Need a realtor to sell a home in this market?

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glennds
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Re: Need a realtor to sell a home in this market?

Post by glennds » Thu Apr 15, 2021 5:16 pm

20 city composite Case-Shiller index

What's your interpretation of what it says and why? Anyone?
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Re: Need a realtor to sell a home in this market?

Post by D1984 » Thu Apr 15, 2021 8:41 pm

tomfoolery wrote:
Thu Apr 15, 2021 12:21 pm
D1984 wrote:
Thu Apr 15, 2021 12:33 am

Unemployment in Las Vegas is (as of Mar 2021) is 9.3%. It is nowhere near 30% It was around 28% or 29% IIRC back in April 2020 but you are almost a year out of date if you think it's anywhere close to 30% now.
You're correct. The official U3 numbers are around 9% for Vegas. And the official CPI-U is hovering around 2%.

I don't know why I thought unemployment is 30% and Inflation is 15%. I think QAnon has gotten to my grocery store, landlord, health insurance company, gas station and gun store.
If you want to state that your personal CPI is higher than 2 or 3% then that's a fair assertion (although IIRC you live in California.....and one of the reasons the cost of living is so high--and rising--there is the lack of housing supply and this reflects in both housing prices and rents; the Fed didn't really have anything directly to do with that....Yellen or Powell can't just order California to build a few million more homes); although my own "personal" CPI for my cost of living is nowhere near 15% I am not in your shoes so I can't judge your situation. If, on the other hand, you want to start pulling out stuff from Chapwood or (God forbid) Shadowstats to "prove" how inflation is really in the low double digits then I'm not even having this discussion with you seeing as how both have been thoroughly debunked plenty of times online and all you need to do is use Google to find said debunkings.
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Re: Need a realtor to sell a home in this market?

Post by D1984 » Thu Apr 15, 2021 9:32 pm

tomfoolery wrote:
Thu Apr 15, 2021 12:55 pm
Tortoise wrote:
Thu Apr 15, 2021 12:45 pm
tomfoolery wrote:
Thu Apr 15, 2021 12:21 pm
You're correct. The official U3 numbers are around 9% for Vegas. And the official CPI-U is hovering around 2%.

I don't know why I thought unemployment is 30% and Inflation is 15%. I think QAnon has gotten to my grocery store, landlord, health insurance company, gas station and gun store.
There are simple substitutions for all of those things.

Forage and grow your own food instead of shopping at a grocery store. Build your own house out of sticks and mud instead of renting from a landlord. Stay healthy so you never need health care. Walk instead of driving a vehicle. Carry a big stick instead of a gun.

If you make all of those simple substitutions, you reach the correct conclusion that inflation is quite low, which agrees with CPI-U.
Can you recommend something other than sticks for housing and self defense? Lumber is up another 20% month-over-month.


https://fred.stlouisfed.org/series/WPU081

Producer Price Index by Commodity: Lumber and Wood Products: Lumber



https://fred.stlouisfed.org/series/WPU083

Producer Price Index by Commodity: Lumber and Wood Products: Plywood


Did I really need to pull out data from the Federal Reserve (or if you don't trust them, then from the private free-market company Random Lengths Publishing/RISI which maintains various lumber price composites going back to the early 1980s) simply to show that:

A. Lumber price spikes are nothing new (you should see the one from the early 1990s...about as big if not bigger than the one today...at least so far), and,

B. Just because lumber is up some high amount it doesn't mean CPI (or prices overall) are up nearly that amount. In fact, for the spikes in 1969, 1983-84, 1991-late 1993, 1999 (for plywood in particular more than lumber in general in this case), 2003-04, and mid-2016 to mid-2018 CPI was only up single digits on an annual basis every time despite lumber price spikes in the mid to high double digits or even (as per the Random Lengths lumber index....not the various lumber producer price indexes from the Fed....although even those indices showed a pretty big spike) going up enough to nearly triple; the Random Lengths Composite did indeed almost triple during the 1991-1993 spike. Heck, if you look at the Fed data for lumber prices from Sept 1979 to late 1991 it was roughly flat over the whole time frame despite prices overall (as per the CPI) going up almost 85% during this same period.

