A Buyer’s Market
One of the most poignant songs about the frustration and disappointment of unrequited love is Bonnie Raitt's "I Can't Make You Love Me." With a little retooling of the lyrics, it could be equally expressive of the frustration and disappointment of failing to sell a home.
Bring down the price, bring down the rent
Let me pay back, the money I was lent
Forclose on me, for all of my buys
Just help me close, please qualify -- please qualify for me
Cause I can't make you buy me if you don't
I can't make a good deal, I owe too much on my note
I'm near a park, with beautiful flowers
I'll go way down on price, I'll re-tile the shower
but you won't, no you won't
Cause I can't make you buy me if you don't
I'll close my eyes, then I won't see
The fall of the market all around me
Foreclosure will come and I'll do what's right
I'll borrow 'til then, to the very last night
And I will give up this fight
Cause I can't make you buy me if you don't
I can't make a good deal, I owe too much on my note
I'm near a park, with beautiful flowers
I'll go way down on price, I'll re-tile the shower
but you won't, no you won't
Cause I can't make you buy me if you don't
I Can't Make You Buy Me -- IrvineRenter
.
.
When the market turned up in the late 1990's the balance of power in the market shifted. During the last decline, the buyers had an advantage. During the bubble the advantage went to the sellers. The seller's market went on for so long and became so feverish that people have forgotten (or may never have known) what it was like to see buyers in control of the action. The purpose of this post is to re-educate buyers on how to behave in a buyer's market.
Buyers have the Power
As a buyer, you must remember you are the one in control. You are the scarce commodity in the marketplace. The seller is one of many for you to chose from, and they are all desperate. They need you. You don't need them. No matter who you buy from, you are going to leave all the other sellers disappointed because they are going to continue to be trapped in their homedebtor's prison. You can't please everyone, so focus on pleasing yourself.
Screw the Sellers
Don't become concerned with the sellers needs, wants and problems. Does it matter to you if this house is their entire savings for retirement? Do you care if a sale below a certain price puts the seller into bankruptcy? If these issues matter to you, ask yourself this, "Would you give them money if you were not buying their home?" Unless you are running a charity, you should not care about the consequences of someone else's financial decisions. They created their own problems, it is not your responsibility to solve it by overpaying for a house.
Pay the Lowest Possible Price
This may sound like common sense, but the behavior of knife catchers over the last couple of years shows otherwise. Don't ask for or take any incentives, and pay your own closing costs. You are paying for this stuff, it is just buried in your loan. You will be paying interest on this purchase for the next 30 years, and you will be paying a 1% property tax on these costs for as long as you own the house. You are far, far better off lowering the price and foregoing the incentives and paying your own closing costs.
Use a Buyer's Brokerage Like Redfin
Redfin and other buyers brokerage typically kick back 2% to you at closing. Work out a deal with them in advance where they will agree to take a 1% commission at the closing so you can lower the price by 2%. Again, you are paying taxes on the purchase price, so you want to make this as low as possible.
Your First Offer is Your Best Offer
This is the most counter-intuitive part of buying in a buyers market. Ordinarily sellers, or more accurately the seller's realtor, try to create a sense of urgency to buy the house. They want you to think other people are looking, there is going to be a bidding war, you need to get your offer in today, etc. Remember, in a buyer's market these ploys are all lies. You are the only buyer, and you can take as long as you want to buy the house. Your task in negotiating is to create a sense of urgency and panic in the seller. This is why you make your first offer your best offer.
Start with a bid at least 10% below asking price; however, it can be less if the most you are willing to pay is less. Lower your bid as follows:
- If you are actively bidding on the property, make your offers expire in 5 days. If you are still interested in the property resubmit a fractionally-lower offer after 7 days (make them sweat for 2 days.) Don't make is so much lower as to lose consideration, but make it enough lower that the seller gets the message that they need to come to your price before it gets any lower.
- If the seller makes a counter offer, retract your offer and resubmit a lower one. Works the same as the time decay offer above. After you have lowered your offer a few times, the seller may panic and take your offer before it goes any lower. This is what you are after.
- Lower your offer $500 each time you speak with the seller's realtor. Every time they communicate with you, they will pressure you to buy. Lower your bid each time they speak with you to send a message that their pressure is not working, and it is, in fact, hurting their client.
- Lower your offer $2,000 if the realtor uses one of the standard lies I mentioned above.
- If the realtor tells you there is another bidder on the property, immediately withdraw your offer and tell them to call you if it falls out of escrow with the other buyer. Since this statement from the realtor is almost certainly a lie, it will cause them to have to explain to their client why the only buyer around has pulled their offer.
