling the impacts of tighter lending standards on current home sales as well as cancellations, and they are bracing for continued challenges ahead,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif.
“The crisis in the subprime sector has infected other parts of the mortgage market as well as consumer psychology, and as a result the housing outlook has deteriorated,” added NAHB Chief Economist David Seiders. “We’re now projecting that home sales and housing production will not begin improving until late this year, and we’re expecting the early stages of the subsequent recovery to be quite sluggish. There still are tremendous uncertainties regarding our baseline forecast going forward, owing largely to the subprime crisis that is having widespread effects throughout the mortgage market.”
…
All three component indexes declined in May. The index gauging current single-family sales slipped two points to 31, while the index gauging sales expectations for the next six months fell three points to 41 and the index gauging traffic of prospective buyers fell four points to 23.
Three out of four regions posted declines in the May HMI. The Northeast posted a six-point decline to 32, while the South posted a four-point decline to 33 and the West posted a three-point decline to 32. The Midwest eked out a one-point gain, to 23.
JB or Rhy: please see post 105, thanks
Anyone:
Does anyone know of a good way to test air quality in a home or surface dust. I can google stuff, but I would rather use something that has been vetted by someone else. If you know someone who performs such work, I would also be interested in site inspection. Must come to Hoboken.
any info at all is appreciated
As a buyer, I’ve found it difficult to negotiate with a listing agent. They always have to have their listing client in mind and get the best for them, even though they would get a 6% commission that way.
On the other hand, I’ve found that agents try to push you beyond your budget. I’ve only ever found on agent that wasn’t pushy about getting me to buy or upping my bid, but the problem with that agent is they are soft. I can’t get the agent to go in and tell the seller’s agent, “Listen, there are no other bids even close to this on on the property. Its a soft market and it would probably be wortwhile to convince your sellers that this is a good offer and they should take it.”
Sometimes I really wish it could simply be a transaction between buyer and seller so we could really sit down and figure out bottom line what each of us was looking for, and if we couldn’t reach a quick agreement nobody’s time would be wasted. Instead its “I called him, he said X, I call him back with what I think it was you told me and he says Y…” … ad absurdum.
Require homes going up for sale to formally file with the town planning board or the state listing the basic information of the sale, price, address, stats and any problems (errors and ommissions could be insured at the seller level). That way the information goes into the public domain. Price changes could be filed, but the start date not reset.
Fun to play counterpoint, so I’ll keep going with it.
Why would sellers knowingly put themselves at a disadvantage with this type of system?
A system that displayed the price reduction history of a listing might be viewed as being skewed towards the buyer. In a FSBO situation, why would a seller chose to list on a system that did this? As a buyer, you might like to know this information, as it gives you bargaining power. As a seller, however, you might not want this information to be public.
No realtors or agents involved here..
Which side gets his/her way?
jb
And realize that if you skew the system towards buyer, sellers will simply choose not to list there. What good is a listings database without listings?
jb
A question;
i am working with an agent affiliated with a national chain takes takes listings. the agent says she’s my buyers agent. since, legally, the seller pays the commission, who is she working for? For example, is she even allowed to give me an opinion that the house is overpriced for whatever reason? Also, if I put in a low bid, but tell her that I’m willing to go higher, is she obligated to tell the seller’s agent?
It may seem like a simple question, but I was never clear on it.
From Bloomberg:
U.S. Median Home Price Tumbles to 2-Year Low in Slump
U.S. home prices tumbled to a two-year low in the first quarter, with declines in almost half of U.S. cities, the National Association of Realtors said.
The median price for houses and condominiums slid 1.8 percent to $212,300 in the first three months of this year, the lowest since the first quarter of 2005 when it was $199,700, the Chicago- based real estate trade group said. The median price for a single- family home fell in 62 of 145 metropolitan areas.
Tumbling prices sparked an increase in sales as bargain shoppers snapped up the cheaper properties. Seasonally adjusted, home sales rose 2.4 percent to an annualized 6.41 million from 6.26 million in the fourth quarter, the association said. Compared with a year earlier, the number of sales fell 6.6 percent.