Bottom line: One item increasing sharply in price over one given period (and that historically has then--as supply catches up with demand--made up for the spike by either decreasing sharply over the next year to three after said spike, gradually drifting slowly downwards for the next 3-6 years after the spike, and/or remaining flat for the next 7-15 years after the spike) does not double-digit inflation of the CPI make. Unless one is a termite, the huge majority of their consumption basket is not lumber or wood.
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Re: Need a realtor to sell a home in this market?

Post by boglerdude » Thu Apr 15, 2021 11:52 pm

Fun n'games till the commies say you cant evict anyone
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Re: Need a realtor to sell a home in this market?

Post by Maddy » Fri Apr 16, 2021 6:48 am

Google "opportunity zones." Investors are buying exactly where they are directed by the central planners, who are giving them massive tax breaks to play by the rules.

As for real estate brokers, I have no use for them. My recent experience in two successive transactions convinced me that when hiring an "agent," you've just complicated the deal by bringing in a third party who will be pursuing his or her own interests and who at times may be acting in a manner directly opposed to the interests of his or her supposed principal. Who needs that?

Example: Realtor agrees to represent seller for a 6% commission. Within 24 hours, Realtor brings in a potential buyer, announcing (pursuant to the listing agreement) that he is now a "dual agent." All of a sudden, Seller has no one is looking out for his interests--although that was Seller's principal motivation for having an agent in the first place. Realtor presents an offer on behalf of Buyer that is clearly antagonistic to the best interests of Seller and that contains an unfavorable "feasibility contingency" clause (essentially a free option--an unconditioned "escape hatch" that ties up the property) that obviously was the brainstorm of Realtor. Seller is on his own for purposes of evaluating this offer and encounters multiple failed attempts to elicit Realtor's cooperation (or enthusiasm) in negotiating something more favorable. From Seller's perspective, Realtor is now working for Buyer, and Seller is now negotiating against not one, but two, different adversaries--one of whom knows all of his "secrets." Within the next 24 hours, a second buyer appears on the scene--a situation that gives rise to the possibility of a bidding war. Realtor withholds that information from Seller, only later admitting that to entertain a second offer while the first one was pending would have put him in a position of "conflict" vis-a-vis the first buyer.
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Re: Need a realtor to sell a home in this market?

Post by WiseOne » Fri Apr 16, 2021 9:15 am

Yup, you got it Maddy. I love that the apartment purchase we're heading into now involves no one else except our attorneys (sort of optional) and the seller's daughter, who is an attorney. It'll be refreshing compared to the usual web of brokers and bank mortgage agents.
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Re: Need a realtor to sell a home in this market?

Post by glennds » Fri Apr 16, 2021 9:58 am

Maddy wrote:
Fri Apr 16, 2021 6:48 am


Example: Realtor agrees to represent seller for a 6% commission. Within 24 hours, Realtor brings in a potential buyer, announcing (pursuant to the listing agreement) that he is now a "dual agent."
In most states (mine at least), dual agency requires a whole separate sign off and acceptance by the represented client. It's not baked into the mls standard listing agreement, it is a separate form. Your warnings about the risks and conflicts inherent in dual agency are absolutely valid, and very good advice. But the realtor cannot simply announce it, you have to agree to it and for all the reasons you point out, clients should politely refuse.

If it's my listing, one thing I like to do if presented with a dual agency announcement is propose taking the listing away from the realtor so they can represent the proposed buyer with no conflicts. Do it enthusiastically and magnanimously, as in "hey, I have a great idea"... my new realtor and I will look forward to your offer. The look on the would-be dual agent's face is usually priceless.

This said, for many people the guidance of a good realtor is an important protection. It's not really fair to imply that they are all worthless or unnecessary. There are many aspects of real estate transactions that require some technical knowledge and DIY may not be suitable for all. If no realtor, at least having an attorney look over one's shoulder is a good idea.
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Re: Need a realtor to sell a home in this market?

