Real Estate: "People Quit Doing Math..."
SoCal Mortgage Guy has a great post over at his site. Well worth the read...
excerpts:
"The problem came the past 5 years when if you waited a year or heaven forbid TWO years, you either lost 100k+ in ‘appreciation’ or became priced out ‘forever’."
"What most people didn’t realize is that they were competing with the rest of the masses who were also rushing to buy, buy buy…at whatever costs."
" The lenders were all too willing to ‘help’ people ‘afford’ the ‘American dream’. Don’t make enough…state your income". "Don’t have a downpayment, no problem…you don’t need it. Heck, we will even give you 3-25% at closing to help you pay closing costs and even furnish the place. Have a BK, don’t worry…we won’t hold that aginst you. Want lower payments until you get promoted, make more money, or win the lottery…we have I/O and neg-am. You need to buy TODAY because prices are going up…look how rich everybody else is getting."
"It is at this point that I loved to ask people: “what happens if property doesn’t continue to keep going up?” You would have thought I just gave the Pope ‘the finger’ the way people would look at me. Heaven forbid this guy actually question the appreciation of housing, but he muttered the ‘R’ word at the same time. What do you mean it can make more sense to RENT than to buy?"
Read more...
posted by Athena @ 12:31 PM
6 Comments:
no income,no asset subprime loans are even more fun!check your e mails re 660 e mac.
{{"The problem came the past 5 years when if you waited a year or heaven forbid TWO years, you either lost 100k+ in ‘appreciation’ or became priced out ‘forever’."}}
Now, the problem is getting rid of the overpriced house that you just had to have. You need to heed the practical advice of your honest, trustworthy Realtor®. Putting your house on the market a month too late, or setting the price way too high, can be fatal:
***
CNBC aired a brief interview with the National Ass. of Realtors President, Thomas M. Stevens on Wednesday morning in which it was revealed that Stevens has had his home on the market for roughly a year.
Aside from appearing uncomfortable, Stevens seemed slightly at a loss for words, attempting to explain his own personal experience of the housing slowdown with some frail reasoning concerning his traveling and being unable to follow the good advice of his Realtor.
In that article, Stevens seems to express the sentiment of a novice seller rather than an industry veteran when recounting his experience.
"Who knew last September how long this down trend was going to continue," Going on Stevens states "You need to adjust the price. . . . But I didn't do that. And my house is still on the market."
"What I should have done, was listened to my agent and cut the price by $50,000 to $100,000 early on, and the property would have sold last October."
Better yet "I should have listed it a month earlier."
http://paper-money.blogspot.com/
even houses priced $20k less than the latest comp are sitting on the market with no offers,this would be the under $650k segment.there was a truly inspiring loan broker on ksro this morning extolling reverse mortgages.he glossed over the roughly $17k cost of obtaining what amounts to a $372k credit line,but neglected to mention that these are arms...pegged to a highly volatile index with a big margin..."really there is no downside to these loans " he stands to make a referral fee of roughly $18oo per loan,but it is called something else to avoid problems with RESPA.while these loans are less horrifically bad than they once were the costs are excessive,and they are suitable for only a few.i hate these creeps.
I can't believe that bit about NAR President Stevens.
Please forgive me, but is "loser" too strong a word to describe him?
I really like the part about "Who knew last September how long this down trend was going to continue...(?)"
That sounds like a complete rookie. As if, like many in his association and industry, he completely bought the Learah Kool-Aid these last few years.
That NAR is truly a cult.
I heard a story about a local FB. Apparently a local Joe had a house that was paid off and of course had "risen in value" and he HELOC'd the hellout of it to buy real estate in another bubbly state and is now in trouble. He can't flip the houses in the other state and the carrying costs are killing him and he is pretty darn close to losing his house.
I have to say, hearing about this particular FB, I was shocked to learn this guy was swimming nekkid. He is not someone I would have thought would have been so foolish. i think we are all in for some surprises like this.
there are going to be a lot more people like this,i was absolutely shocked to discover how many people in the real estate biz have bought with neg am loans and 100% financing.as far as the math,a neighbor put their home on the market(too high) and i did the math...if they GAVE me their house,and the assessor valued it at their asking price,taxes and insurance would be 80% of what i pay on a one year lease...just the taxes and insurance,no maintenance. this is not difficult math for anyone past the age of ten.
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