…
The first quarter’s sales will probably be the highest of the year, the realtors said. Purchases of previously owned homes likely will fall 3.5 percent in the second quarter to an annualized pace of 6.19 million, increasing to 6.34 million by the end of 2007, the group said in a May 8 forecast.
Median prices probably will slide in the second and third quarters and be flat in the final three months of the year, the realtors said. Prices will begin to rise in 2008, though at less than a percentage point every quarter, the group forecast.
(cont)
The median price for a single-family house in the metropolitan area surrounding New York City grew 1 percent to $463,700. That area includes New York suburbs north of the city as well as northern New Jersey and parts of Long Island.
New York’s Nassau and Suffolk counties gained 0.8 percent to $479,800. Prices in an area of New Jersey that includes Newark and Union rose 4.5 percent to a median of $423,700. Prices in Edison, New Jersey, dropped 3.4 percent to $363,500, the realtors said.
Clotpoll(88) i sincerely doubt it would have been the 6% I would have pissed away on a Realtor.
Like i said initially, let market forces work. Why can’t an individual post a legitimate MLS on their house? If i get a little less it’s my choice!
As others have pointed out Realtors would be forced to work harder for business and offer more than what an individual could do.
since, legally, the seller pays the commission, who is she working for? For example, is she even allowed to give me an opinion that the house is overpriced for whatever reason?
She works for you, she is your agent and your fiduciary. As a fiduciary that individual should be looking out for your best interests.
However, in reality, because your agent is compensated only upon completion of a sale, that individual will obviously try their hardest to “sell” you. Let’s not be naive here.
Your agent does not need to be compensated by the seller. You are free to work out whatever compensation methodology you see fit. However, realize three things. Most brokerages aren’t going to want to entertain alternate methods of compensation, so you’ll need to seek out one that will. Secondly, UNDER NO CIRCUMSTANCES can the agent be compensated by both parties. Lastly, realize that you can’t compensate an agent directly, commission must be paid to an agent by their broker.
jb
Grim (121)-
There you go again…being practical.
JB: Can you tell me if this njmls listing went UC 2701382? Thanks.
Sure, just give me a little bit because I can’t access NJMLS from where I am.
jb
>>Maybe that’s the problem. The value added seems to be only for the sellers, not buyers.
a ‘buyers agent’ doesn’t work for you. they work for their employer. the only person that has your best interests is your attorney, end of story. don’t be fooled by someone showing you properties. take everything they say as just another slanted opinion.
Aaron (126)-
Let’s go at this another way. You(admittedly) underpriced your home by 10K, then the market corrected the underpricing by bidding it up to what you believed to be market value.
Now, let’s assume that your buyer pool consisted of the following:
1. Buyers attempting to do the same thing as you: avoid Realtors, and pocket the potential commission amount in the form of a discount. Or,
2. Morons.
So, was your buyer someone who realized that- even bid up over your initial asking- your house was still underpriced relative to the market…or was your buyer just oblivious to everything, excpet for the fact he really wanted to buy your house?
It’s been my experience that only the sharpest, best-informed buyers look to purchase FSBOs. And, they generally only offer on homes that can be taken down at a significant discount to market value. If a FSBO is priced to market (in a market of MLS-listed homes that have a potential agent commission “built in”), no intelligent, frugal buyer is going to pay the seller a 5-6% premium for doing absolutely nothing.
From Bloomberg:
Ohio Attorney General Targets Wall Street for Lending
Ohio Attorney General Marc Dann, likening the subprime lending industry to armed robbers, said he wants to sue securities firms because their bond sales enabled consumers to get mortgages they couldn’t afford.
Ohio has already won the right through a lawsuit to review foreclosures by New Century Financial Corp., the bankrupt Irvine, California-based lender. Dann may add investment banks and credit-rating firms to the case or bring new suits, perhaps using Ohio’s civil version of the federal Racketeer Influenced and Corrupt Organizations Act, he said in an interview today. The RICO law is used to target organized crime and drug rings.