Don't Close the Gap
When the seller starts to counter-offer, it is very tempting to agree to their price to close the deal, particularly if they are below your original offer. Don't do it. In a buyer's market, the seller will come to you. You have the power. However, if they are below your original offer, and if you really, really want the house, you may raise your offer one time, but do not get closer than 1% to their counter-offer. The selling broker makes a 3% commission, and the realtor you have been dealing with probably makes 1.5%. By getting to within 1% of the seller's counter-offer, the realtor can choose to give up part of their commission to make the deal. Since they are desperate as well, you should go ahead and squeeze them. A 1/2% commission is better than no commission.
After you have agreed on price
Just because you have reached agreement on the sales price does not mean you are finished making this deal the best it can be. Go through your inspection sheet and establish holdbacks for all repairs. Make the holdback amount 150% of the lowest qualified bid. Say you are doing this as an incentive for the owner to get this work done before move-in. Also, if there are decorative items you do not care for, use the same holdback procedure for these items. The time to get your granite tops is before you move in.
If you are really tough
For those of you with nerves of steel (and a desire to abuse your power,) I have a few additional suggestions for you:
- A week before closing, tell the seller or realtor you are considering pulling out of the deal because you have found another property you like. See if they offer you an additional discount.
- Three days before the closing, withdraw your offer and say you want an additional $1,000 off. Offer no explanation: You are only doing it because you can.
- Ask the seller to write you an emotional letter thanking you for purchasing their home. Send back the first one they give you saying they did not praise you enough.
Conclusion
Not everyone has what it takes to implement all of these price-busting techniques. However, the more of these you put into practice, the lower the price you will pay for the home you want. You will never see the seller or the seller's realtor ever again. It does not matter if you offend them. In the end, they will be relieved you bought the house even if you made their lives hell in the process.
.
.
As a buyer, it is time to be upbeat. There is a song that uniquely captures the joy of finding what makes you happy: Sade's "Your Love is King." If reworked, it also captures the joy of buyers in a buyer's market.
Your cash is king,
Keep you in my bank.
Your cash is king,
never need to thank.
Your diamond ring,
round and round and round my head.
Wiping all the debt from me.
It's making my soul sing.
Having the very best of things.
I'm crying out for more.
Your cash is king,
Keep you in my bank.
Your cash is king.
You're the ruler of my account.
Your diamond ring,
round and round and round my head.
Wiping all the debt from me.
It's making my soul sing.
I'm crying out for more.
Your cash is king.
I'm spending more, I'm spending.
You're making me rich, inside.
Your cash is king,
Keep you in my bank.
Your cash is king,
never need to thank.
Your diamond ring,
round and round and round my head.
Wiping all the debt from me.
It's making my soul sing.
Having the very best of things.
I'm crying out for more.
Wiping all the debt from me.
It's making my soul sing.
I'm crying out for more.
Your cash is king.
This is no bad debt
This is no sad and sorry dream.
This is no bad debt
Your cash...
your cash is real... gotta keep you in my bank,
never, never need to part,
spend me.
Never letting go,
never letting go,
never going to give it up.
I'm spending,
you're making me rich...
Your Cash is King -- IrvineRenter
Home Front: Sellers can be choosers
Friday, June 17, 2005
By Amir Efrati, The Wall Street Journal
http://www.post-gazette.com/pg/05168/523385.stm
Within a month of putting her two-bedroom house in San Francisco on the market recently, homeowner Linda Gao had five offers, each one above her asking price of $699,000. So before accepting the most-attractive bid, she threw in an extra condition: If you want to buy my house, you have to feed the squirrels.
“I then get my software SFR estimating program on homebuilding to check the SQ ft cost to build new”
Don,
What software are you using?
IR,
Will you adopt me?
That was the best post!
I live right next door to you. San Jaoquin County has the highest foreclosure rate in the country and the Realtors still play their stupid games. “ Here is the bathroom, and this is the kitchen...Who makes up this stuff. And “here is my finger give it a pull!” Have you seen the carnage in Elk Grove? NEW custom houses sitting empty and swimming pools are breeding grounds for west Nile virus laden mosquitoes and homies of da hood all over the place --- and they won’t drop the prices. Visit Sacramento “flippers in trouble” to see price drops of 40 % on nice houses, oops too high still. Thats why I am sticking to my guns on the price. If we all do this and only qualified buyers come back maybe we can keep the prices low. I want a house only for convenience NEVER for investment. I have to admit, I am having one hell of a good time watching these idiots try playing their tired games on me. ..And they never get upset and come back for more- only because they think they will trick me. Maybe I am stupid and they are right? But, does it make since to pay someone $36,000 for picking their nose? I always fill out my forms myself what do I need them for? Take my money? All the real estate forms I already have. They cost $50 for the package from any local realty board. What do these people do other than lie and be smug? Do you want fries with that? Get a real job realtards. Without money ftrom buyers you are nothing but smoke mirrors and talk.