Post by Maddy » Fri Apr 16, 2021 3:44 pm

glennds wrote:
Fri Apr 16, 2021 9:58 am
If it's my listing, one thing I like to do if presented with a dual agency announcement is propose taking the listing away from the realtor so they can represent the proposed buyer with no conflicts. Do it enthusiastically and magnanimously, as in "hey, I have a great idea"... my new realtor and I will look forward to your offer. The look on the would-be dual agent's face is usually priceless.
That's a very good idea.

If I were to do it again, I'd make known from the outset that I'm bargaining for an agent--not a salesperson--and that if a potential buyer calls the realtor directly, the buyer should politely be referred to another brokerage.

Unfortunately, too many realtors have come to view the dual agency situation as ideal, and to regard the consequent conflict as normative. In some states, brokers' associations have actually lobbied their legislatures to dispense with the term "agent" and to replace it with the term "broker." Since the term "agent" implies fiduciary duties, this is usually a prelude to a related legislative effort to dispense with fiduciary duties entirely. So as far as I'm concerned, they've earned their reputation and no longer deserve to be regarded as professionals. They're salespersons, and their business is an "industry."
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Re: Need a realtor to sell a home in this market?

Post by vnatale » Wed Jun 23, 2021 7:52 am

Look at the front page article in today's Wall Street Journal regarding home prices!
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Re: Need a realtor to sell a home in this market?

Post by WiseOne » Wed Jun 23, 2021 9:14 am

Wait a second....

The broker fee is paid by the seller, not the buyer. If the agent/broker is representing both the seller and buyer, would the broker not want to maximize the sale price (benefiting the seller) regardless?

The most likely person to be screwed in this situation is the buyer, because the broker will not be at all motivated to negotiate for a lower price. It doesn't take a rocket scientist to understand that, but unless there's a clause about conflicts of interest like this in the buyer's contract there's nothing the buyer can do about it. Sounds like the solution, if you're buying, is to put a clause into the contract to the effect that if the broker is representing the seller, the buyer has a right to bring in an independent broker to negotiate with seller.

Or did I miss something?
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Re: Need a realtor to sell a home in this market?

Post by pp4me » Wed Jun 23, 2021 9:27 am

If you have your own agent as the buyer what incentive do they really have to bargain for a lower price since they would be lowering their own commission.

When I bought my house in 2006 agents were the ones telling you to offer more than they were asking.
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Re: Need a realtor to sell a home in this market?

Post by I Shrugged » Wed Jun 23, 2021 11:59 am

We have been on both sides of dual agency transactions. The conflicts of interest are obvious and uncomfortable. We think we got a bit taken advantage of when we were the sellers, and it turned out that the buyers were good friends of the agent.

Now, we were adults and we made the decisions during negotiations that led to a sale. But you still rely on the advice of the agent in coming to decisions. And if they aren’t really working just for you….
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Re: Need a realtor to sell a home in this market?

Post by Kriegsspiel » Wed Jun 23, 2021 1:29 pm

vnatale wrote:
Wed Jun 23, 2021 7:52 am
Look at the front page article in today's Wall Street Journal regarding home prices!
LINK OR GTFO
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Re: Need a realtor to sell a home in this market?

Post by Kriegsspiel » Wed Jun 23, 2021 1:34 pm

WiseOne wrote:
Wed Jun 23, 2021 9:14 am
Wait a second....

The broker fee is paid by the seller, not the buyer. If the agent/broker is representing both the seller and buyer, would the broker not want to maximize the sale price (benefiting the seller) regardless?

The most likely person to be screwed in this situation is the buyer, because the broker will not be at all motivated to negotiate for a lower price. It doesn't take a rocket scientist to understand that, but unless there's a clause about conflicts of interest like this in the buyer's contract there's nothing the buyer can do about it. Sounds like the solution, if you're buying, is to put a clause into the contract to the effect that if the broker is representing the seller, the buyer has a right to bring in an independent broker to negotiate with seller.