“If somebody was buying guns and giving them to people to go and take people’s houses at gunpoint in Ohio, we’d be prosecuting them and throwing them in jail,” Dann said.
…
Securities firms encouraged “irrational loans” to be made by providing a liquid market for them, in which mortgages were bundled together by the thousands and sold as securities, Dann said.
“I want to see the emails, I want to see the documents,” he said. “I’m guessing somebody at some or all of these places was predicting the bottom was going to fall out.”
The state may seek damages from mortgage companies and investment banks even for “purely criminal” situations in which borrowers committed frauds against lenders, Dann said. He cited the harm such schemes did to communities that could have been prevented if lenders had been more cautious.
I don’t know why more people don’t do FSBO…
I bought a condo down the shore. I signed Oct04/closed early feb05.
When I decided to sell back in Jan, I went online to check what was sold in the past year. I then looked to see what people were selling their condos for online. I also looked at their comps. I then estimated what increases were since Feb 06 (not much)would have been and what I would be happy with.
I priced it slightly higher than what I was expecting since everyone likes to negotiate a little. I put it in the paper early Jan…I closed early March.
Although many realtors called to “help” me sell it, I am so glad I did it myself and recommend everyone to at least try it before listing with someone.
clotpoll, for the last time it was/is my choice.
We could sit here and argue weather I got a good deal or not, but with the process I proposed there would be a huge amount of seller interest in FSBOs.
Right now FSBO are competing in a cooked market. WHY????
10Y is surprising.
jb
Just about a 1m high on the yield.
jb
JB – happy to play as this is an interesting intellectual excercise:
“Fun to play counterpoint, so I’ll keep going with it.
Why would sellers knowingly put themselves at a disadvantage with this type of system?
A system that displayed the price reduction history of a listing might be viewed as being skewed towards the buyer. In a FSBO situation, why would a seller chose to list on a system that did this? As a buyer, you might like to know this information, as it gives you bargaining power. As a seller, however, you might not want this information to be public.
No realtors or agents involved here..
Which side gets his/her way?
jb”
The point is it wouldn’t be optional. You have to file a request to make changes to a property. Foreclosures are filed. You have to register a birth or death. You have to get a license for a car. House tax details are in the public domain, sale details are in the public domain. Why not have a legal filing of intent to sell a house and a legal filing of the details of that house for sale, standard disclosure form, $50 fee? It wouldn’t need to be a national system – the point would be to put basic information into the public domain. If someone wanted to corral that information to make access easier and charge for it (realtors even) why not?
The fact that there has been a price reduction doesn’t necessarily mean that the buyer has an advantage – the seller is quite capable of saying no to an offer he or she doesn’t like.
Nor have I included or precluded the use of agents. Whether or not someone wants to hire an agent to help them with the sale of their house is up to them, and I have listed previously reasons why they might want to do so – increased marketing, staging, pricing strategy, help with negotiating. On the buyers side they might want help with negotiating or ensuring all due diligence or assistance getting to know a new area.
I’ve said it before – I’m trying to suggest models which would do what the vast majority of people say they want – access to basic information and the ability to make an educated choice regarding the use of a realtor.
2701382 Under contract. 5/14 84 elm ave
KL
#131
It’s been my experience that only the sharpest, best-informed buyers look to purchase FSBOs.
Well I know this is true because I fit into that category. And yes, being so sharp, I have a very specific formula I use to come up with what I deem as a Fair Market Value for a home and that informs my initial bid price.
So many friends and family know I am in the market for a home now that once a month I am asked to look at a house that “so-and-so” wants to sell to me before it goes on the market. Everyone thinks we can do a deal and they don’t have to use an agent and they intend to pocket the full commission.
Inevitably, the asking price is the same as asking prices of comparable homes in the neighborhood. Why people think I would pay today’s asking prices, let alone pay them as FSBOs the commission, is beyond me.