Very good advice… and funny too.
I don’t know about the Southern Cal market, but here in the Sacramento Valley region prices aren’t even CLOSE to the bottom they will reach. The market is glutted with over-priced homes right now. A few more months of REOs and foreclosures and prices will REALLY tumble. I expect this to continue into next year as well, at a minimum.
Your tactics are going to be even more effective in a couple of years.
And to the doubters on my quest of “karma” production. I currently rent a large house on a corner lot. My rent was reduced 50% last month because I told the Realtard flipper - owner I was thinking of moving and gave him 30 days notice. That was to cover my tail if a Realtard tries to sue for “bad faith”. The local rent rates are dropping, and the owner-wanne be millionaire-lazy flipper wants a good tenant. I pay one month In advance of when my rent is due to make them need ME! Yes, they are using my money I know....but I AM IN CONTROL! They have too many flipped properties and I can sue in heartbeat if they are stealing. They wont. IT IS constructively MY PROPERTY according to my contract. Tell me how the other Realtards think they can stick their signs in my manicured lawn? Thats trespassing . So last Sunday several different Realtards without MY PERMISSION did what Realtards do, they think that all property is theirs, and stick posts in my lawn here there and everywhere. OPEN HOUSE, oh watch me jerks. Now, I could remove the obnoxious balloons and signs but why? Why not give them some fun? So my flipper neighbors who were trying to get rich quick in real estate decided to lie on their loan applications. Of course with consultation from their Realtards, appraisers and loan officers. If you think I can let theis sham continue, you aren’t thinking clearly. None of these JERKS ever bothered to wonder why no car was parked in front. I walked. EVERYTHING is for sale in my exclusive gated community. I want to see blood running in the gutters before I close a deal. Let them have some of their own medicine. They had no other place for their lying signs. I was going to cut the balloons and put the signs in ther trash but figured I could have more fun raising hell showing promo sheets on better houses and lower prices...this I did with relish. I checked today, so far no offers...none of the houses. The Realtards have too many to sell they will NEVER be back. I think maybe its time for another offer? I need to withdraw one of mine to keep me flexible in my new hobby. I want the prices to sink to 1997 levels! Bleed baby bleed. October 1 is only days away and all the idiots with ARMS will be praying for deliverance. On October 20, many of my flipper neighbors will be in deep doo doo. Its time to celebrate. I would love to see more foreclosures. WHY NOT? There are three bankowned on this block already, and I am very helpful telling prospective owners about illegals, and their thieving ways and about the “hood”. Realtards are afraid of the laws on descrimination so they made up a new word meaning “WATCH OUT HERE” The word is “spotty”. So we live in a “spotty” neighborhood and the cops won’t show up for days, . if ever. There is nothing illegal about that! If any readers are in a protected ethnic class, look for the word “spotty”. Its Realtor speak for your the racial slur of your choice. Look it up. Its not my word but the Realtards. whisper whisper if you know what I mean?
I only rent so why not? All these “take out” french fry chefs in their $500,000 houses and $14,000 year salaries. The FBI should be racking them up and putting them in jail, but they won’t. Its not politically correct to put illegals in jail for mortgage fraud when they don’t even have social security numbers, Real credit reports or REAL jobs. I don’t know why anyone would be upset at my posts. REAL criminals Realtards, appraisers and mortgage companies have been cheating . They need to have more punishment then mere bankruptcy. I want to help them a little. LOL
The best price is easy to figure out. I run a 10 year Zillow and draw a line from the 1997-1998 portion and extract the results for 2007. If the price is below the line I can then call my insurance company to find out what they would pay if the house burned to the ground (replacement cost) . I then get my software SFR estimating program on homebuilding to check the SQ ft cost to build new. I give a few thousand for the improved lot and thats my final price, if it is perfect and I have letter of “please buy my house, I promise to name my children after you if you buy today”, I may consider it.
Oh yes I love this time of the year! RE sales in the toilet and Realtards looking for work at the car wash.
