Saturday, December 02, 2006

Quote of the Week

"The days when real estate agents were the gatekeepers for the housing market have gone the way of typewriters and printed MLS books. The key to coping in today's online housing market is to provide as much information as possible and let the consumer decide."

-Steve Brown, Dallas Morning News


karl marx brothers said...

real estate agents; declining in value & necessity like travel agents, car salesmen, lawyers, mother-in-laws . . .

ok, the last one was just wishful thinking, but one can still hope!

karl marx brothers said...

by the way, hey Lander , are you having server or sofware problems?
the comments section seems to be hard to reach sometimes.

good work none the less. appreciate all yer hard work!

JR said...

It is amazing the amount of trasparancy in the real estate market these days. It is very easy to see the sales comps, track listings, sort by size and price. The Sac Bee has all the MLS listings in sortable form and sale comps listed by their streets. has all the distressed properties selling at the courthouse steps.

There is a nice lot in Auburn I really like and it was listed for $359,000 in April 2006. I offered $300,000 and the agent said the buyer declined. Then the price dropped to $329,000 about 60 days ago, and last week the price went to $309,000. And now the real irony..... a lot around the corner (on Sunrise Vista) showed up on to be sold on the courthouse steps for $142,000 next week. Hmmm. The days of agents leading buyers around by the nose are long gone. I know which property I would rather buy. None of the later information I gathered above required me to talk to an agent.

karl marx brothers said...



Woe to the poor real estate agents as their world comes crashing down.
Daggummed Internet & Newspaper just puttin an honest man outta work.
and him with a new washin machine n fancy motorcar totin the note.
Whats this world commin to, I ask you . . . ?

might even drive a feller back to the snake oil n tonic water bidness.

(I bet Gwynster was able to gather a lot of info on her pending auto purchase WITHOUT being held hostage in the dealer showroom)

Merced "Going Quickly" said...


I think this quote from the Modesto Bere story deserves mention, also.

"We paid 37 percent more than what our home is worth now"

Gwynster said...

Lots of transparency out there! Anyone claiming they were uninformed about their loans, the market, etc. as a means of getting out of their contractural obligations is high. It's all online and easy to find.

Mr. Gwynster and I went out looking at new homes today in Natomas. One of the salespeople admitted all they've been seeing lately people with really damaged credit amd no doc loans to stretch affordability.

We even got chatted up by other brokers right outside the sales offices trying to get some business. And all the for sales in Natomas?! holy cow.

We were just looking at the different models to see which ones we wanted to bid on in 2 or 3 yrs. Lenner was running a special $8000 off closing if you used their lender. Mr. Gwynster almost laughed in the nice lady's face as he read the terms (1 point origination fee, courier fees, administration fees, yada yada yada).

BTW I also skipped on the new car. It's so much easier and cheaper to keep driving my current car which is still in fabulous shape >; )

Lander said...

KMB-Thanks for the info. Could you be more specific? I've noticed that sometimes the word verification image does not appear, so commenting is not possible. By the way, SL is hosted by Blogspot (Google), so I have little control over glitches.

TS said...

I don't think buyers agents will go away entirely.Too many people lack the time and knowledge to shop wiselyfor a home,and many people are afraid to make a bad decision when so much is at stake.they want someone to hold their hand,and seek the reassurance a "professional" can provide.unfortunately they are frequently assured that indeed "my grandma IS a virgin" by realtors.more transparency,and enforcement of the laws and regulations is a necessity.

JR said...


You are absolutely correct. Good, solid agents who add value to a clients experience will always be in demand.

The day of the fraudulent Realtor hawking overpriced, ever increasing real estate to greater fools who can not afford it, should be over.

dvb said...

Gwynster, the gf and I were also out at Lennar yesterday! I've got to be honest -- I almost bit. I know JR's right when talking about holding off for at least a year but I'm worried about long-term rates with all of the questions that are being asked of the dollar and I'm tired of our apt. Though I almost laughed when the lady told us Lennar wanted to raise prices next year.