But I don’t think the FSBO route is compelling to debate from a buyers perspective. Its the sellers perspective that intrigues me. I can’t imagine many circumstances under which I would list my home for sale with an agent. (Maybe if I had to relocate and time didn’t permit me to go FSBO, I would. Or possibly if I won the lotto and really didn’t care about the 6% commission.)
Because I am such a genius, I would put together a marketing package as good as, if not substantially better than most realtors I might hire. Photos would be sharp, rooms would be uncluttered, descriptions would be cogent without being cliche.
I would use a flat fee service to get my home on the local MLS as well as post on local neighborhood message boards, craiglist, etc. Word would spread via family and friends. I accept that I can never match the ready-and-waiting client list that a Realtor brings to the table but I believe I will get in front of much of the buyers market.
I will price according to recent comps (of sold homes, not asking prices of currently listed homes) to determine asking price and I will be willing to sell 5% less than those comps. If I am able to close a deal at even 5% less than the comps, I walk away confident that I saved at least 1% on the sales price by not paying a commission. The buyer can feel they only had to bake in a 1% commission on the purchase rather than 6%.
This would be my approach given today’s market. I would reconsider this approach in a market circa 2004-early 2005 because I would want to tap into the full feeding frenzy that exists in a bubble.
Clot, KL… rip me to shreds. (Seriously, where are the flaws in my thinking; what have I missed?)
You(admittedly) underpriced your home by 10K, then the market corrected the underpricing by bidding it up…
This statement would only be true if all parties bidding shared perfect (or complete) information. Otherwise, you would have to at least acknowledge the possibility that a “Winner’s Curse” phenomenon might have taken place.
jb
Hopefully this wasn’t posted already. haven’t kept up with the comments…
http://www.realtor.org/RMODaily.nsf/pages/News2007051504?OpenDocument
foreclosure, divorce, death or job transfer. that’s the order you’ll typically get the best deal on a property for.
The point is it wouldn’t be optional. You have to file a request to make changes to a property. Foreclosures are filed. You have to register a birth or death. You have to get a license for a car. House tax details are in the public domain, sale details are in the public domain. Why not have a legal filing of intent to sell a house and a legal filing of the details of that house for sale, standard disclosure form, $50 fee? It wouldn’t need to be a national system – the point would be to put basic information into the public domain. If someone wanted to corral that information to make access easier and charge for it (realtors even) why not?
Realize that in some cases it takes more the 6 months for individual tax records to make their way to “public data” systems. Would any of this data even be remotely helpful or useful if it came with a possible 6 month delay?
So is the next step to completely overhaul the state public records system to make “for sale” data more timely? Who gets to pay for that?
jb
Clot, KL… rip me to shreds. (Seriously, where are the flaws in my thinking; what have I missed?)
You did’nt miss anything -you could not have because.. in your words.
Because I am such a genius
KL
You had to expect some ribbing for that one!
Because after all Because I am such a genius
foreclosure, divorce, death or job transfer. that’s the order you’ll typically get the best deal on a property for.
I know agents that have word-of-mouth referral deals in place with morticians/funeral homes. The ol’ “I’ll send you my listings if you send me your stiffs”-kinda thing.
jb
#138 Rhy: Thanks, It was UC end of March, and I guess that deal fell throygh as it came back on the market with a list price of 10K less.
They have been trying to sell this for over a year, OLP was 579K I believe. Thanks again.
From CNN/Money:
Home prices drop for third straight quarter
U.S. home prices fell for their third straight quarter, according to an industry report released Tuesday.
The median price of a single-family home fell 1.8 percent to $212,300 for the three months ended March 31, compared with the first quarter of 2006, according to the National Association of Realtors (NAR).
It was the third consecutive quarter of decline, and prices are now down 6.5 percent from their peak of $227,100 in 2006.
The home price report revealed a broad but shallow pattern with prices declining over every region but by no more than 2.8 percent, which occurred in the Midwest.