I am retired and love to give some karma back to Realtards. All of my offers are reviewed by my attorney. EVRYTHING I do is legal. My acquaintance with the free classifieds, he is a juvenile. The police wont even bust gangbangers illegal aliens or other criminals. I don’t think its likely they will go after a 12 yeard old. I am doing exactly what Realtards, loan brokers and RE appraisers do. Only difference is I dont lie. I never cheated anyone out of a dime. If these moroms want to kiss up to me because I have money, its not my problem. And guess what if I do find a house thst I want AT THE RIGHT PRICE FOR ME, I will buy it CASH. Of course! But as you know REALTORS AND THEIR BROKERS ALWAYS have first dibs at any deal. Whats fair about that? If it were wall street it would be illegal. Insider trading in Real estate should be a crime! Here is another phoney Realtard game. Ask your self are you living in a house on a slab foundation? Okay, now look at all the building inspection contracts. They always put in a disclaimer on a poured foundation. WHY? To cheat you. The most expensive repair on a house built on a slab is the foundation. YET THIS IS not part of the inspection. WHY? Because if the slab is poured incorrectly, with the wrong mix the wrong time, the foundation will be weak. How do you check it? with GPR! All commercial property inspections use GPR, why not residential construction. Ask any engineer they will tell you. Any rush job on soil sampling and testing, grading, and foundation construction is a recipe for disaster. Many big name builders cheat because they know they wont get caught for years. They can then blame age or settling, some other nonsense. I saw one house that gets retiled once a year each time its flipped. Why? to hide the seriuously cracked fouyndastion. The house was built by a REALTARD/builder. I have two houses in escrow as we speak. I bet none of them pass my written requirements? LOL
It is a good idea to separate personal property from real property in the transaction. Many people were financing consumer goods with their mortgages by getting incentives from builders and setting themselves up to pay property tax on this stuff forever.
Hmm, thinking about your point about the taxes, IR, I had an idea:
Wouldn’t it be good to seperate all not-integral parts of the house from the contract? I mean, make a seperate contract about the purchase of the kitchen appliances, the spa, the sauna, everything that isn’t really part of the house? Why pay taxes for the refrigerator or the washing machine?
That column was first published: April 19, 2002
Note the comment about the Florida condo that had 30 contracts on it....
Today. you’d be lucky to get 30 Florida condos for one contract....
All tax advantages are included in the price of the home.
another song option: AC/DC’s “Big Balls”
I guess I am trying to be a patient renter, too. But I also heard that purchasing a home will allow me some tax breaks. Currently, I’m surfing the net looking at home prices and trying to balance the pros of tax deductions and the cons of expensive homes in Irvine. :(
Nice way to exploit your handicapped child… losers…
“After it was verified that the family indeed had a handicapped child, the seller was touched deeply”.....BARF
They were touched deeply..only after they VERIFIED that the child was handicapped? What did the creeps do, ask the buyers to bring the kid over?
Letters...HA my how things have changed.
I should email that author a link to yesterday’s post on the buyer’s market.
Don,
You are full of it. You don’t do these things.
You left off the most important part of your post, the beginning: “Last night I had a dream that I...”
Letters to sellers (pathetic IMO):
http://realtytimes.com/rtcpages/20020419_strategies.htm
I don’t know where you’re going to....
The sellers you force to write letters are likely to be the same ones who were the buyers who were forced to write letters.
After all, it’s unlikely that any long term owner would be in the market, and many sellers today are in a forced sell situation as they bought in the “up” market of two to four years ago....
And the sellers of two to four years ago are probably either renting or moved up to bigger homes with large down payments.. so they shouldn’t be selling either.
So, if anything, you might take some sympathy for those sellers.
Deep breaths Brother, deep breaths.
Carl
Charles,
Thank you for the insightful and useful comments. I will remember your advice the next time I buy a house.
Carl
IR I’d take this post down, could be a troll to get people to bite then get the blog taken down for criminal activity.
Don, loved your fantasy post. Very interesting activities. You must be extremely busy with all your efforts.
“A “friend of mine” likes to place FREE ADS in the classified houses listing houses that have been abandoned—FOR FREE”.
Not sure what your getting at there Don, but that might not be a very smart thing to do. If it is indeed vacant, you are just inviting vandals and squatters. If it is still occupied and you are just messing around...it could have dangerous consequences.
I heart awgee.
I loved this article. Its about time Realtors stop kicking buyers in the guts. Rude, lying, cheating thieves. I have been doing this procedure above to buy with NO INTENTION of buying. I have enough ‘“subject to’s” to fill a page. To season the pot, I put a large refundable earnest deposit on their house to whet their appetites. $10,000 to 15,000 deposit with the assurance that I will put 50% down and finance a small portion. They know the high Loan to Value ratio on the COMPLETED deal is what kills a lot of offers. Tell them mine is around 30-50%. They change their religion and pray to me wheh I make these offers. I do it for schadenfeude-- not so much to the sellers since are already a lost case. But I love to watch the “professional” Realtors back to their old tricks, high ball, low ball, lying, cheating. I want to see them washing “my car” in the car wash, by hand. And walk up and say, you missed a spot. After they stop sweating from the detail job, I tell them that the owner of that car will be proud, and I drive away in MY CAR.