Or did I miss something?
The price paid is ultimately on the buyer, not the buyer's agent. If the price seems too high, don't buy it. If it seems reasonable enough, then buy it. I'm aware that some people just ask their agent to negotiate for them, but if you do that then it's kind of a bitch move to blame them for not negotiating good enough.
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Re: Need a realtor to sell a home in this market?

Post by Kriegsspiel » Wed Jun 23, 2021 1:39 pm

vincent_c wrote:
Wed Jun 23, 2021 10:38 am
Does everyone in the US get 30 year fixed mortgages or are variable rates still competitive?
As far as I know, most people get a 30 year fixed. I know a few people who got 15 year fixed. I might have heard of it before, but it's so rare that I can't recall anyone who got an ARM.
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Re: Need a realtor to sell a home in this market?

Post by Kriegsspiel » Wed Jun 23, 2021 2:49 pm

vincent_c wrote:
Wed Jun 23, 2021 1:55 pm
Kriegsspiel wrote:
Wed Jun 23, 2021 1:39 pm
vincent_c wrote:
Wed Jun 23, 2021 10:38 am
Does everyone in the US get 30 year fixed mortgages or are variable rates still competitive?
As far as I know, most people get a 30 year fixed. I know a few people who got 15 year fixed. I might have heard of it before, but it's so rare that I can't recall anyone who got an ARM.
I'm curious about the talk about mortgage backed securities above. Would a basket of mortgage backed bonds with a 30 year duration perform similar to LTTs?
Since mortgages can be refinanced when interest rates fall, I'd imagine that they would not be too similar.
In summary, when interest rates decline, a mortgage security tends to go up
in price by a lesser amount that a similar maturity bond because the expected
maturity of the mortgage becomes shorter. Conversely, when interest rates
increase, a mortgage goes down in price by a greater amount than the bond
because the expected maturity of the mortgage becomes longer.

The magnitude of this unbalanced price volatility characteristic is measured
by a financial statistic called “convexity.” Specifically, if interest rates go
down and a debt instrument like a mortgage goes up in price by less than it
goes down in price when interest rates go up, it is know to be negatively
convexed. When the opposite price effect is the case, it is known to be
positively convexed. The best known positively convexed securities are the
U.S. Treasury bonds that are not callable. The most well known negatively
convexed securities are residential mortgage securities. link
If you are really curious, then you might want to read American Bonds, by Quinn. It has some interesting bits in it:
Because the Pfandbriefe could be redeemed or sold at any point, it was more liquid than a mortgage- "the perfect type of secure investment," according to a Landschaft director from Berlin. During the Napeolonic wars, when the Prussian government defaulted on its interest payments, the Pfandbriefs traded at a value higher than that of government bonds

Built for stability, the Landschaften never promised windfall gains for investors. The Pfandbriefe bore a decidedly unsexy return of 3 to 4 percent interest. "The Germans prefer to sleep well rather than to eat well," explained one lecturer. Another speaker claimed that the system was "free from every tendency to profit making." With the community organizations overseen by the king and government employees at the helm, the Landschaften subordinated individual profits to community well-being.
and
When discussing the new mortgage-backed security, bankers argued that investors would rather buy Treasury securities than this new instrument and asserted that they would only invest in it with some kind of government guarantee. A second guarantee was therefore added to the pools. In addition to the FHA and VA guarantees of loans going into the pools, the return of principal and interest of the pool itself would be guaranteed by the US government.
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Re: Need a realtor to sell a home in this market?

Post by vnatale » Wed Jun 23, 2021 9:41 pm

Kriegsspiel wrote:
Wed Jun 23, 2021 1:29 pm

vnatale wrote:
Wed Jun 23, 2021 7:52 am

Look at the front page article in today's Wall Street Journal regarding home prices!


LINK OR GTFO


I just only it described on C-Span. I do not have a subscription so I cannot get at it. I know that some people here do have access to the Wall Street Journal.

Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Need a realtor to sell a home in this market?