The first-quarter drop follows an overall 2.7 percent slump in the fourth quarter of 2006, which was the biggest year-over-year drop on record.
now I’m confused…????
“First-Quarter Metro Home Prices Stabilize”
http://www.realtor.org/RMODaily.nsf/pages/News2007051501?OpenDocument
Seneca (139)-
The flaw in your thinking is that you assume the FSBO buyer who approaches you won’t be as sharp as you were when you bought FSBO. Your own words, “…why people think I would pay today’s asking prices, let alone pay them as FSBOs the commission, is beyond me”, perfectly describes the mindset of just about all FSBO buyers.
You also assume that your potential buyer will be “happy” with his imputed 1% commission. Most FSBO buyers are in it to save AT LEAST 6%…and, truth be told, they usually want more than that. FSBO is a zero-sum game; there’s a winner and a loser. As much as many here will whine and stomp their feet about it, it is mathematically impossible for a buyer and seller to both “save” the same pile of money that’s on the table; and, the psychology of the FSBO buyer and seller make it impossible to somehow “split the difference”. The occasional FSBO deal gets done, because one party or the other suffers from an inferior pricing strategy or inferior negotiation.
All the investment properties I’ve ever bought I bought from FSBOs. I won’t even think about pulling the trigger until we’re around 10%+ under market value, and I know I’m not alone in that philosophy.
Nj is in top ten for being overpriced…but still experiencing one of the biggest….GAINS in sales volume??!!!??? Also, read the following paragragh carefully. are they talking about year to year or quarter to quarter????
Northeast: existing-home sales rose 1.2 percent to an annual pace of 1.13 million units in the first quarter from the same period a year ago. The biggest gain in the region was in New Jersey, where sales rose 7.6 percent from the fourth quarter of 2006, followed by New York state, up 7.4 percent, and Massachusetts with a 3.9 percent increase…
So let me get this: DOM is up significantly, inventory is exploding and the median sales price is up 1% YOY in Northern Jersey. Did I get that right?
yes…pretty clear but what about that paragragh i outlined above…is that english???
paragraph…and above=150
Lisoosh (137)-
Register your listing with the government?
That could get me to leave this biz.
The government can only screw things up; government is incapable of doing anything correctly.
#150 Was not 4th quarter sales in 06, one of the lowest?
If I could access the MLS for a nominal fee, I would be more encouraged to enter the market as a buyer.
Then I could spend some time on my own figuring out what I really want and where to live before I work again with an agent.
Last time (Fall 2005), I spent a lot of time looking at junk before I realized that nothing was available in my price range.
I could have saved us both a lot of time if I had been able to pre-screen the properties (look up addresses) and drive by on my own.
I’m really just venting about the way the info is presented. an annual comparision for one stat followed by a quarterly comparision for another. Seems like it’s considered bad writing nowadays for info to be presented linearly so relative idiots like myself can grasp the data quickly.
155 – ok. so that’s why the stats were presented that way. thanks. I just get confused sometimes…(see 157). Guess i underestimated the writers willingness to slant the data….
#143 –
“Realize that in some cases it takes more the 6 months for individual tax records to make their way to “public data” systems. Would any of this data even be remotely helpful or useful if it came with a possible 6 month delay?
So is the next step to completely overhaul the state public records system to make “for sale” data more timely? Who gets to pay for that?”
Tax records are processed.
You could have a couple of options:
1. Simple standard form that you take to a local planning office to have scanned in. Office just lists basics.
2. Computer access online – pay fee with credit card (could be $20 or even $10, just enough to pay for database) you put in the details. E&O would be listers responsibility (not realtor), sure insurance companies would love the business. Could have one database per state.
Would be instantaneous and cheap. I’m sure realtors would love to provide a listing service for a fee.
#154 – government would only host the database, nothing more. How scary is that? You register your car with the government. You let them know your family status.
And realtors would be free to take that information and use it at will, just like any other customer. The database would be just standard info, all the fancy marketing would be up to the realtor or homeowner.