The next time I see a Realtor, I will ask “DO you want fries with that?”
I’ve noticed little change in their rat behavior once a rat, always a rat. I watch the MLS daily and start immediately calling the LISTING agent. They get SUPER GREEDY thinking that they are going to nick me for a full 6%, so they “cooperate” , with so many failed deals, I know they will wet their pants before they call their sellers to tell them about a “potential offer” (sucker).
What do they do? I drop them like a rock to see how much the price drops. When the seller gets really antsy they start having “open houses”. Last Sunday I went to four of them. I dropped my phoney business card ( phoney name and address of a vacant lot in a non existant town , telephone number goes to the county jail - voice mail) in their little “sucker bowl” and start asking pointed questions in front of ALL potential buyers, leaving promo sheets around for similar neighborhood houses I know have already gone to foreclosure and are bank owned. These prices are always lower and have more amenities.
I love the a smell of the carnage. My hatred doesn’t touch the lying and cheating of these people. Only a few years ago they were requiring buyers to write “love letters” to see who was the “best” person to live in the damn house. Turnabout is fair play! I think I found a new hobby! I have even pulled this stunt on the same Realtor, they don’t care but keep kissing my tail to keep me “happy happy”. I realize that with hundreds of Realtors in my area they are all competing for the few “last fools” who are still buying. But I am NOT one of them, I just love to watch the pain. Sometimes I will tack signs and bogus super low prices on the FANCY balloon festooned OPEN HOUSE SIGNS which are all over they place. I just stick up other better deals on their signs to take the traffic away after I have had my fun. Shhhh Don’t tell anyone. A “friend of mine” likes to place FREE ADS in the classified houses listing houses that have been abandoned---FOR FREE. The paper has no clue. But the wild goose chases, the greeedy brokers running around chasing ghosts. More fun? I email all listing agents and complain about their high asking prices....and give them several LOW comps of nicer houses.
I am waiting for windows to open and bodies to come flopping out on to the sidewalks. Its to early yet.
Maybe we should start sending them free offers for pre-need mortuary services to give them the hint. Let the telemarketers get them.
I forgot. If you do want to buy a house BE CAREFUL completing the 1003 form. Within seconds of this all credit bureaus sell your name for up to $65! to Loan officers who call these “trigger leads”. They will hound you to death with telephone calls , home visits and email. Tell EACH bureau YOU WANT TO OPT OUT AND WANT NO “trigger leads”.
It helps to have cash in the bank--YES, and a high FICO, YES. THE ;aw requires them to SHOW ALL HOUSES and PRESENT ALL QUALIFIED BUYER OFFERS. Thats when I get on my soapbox. A few newbies start crying. Get out of this crooked business and geta REAL job that helps people, not enslaves people.
If you don’t mind the hassles of your phones ringing day and night you can have outrageous fun with these high pressure telemarketers. Who are paid to lie lie and lie again.
Want more fun yet? I know people who see these irritating ads all over the interent 1 % down and $400 month for $799,000 mortgages.
Well my friends tell me they get white pages data or census tract data and have a ball! You NEVER SIGN ANYTHING, but I knw these fools are running the credit reports on all these people and call them day and night hounding them to buy anything.
Ahh
What a nice hobby this can be.
,
IR:
I’ve got to agree with Marty McFly. Besides being a pianist, I am a CA RE Broker - that’s not what I do for a living, it’s just part of some specialty coursework I took while working for a lengthy period for a real estate developer.
Anyway, that education, combined with some law classes, and with observing what a developer with both top in-house counsel and outside law firm on retainer will do (& is capable of) compelled me to comment about your “really Tough” paragraph.
It’s interesting to watch what happens when the escrow company, as a fiduciary, is caught in the middle of a buyer-seller dispute and cannot release funds to a party without a mutual release of liability from all parties involved in the transaction.
Well how are we supposed to know you meant it tongue-in cheek? We take seriously everything else you write in this blog!
Moody’s alters its subprime rating model
http://www.ft.com/cms/s/0/be233266-6ad8-11dc-9410-0000779fd2ac.html
Appreciate the primer.I think I’d add at least one more zero to all of the negotiation numbers.
Risky Loans Help Build Ghost Town of New Homes
http://www.nytimes.com/2007/09/24/nyregion/24citywide.html?pagewanted=1&_r=4&ref=business
Sorry, have to agree with IR.
I read that section and immediately laughed. I knew it was a joke right away.