Where can I find good information on mortgage closing costs? I've read a ton of real estate books but the $8,000 off closing sounded reasonable to me so I'm still a fool, I guess. I'd like not to be one.

patient renter said...


In my opinion: even if interest rates are raised a bit, there is still a lot of drop left to come in the value of homes which will more than make up for any interest rate hikes to come in the next year or two. Use a loan calculator to do some scenarios for where interest rates might go and where home values might go. You'll see it's best to wait it out some more.

AgentBubble said...


Here's an example to consider:

Let's assume you were to buy a $500,000 house. The ever astute Michael Lyon of Lyon Realty said he thought prices could drop as much as 10% for our region during 2007. Let's assume they only drop 5% for 2007. That's a $25,000 price drop in one year.

You can get a good loan at 6.25% without all the junk fees a lot of lenders toss in. I'm talking points, origination fees, etc. Principle and interest are about $3079/mo at this interest rate. Now, let's assume you waited a year and interest rates went to 8.25%. Your payment would now be $3756, an approximate $700/month increase. So, you can buy today and lose $25,000 over the course of a year if there's a 5% drop in 2007, or you could wait a year and buy in 2008. If you did that, it would take about 3 years of an 8.25% interest rate to make up for the $25,000 loss had you bought today and saw a 5% drop over the next year.

Lots of assumptions. But, you have to ask yourself what is more likely to happen? Remember, if interest rates do go up, they affect everyone, not just you.

JR said...


Agent Bubble is correct. All this non-sense about appreciation is rediculous. The market is much more likely to revert to the mean. DR Horton IS pulling out a lot of stops and reducing prices to move standing inventory. But remember, building costs are DROPPING. Lumber is down 50%. Lennar is pressing subs for 20-30% reductions.

You have seen what the homebuilders have done to the Flippers in Trouble (price below recent sales). If they can build for less, and make a profit selling below the recent comps, what do YOU think they will do.

And interest rates? We are headed for a big recession. The only way interest rates go up is thru devaluation of the US dollar. Then, if that happens, you won't want to own ANY real estate, as it will drop 50% or more.

So what to do? Well, I am renting, banking the $3,000/month cost difference in buying, loving my new home (owned by a "FIT") and having a great time waiting for the rest of the correction to play out. Spring will tell if I am right, but the chance of ANY APPRECIATION in Sacramento is ZERO in 2007. That is the bottom line.

AgentBubble said...

JR, we should start a page dedicated to those of us renting from flippers in trouble. The guys we are renting from are taking a $3000 a month hit every month. They bought in June of 2004 and would break even if they chose to sell today (assuming they could sell).

patient renter said...

One more comment about interest rates since we're on the subject...

Dean Baker at the Center for Economic and Policy Research just published a paper estimating an drop in interest rates in 2007.

"However, it is likely that it will begin dropping rates in its first meeting in 2007 and will lower them by 1.0-1.5 percentage points over the course of the year."

JR said...

Agent Bubble,

Yes, it is amazing how stuck some FITs are these days. If they used 100% financing, they have to write a big check to sell. If they don't sell, they get to write a lot of small checks ($3,000 is small?) every month for 60 months or more and still write a big check to sell. Hmmm. Specuvesting is not for me.

Davy Bui said...

jr, et al,

Thank you for your remarks.

The devaluing dollar is precisely what I am worried about. I am no economist and don't pretend to be -- I'm just trying to figure out what to do in my situation.

The housing bubble seems to have spawned a menacing credit bubble. What happens when those resetting loans get defaulted on and people start walking away? Even if the Fed cuts rates short-term, are long-term rates going to follow or will (foreign) investors finally balk at extending credit to a nation who refuses to save and is in foreclosure?

If the Fed cuts rates and puts more money in the economy to "rescue it" like they did last time, wouldn't it make sense to buy a house soon and pay it off with "worthless" (inflated) dollars and put all other money into other currencies, gold, etc?

I'm 30 years old looking for my first house and it seems like a mistake here can really set back my financial future for a long time to come.

So many questions...I really appreciate blogs like this one, Max's FIT, and others for helping blaze a trail through this mess.