Okay I give up…..what the hell is a “LOD”?
“‘This is a wonderful time to buy a house,’ said Linda Hopps, president of the Greater New Bedford Association of Realtors. ‘The rates are great. The prices are good. There is a lot on the market so you have a lot to pick from.’”
There’s no doubt in my mind that the NAR has a system of indoctrination on par with the CIA.
There’s no doubt in my mind that the NAR has a system of indoctrination on par with the CIA.
Nothing but mindless parroting of the “talking points”.
jb
#160 LOD= League of Dorks
#137 Great Post.
This would be like the Insurance brokers…I believe people are smart enough to buy car insurance without an agent. However, if you want to hire one to help you choose car, home, etc policy you can.
Most of the general population are probably smarter, and know more about RE then majority of these Agent these days.
So where’s the VALUE. Access to information, you take that away from them and they’d starve.
Bless you BBB!
Clot,
Most people I know list on FSBO not because they want to pocket all of their 6% but because they just don’t want the realtor to have it.
My buddy says, “I’d rather give it to a guy whose buying my house then those idiot realtors”
make #164,
I agree. I’ve done it with homes, investments, products, a whole freakin’ pool for cryin’ out loud.
“‘This is a wonderful time to buy a house,’ said Linda Hopps, president of the Greater New Bedford Association of Realtors. ‘The rates are great. The prices are good. There is a lot on the market so you have a lot to pick from.’”
If NAR didn’t help me when I was buying and selling I’d be pissed too. I just laugh at NAR. It’s one thing to lie when people believe you and another when no-one believes you. Just give it up already and call RE what it is. Chinese water torture.
“Just give it up already and call RE what it is. Chinese water torture.”
make,
Has there been a revelation?
Clotpoll Says:
May 15th, 2007 at 2:50 pm
Now, let’s assume that your buyer pool consisted of the following:
1. Buyers attempting to do the same thing as you: avoid Realtors, and pocket the potential commission amount in the form of a discount. Or,
2. Morons.
It’s been my experience that only the sharpest, best-informed buyers look to purchase FSBOs.
clot: Your argument of “adverse selection” in the buyer pool clearly refutes everyone’s objections to your claims. Ultimately, the vast majority of the “moron” pool are likely to be brought to the table by a realtor – people can argue with that point, but I don’t see why.
The clear incentive is on the seller side, but I really do not see as strong an incentive on the buyer side. As a result, the FSBO seller has two extra hurdles: #1 more savvy and resolute sellers [ON AVERAGE]; #2 a greater need to provide publicity among a group of individuals who are indifferent.
Has there been a revelation?
The worst case scenerio is what I’m seeing. Bad for buyers and investors alike. Flat prices for years to come.
An affordability correction that benefits no one. First time buyers don’t get the prices they were expecting and people like myself don’t get a quick correction and then back to doing business and making money.
It’s not fun just sitting around and doing nothing all day long. RE is all I know and now it’s dead.
Knicks didn’t make playoffs, yankees stink my wife told me to get a job cause I’m beggining to annoy her.
Make [172],
You have the NBA draft coming up and you can tell your wife to go out for dinner 5 nights a week.
You have the NBA draft coming up…Knicks don’t have a pick the gave it to Chicago.
Let me tell you retirement isn’t all it’s cracked up to be.
It was during dinner that she said I was annouying and I began gossiping like a bitch
make,
No. Dinner, 5 nights a week with her friends.
Not to worry, all you need is a vicious down leg in this downtrend. You’ll be able to pick up properties on the cheap.
make: figure out how Isiah is going to get Jermaine O’Neal – that should keep you busy
I’ve enjoyed reading the back and forth about FSBO’s, brokers and open access to the MLS, especially since I’m from NYC, where there is no such thing as an MLS. There are FSBO’s, however, and I considered becoming one myself when I sold my co-op. I’m glad I didn’t do it, because I know that I got a lot more money than I would have on my own. I interviewed three brokers/agents from three different companies. First one seemed all talk no action. Second one priced the place too low. Third was the charm, however: priced it correctly, handled a bidding war and a difficult co-op board, and cut his commission so that we all walked away from the closing table with the most amount of money.