Countrywide helping 35,000 avoid foreclosure
http://mortgage.freedomblogging.com/2007/09/24/countrywide-helping-35000-avoid-foreclosure/
raindrops, almost everyone on this blog would advise you - based on financials - to simply postpone your purchase. Rent a nice place if you must nest.
Price drops take a while. Why buy when there are more price drops coming? And inventory, mortgage woes, public perceptions, historical averages etc. all point to more price drops coming, much more than the small ones this early in the downturn.
In the last downturn, it took about 6-7 years to go from the turning point in 1989-1991 to the bottom in 1996-7. This one too will take time. We’re just barely at this cycle’s turning point now.
It’s a quotation power thing. Greenspan didn’t mean for people to take his ARM mortgage recommendation out of context either (ie. I think I read he had an interview where he said he said it in the very limited context of someone who was looking to sell their house within the next few years, and that he himself likes to go 30 year fixed for his own property).
People are taking your blog literally and will take that quote out of context on you.
Wolseley’s fresh alert on US housing market
The group has eliminated 3,500 jobs as income from its American building materials business fell by almost 75 per cent
http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article2520336.ece
I agree with him, now is a good time for buyers. But next year will be even better, and the year after will be better than next year, and .....
“Is it just me or do other readers of this bog see a constant amount of hate on a daily basis here.”
It is just you.
I was just drinking my first cup of Kona when I read it.
And trust me, it woke me up!
It’s true. There is NOTHING to do downtown.
Mojo,
Great advice in this article! As far as not too aggressive, if the seller is mad, they’ll drill holes for a $10k cut much less a $50k cut off the sales price.
I’d rather have the cash to do the repairs. Besides, if enough damage is done, a transaction can be reversed. Yes… reversed due to fraud/vandalism.
I liked the tongue in cheek bit about the letter. Oh the squirrels!
As to Realtors (tm), one thing I’ve learned on these blogs is find out the truth for yourself. They won’t tell you any.
Got popcorn?
Neil
Wow. What a snow job. Not a word about the market being overpriced. Talks up the rate drop as a “stimulus,” then brings out this gem:
“Nobody knew that 1995 was the bottom of the last downturn either until years later. In hindsight, every living adult should have bought that year, but most everybody was fearful that the market would continue to decline. Sound familiar?”
Kool Aid anyone?
How Mortgage Fraud Functions
http://www.voiceofsandiego.org/articles/2007/09/24/news/02mortgage092407.txt
American Home Mortgage Faces Inquiry
http://biz.yahoo.com/ap/070924/american_home_regulatory.html?.v=4
American Home Mortgage Investment Corp. bounced property tax checks for some Maryland homeowners, local and state officials said Monday, and they have demanded an explanation from the bankrupt mortgage lender and servicer.
The Maryland Commissioner of Financial Regulation filed an inquiry with American Home Mortgage on Friday. Melville, N.Y.-based American Home Mortgage has five days to respond to the letter, said Joseph Rooney, the deputy commissioner for Maryland’s financial regulator.
Officials in New York and Washington state are also looking into bounced checks there.
Mortgage servicers typically collect property tax payments each month with a borrower’s mortgage payment. The property taxes are then placed in an escrow account and held until property tax bills are due. Because they are placed in an escrow account, funds should always be available to make the payments.
Oops, linking the article directly, so link preserved over time
http://ochousing.blogspot.com/2007/09/market-time-report-revitalizing.html
Realtor’s take on what the buyers market means
Market Time Report: Revitalizing the Financial and Housing Market
http://ochousing.blogspot.com/
Insert obligatory “don’t drop the soap” comment here....
It was bigger and deadlier than the Great Chicago Fire too.
http://en.wikipedia.org/wiki/Peshtigo_Fire
How interesting that they are naming their new project after a fire. I’m sure they mean to link it to the name of the street, but the first thing that came to mind for me was fire. Maybe people outside of Wisconsin don’t know anything about the Peshtigo fire...it’s one of those things Wisconsin kids learn about in elementary school. If I recall correctly, it happened on the same day as the Great Chicago Fire in the 1870s.
“I will be driving and think of something posted or a picture will pop in my head and I just crack up.”
When I was writing this post, I kept cracking up every time I saw the picture of the old lady giving the bird.
But ... once you start down the dark path, forever will you walk.
You might even wake up one day and find yourself a Realtor
.
I think the intent of it being a joke is obvious from the parenthesised comment about abusing your power. It’s a colorful commentary on how out of whack the market was when it was at it’s frothy peak.
Hey Roc,
Didn’t you post the exact same comment on the OCRegister site? Cut and paste your judgements about other people somewhere else.