Post by Kriegsspiel » Fri Jun 25, 2021 3:53 pm

vincent_c wrote:
Thu Jun 24, 2021 12:40 pm
Is there still a way to "house hack" in the US to apply these subsidized loans to rentals?
Kind of what tomfoolery was saying, but you "strip the equity" from the outset by using a 3.5% FHA (or 0% down VA or USDA) loan subsidized/guaranteed by the federal government to buy a multi-family property. Live in one of the units, and collect rent from the others.
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Re: Need a realtor to sell a home in this market?

Post by glennds » Sat Jun 26, 2021 10:26 am

vincent_c wrote:
Fri Jun 25, 2021 11:42 pm


For example, how are institutions qualifying for residential mortgages, ....?
They're not. It is estimated that in the six months prior to May 2021, institutional buyers dropped $77B in single family home purchases. I promise they were not doing this with conventional mortgages like you or I would do. They are using institutional investment capital on a very large scale. In some cases sovereign wealth funds are investors.

https://therealdeal.com/2021/05/21/inst ... ly-market/
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Re: Need a realtor to sell a home in this market?

Post by I Shrugged » Sat Jun 26, 2021 6:27 pm

I know quite a few people who have made themselves nicely comfortable by buying and renting houses and small plexes. It’s as old as dirt. The tax code is very favorable if you actively manage. You get business deductions. Including health care. You can start this business without a lot of capital. It can’t be exported to China. The business plan is well known. If you get to critical mass, you can quit your day job.

It’s actually surprising that the institutions have only now jumped into it. Nevertheless, this is a perfect business for an enterprising person.
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Re: Need a realtor to sell a home in this market?

Post by glennds » Sat Jun 26, 2021 9:51 pm

vincent_c wrote:
Sat Jun 26, 2021 6:44 pm
I Shrugged wrote:
Sat Jun 26, 2021 6:27 pm
I know quite a few people who have made themselves nicely comfortable by buying and renting houses and small plexes. It’s as old as dirt. The tax code is very favorable if you actively manage. You get business deductions. Including health care. You can start this business without a lot of capital. It can’t be exported to China. The business plan is well known. If you get to critical mass, you can quit your day job.

It’s actually surprising that the institutions have only now jumped into it. Nevertheless, this is a perfect business for an enterprising person.
I don't see real estate as a good business relative to other businesses. It's far better to produce something with a healthy profit margin and then leverage those returns than subject your business to the whims of a wider market. The entire investment model in real estate is dependent on leverage and so the thing that really makes it a great investment is to have access to below market rate loans that are subsidized by the tax payer.

The tax benefits are real because you can claim depreciation over the total cost of land + structure when only the structure depreciates in reality. But assuming you shelter taxes in all your other business/investment ventures then tax becomes less of an issue. Also, a lot of real estate investors mentally don't account for capital gains tax from selling their properties which they wish to hold forever.

There are lots more negatives than the positives though.
Your earlier question was about institutions, who only do things to large scale. For the small businessperson, Harry Browne would agree with your dim view of real estate and he said so in several of his books. However in the environment we have had i.e. declining interest rates and escalating asset values, I think a good argument can be made for income producing real estate being a good investment.
If we were in an environment where interest rates (and hence cap rates) were rising, and asset values were flat or declining, it would be a whole other story.
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Re: Need a realtor to sell a home in this market?

Post by I Shrugged » Sun Jun 27, 2021 8:24 am

Vincent, do you have a business?
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Re: Need a realtor to sell a home in this market?

Post by I Shrugged » Sun Jun 27, 2021 2:42 pm

Chief, if it was easy, everyone would do it. That old line packs a lot of wisdom inside a few words.

As to HB, who knows. He made big money as a speculator, speaker, and newsletter publisher.
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Re: Need a realtor to sell a home in this market?

Post by Kriegsspiel » Sat Jul 03, 2021 11:37 am

I think it's cool that our very own tomfoolery is ghost-writing for Ben Carlson.

Inequality In The Housing Market.
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