I wouldn’t say I’d never do a FSBO, but it totally depends on the piece of property and the location. Not to mention the various other intangibles: time, convenience, etc.
Now car salespeople, on the other hand…
#156
“I could have saved us both a lot of time if I had been able to pre-screen the properties (look up addresses) and drive by on my own.”
Did you ask your realtor if you could drive by a property before you made an appointment to see it? When we were looking for a house, that’s what our realtor would do. That way, we wouldn’t waste his time or ours.
Willow,
Yes – when I was working with a realtor, I could do that for the listings she chose to send me. But if I don’t have a realtor, it would be nice to get an idea of what is available in different towns other than the (usually low-end) open houses, so I can decide if it is even worth contacting a realtor.
It’s difficult cutting through the fog of pain killers and other meds, I’m on, but I would swear that the NAR has reported Q1 existing RE sales up 7.6% YOY in NJ.
I can’t help but think this has something to do with the magic of seasonal adjustments, because I can’t seem to find the NSA number and every single scrap of info I pick up about the local RE markets say they are dead. What the hell is going on?
Here are the numbers from NAR’s report:
state Q106 Q2 Q3 Q4 Q1 07
NJ: 170.6 157.9 147.3 141.3 183.67.6
Ohio Attorney General Targets Wall Street for Lending
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ai09mLT1Unws
Ohio Attorney General Marc Dann, likening the subprime lending industry to armed robbers, said he wants to sue Wall Street firms because their bond sales enabled consumers to get mortgages they couldn’t afford.
Flip This House nothing but a scam…
I-Team: Flip This House
make (172)-
The business is there. Whatever’s not happening right now are the things that you should be laying the groundwork for, so that you can capitalize in upcoming months.
When the rush for the exits begins, you need to be at one of those exits, ready to “remedy” those sellers’ problems.
Was this Milburn house one of those on the “photoshop list” discussion from the other day. Something does not look right?
http://new.gsmls.com/public/detailLst.do?mlsNum=2406391
Could I file a ethics complaint against the listing agent as a prospective buyer for this behavior?
ChiFi (170)-
“Adverse selection”. I’ve been racking my brain for two days trying to remember that term.
Thanks.
make (172)-
Knicks= Chinese water torture
anyone here on http://www.linkedin.com ?
Dr Bam (184)-
That seems to be- at least- some kind of failure to disclose. Hell, what it really is…is a fraud. Although, I suppose it could be argued that any prospective buyer would see the real picture when visiting the subject property in person. Unfortunately, wasting someone’s time by creating a false impression may not rise to the level of something that’s actionable. IMO, there’s puffery and salesmanship (all fine and good)…then, there’s bait-and-switch (no good).
I think the ethics committee at the local board would take a hard look at that.
I goofed here………
chicagofinance Says:
May 15th, 2007 at 5:17 pm
clot: Your argument of “adverse selection” in the buyer pool clearly refutes everyone’s objections to your claims.
#1 more savvy and resolute sellers [BUYERS]
You can get free access to those subscription articles from Wall Street Journal through http://www.congoo.com
Free tip.
At the end of the day, the argument about FSBO versus realtor is that the ultimate payday for any seller is being hooked up with a moron, and I have posited that a realtor is more effective at catching a moron and sending him to the seller.
Does anyone care to contest this?
What could be more moronic than a comlete naif assuming they can out-negotiate a professional?
#188
Thanks for the thoughts, Clot
It would seem that honest realtors would want to put a stop to this photoshop craziness as it gives them a bad name.
However, you are right that there really is no real cost given the buyer eventually sees the property in person. I for one refuse to even visit a listing that has been photoshopped.
Wicked,
I’m on Linkedin. Why?