Great blog Irvine renter. I will be driving and think of something posted or a picture will pop in my head and I just crack up.
There was a lot of fraud in Fountain Valley over the last couple of years and it is great to see these houses getting foreclosed on. Some of the houses I would have loved to of bought for my family at an affordable and logical price but fraudsters beat me to them. The tide has turned.
Lee
I live in TR. We decided to stay put because it was cheaper to put the money into the remodel than to pay the realtors, fees and taxes. Plus now we have the home we wanted and we don’t have to worry about shoddy workmanship.
My concerns with IR’s current post are that IMHO at no time should either party to a transaction act in a manner that is insulting or abusive.
I realize that there are a lot people out there who are complete assholes… they’re not hard to meet.
Now, I guess IR meant this to be a joke? Still, I think that was a bit in poor taste.
I haven’t heard any instances of Sellers demanding letters. I’ve heard numerous of Realtors(tm) suggesting letters.
Thank you for all the replies to my question. I guess the best thing to do is to sit and wait until I find the dream home + dream deal, since there is no guarantee that I will get the full deposit back. However, I’ve looked at some of the homes in Irvine, and it seems like the prices are dropping but not by a whole lot, especially if the home in question is a nice one. It seems like waiting may also have its setbacks if someone else comes along and buys it while I’m still waiting for the price to drop some more. Wow, I’m just not sure what to do. Wait a little longer, I guess, but for how long...? My cousin is a realtor in northern california and she has done some comparables on certain homes in Irvine that my family and I may be interested in, and the comparables are still pretty pricey… For a 30-40 year old single story home about 1500 sq ft, the price is still about $670,000-690,000 in Irvine, per my cousin. That’s pricey. :(
This was a difficult post to write because the line between the real advice and the sadistic schadenfreude is intentionally blurry. If the sellers had not been so ridiculous during the rally and asked people for letters and pulled antics like that, upon reading this post, people would have seen the clear line between right and wrong and real and funny. However, since the sellers did behave the way they did, the ridiculous advice doesn’t look quite so far fetched. Sellers blurred the line, and I have merely exposed what they did by proposing to do the same.
You guys are taking that section way too seriously.
I will try to reach our escrow office this afternoon and see if I can be more specific. I know on some of the deals I have seen, even if funds have been released from escrow to the seller, the buyer can usually get this money back if the deal is not closed.
that is too funny bc it’s too true.
Why not go it without a supposed buyer’s agent?
I think you are mistaken in thinking that any realtor would be embarrassed by being caught in a lie.
The caption for the picture of Darth Maul says its the devil. However, that is not the devil and merely a Sith Apprentice. But for the topic on hand, thinking like a Sith isn’t a bad way to go!
I don’t intend to be sadistic, I don’t care one way or the other about a seller’s emotional state.
I care only for my own financial condition, which is my problem. The seller’s emotions are HER problem, and not my concern, and neither is her financial condition.
I will just do what I did in 2003, 04, 05, and 06, which is submit offers that I believe the place is worth, based on local fundamentals: and what I am willing to pay for the place.
The only diff is that my offer is now a lot more likely to be accepted. Every other offer I made was rejected.
Dangerous advice. The truth is the seller will be entitled to keep some portion or all of the deposit as liquidated damages under the standard form sales contract. This is especially true if the buyer tells the seller the reason they are canceling is that they found a better deal elsewhere.
How does one find buyer’s agents? What makes them different?
It is very difficult for a seller to keep an escrow deposit, even if you have signed a document saying they can. The escrow may get tied up in lawsuits for a while, but you will almost always get your money back.
Speaking of schadenfreude…
http://www.mortgagefraudblog.com/
Central clearninghouse for information on recent mortgage and fraud schemes, indictments, and prevention
Irvine Renter, I’m confused. You mentioned that the buyer can tell the seller that he saw a better offer about 1 week prior to closing. If the buyer did indeed see a better bargain, can a buyer still back out of the sale at that late in the process and still get the down payment back?
Two things.
One, am I the only that actually inspected immediately before the closing meeting? Is that unusual? It didn’t seem so to me but this was the first home I’ve purchased. I met the seller at the home, we walked through it and then went to the closing.
Two, while I think perhaps some people are reacting to IR’s hilarious “tough” suggestions let me put this forward. It is true that two wrongs don’t make a right however, I think all of IR’s serious suggestion are far from wrong in any way. It’s not a matter of retribution it’s balance. The balance has, for years, been far out of whack. That prices are where they are is evidence of this. Until and unless prices and commissions get to a point where are reasonable then the least you can do, for yourself as buyer, it take some of IR’s serious suggestions and run with them. As I said, I don’t know much about real estate but those suggestions are just business. The seller always has the option of saying no to you if they feel you aren’t the type of buyer they want to deal with.
As much as I love this blog, I disagree with this posting. It’s too complicated. Here’s what I think would suffice, and by the way it worked for me when I bought in places where there were so-called bidding wars.
1. Never fall in love with a house, and make sure the seller’s agent knows it. Be polite, and if you’re interested then say so. But no emotionalism, either interally or externally. If you’re not prepared to walk away, then you’ll pay too much.
2. Have a firm budget before you start looking, and stick with it. This means getting pre-qualified for a mortgage, with all the financial calculating that this entails. Think in terms of a 30-year fixed rate mortgage, and a monthly payment no more than 35% of your gross monthly income, and preferably much less. Along those lines: Do not fall for the old chestnut about a big mortgage being good because of the tax deduction for interest. Uncle Sucker might have 30% of your interest, but guess who pays the other 70%? A smaller mortgage is a better mortgage.
3. Make your sweet spot about 10% below budget. That way, you can have some flexibility. To the seller’s agent, represent your sweet spot as your budget ceiling, the reason being that a realtor will ALWAYS try to bump you upwards.
4. Aggressively check comparable sales prices and the ratio between asking and selling prices. Realtors play around with these by concealing whether a particular property has gone off the market and back on, so you’ll need to do a lot of homework, especially in a falling market.
5. These days, whatever you see for sale today is probably going to be much cheaper in another year, so if you can rent rather than buy for the time being, that’s the way to go.
6. Negotiations are a bunch of b.s. In rising markets, I never once fell for the bidding wars. I remember twice literally turning on my heel and walking away, and in one case having a realtor chase me begging me to come back. The only negotiations I ever did, either as a buyer or a seller, involved correcting issues revealed by inspections. On either side of those transactions, the rule is simple: The seller pays 100% of the cost of fixing inspection issues not disclosed up front. Period.
Lenders do little for strapped subprime homeowners
http://www.reuters.com/article/bankingfinancial-SP-A/idUSN2126672920070921?pageNumber=1
Moody’s Investors Service said banks eased borrowing terms on just 1 percent of subprime mortgages with interest rates that reset higher in January, April and July.
...
It said that “only recently” have servicers begun to modify more loans to help homeowners avoid foreclosures, “despite much industry dialogue and heavy press attention” on the problem.
Hate or humor. I suppose it depends on the individual.
http://www.irvinehousingblog.com/2007/06/11/the-reservoir-of-schadenfreude/
OT, but did anyone see Family Guy last night? LMAO. The Los Angeles real estate market turns up everywhere.
Good post IR. I wonder how long it will take for this to be reality, hopefully not too long.
Adam,
I was fully aware that IrvineRenter was being humorous. However, the fact of the matter is that sellers’ demands for these letters was dead serious, and it made me sick.
The fact that I called IrvineRenter a sadistic bastard should have tipped you off that I didn’t miss the joke. We all know IR isn’t sadistic. Enjoying a little schadenfreud with your morning coffee doesn’t make you a sadist.
Is it just me or do other readers of this bog see a constant amount of hate on a daily basis here.
I believe that a minority of those here are so full of rage that they would like to see our entire county, state and even nation, completely disintegrate to satisfy their bottomless pool of schadenfreude.
I believe some want the market to come down so they can jump in – and I have no issues with them.
It is the ones who go beyond this – way beyond this – that are so disturbing.
So, to those of general goodwill who merely want to find a home they can afford: I wish you the very best – sincerely.
Suddenly a Good Bear Is Hard to Find as Stocks Rise (Update1)
http://www.bloomberg.com/apps/news?pid=20601109&sid=aWu8b4y2Ixs0&refer=home
`End of Story’
``Housing just doesn’t matter for the S&P,’’ said Bianco, the New York-based strategist for UBS. ``End of story. The concern about the spillover and what it means for energy companies, tech companies, industrial companies’’ is overblown because they benefit from global growth.
Agreed. If the seller has met every deadline, you can’t arbitrarily pull out of the deal.
I would suggest avoiding a buyers agent altogether. Everything you need to find property is right at your fingertips anyway. I have always gone direct to the selling agent.
Without exception, the agent has quickly gone from anticipating a double-ended deal to supporting a price reduction. Dealing direct saves a lot of time (days over the life of an escrow)by eliminating one person to relay messages through. This approach is not for everyone, you need to be able to submit an offer by yourself, be knowledgeable about the process and you need to meet every deadline for contingencies, etc.
No need to “screw” anybody, it is possible to