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December 13, 2006

Things that chap my ass -- An open letter to CA Real Estate agents ...

Dear Sir or Madam,

I know you've had five heady years where actually working for commissions was practically unheard of. A house could be over forty years old, never improved, housed crowds of circus folk and their animals, have only one barely functioning bathroom ... and you could just list it on a Wednesday and have a bidding war by Saturday and seal the deal on Sunday for double or triple what the house was worth only one year before.

Let me be frank. Those days are over. Gone. Finito. Hasta la vista, baybee.

So stop trying to blow smoke up my ass. Stop fooling yourself that I don't read the news, or follow the market, or do my fucking homework.

And stop living by that river in Egypt.

We've been watching the market for over two years. We refused to be stampeded into bidding wars with speculators and flippers back then. Starting this past January, we refused to listen, month after friggin month to the same "Yes, the market has softened, but it's hit bottom now and only going to increase probably starting next month" line you have been pedaling all fucking year.

And it's that same line you are using to delude the sellers that have listed with you -- the sellers who are pricing their houses based on summer of 2005. Sellers who, after the house has been on the market for over four months, advertise NEWLY REDUCED PRICE! UNDER MARKET VALUE! and discount it a whopping $5,000-$10,000 (on a 500,000 house).. and it still sits for another four months.

In the mean time, since I subscribe to a service that lists defaults, foreclosures and bank-owned properties, I can zero in on the area we are looking at and see, within a two mile radius ... almost one hundred properties IN default/foreclosure/auction/reo.

Who the fuck do you think you are helping when you don't explain reality to your sellers?

Earth to agent -- flippers have left the market. Jackal speculators have either fled the market or are walking away from upside down mortgages. The CA Real Estate ponzi scheme is OVER and you now are going to have to actually work for your commission.

And the first place for you to start is to re-embrace the old real estate truism. If the home you're listing hasn't had any offers in the first two weeks or two open houses?

The price is not justified. Period.

I'm not going to make any offer on a house at the asking prices I'm seeing, because they are unrealistic. Do you wonder why buyers like me are sitting on their hands?

It's going to be a long, hungry winter until you wake up and smell the cut grass.

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Posted by Darleen at December 13, 2006 07:57 PM

Comments

Hmm, you sound kinda volatile, there Mz Darleen. Just like the California real estate market.

I'm constantly amazed at what rehabed 1920 cottages are going for in Northeast Los Angeles. Little 800 SF houses, maybe a one car garage. $500,000 or more.

Amazing.

We were looking at some larger Craftsman style places in South Pasadena. Not much under a million, listingwise.

As to listings, my rule of the thumb is make that offer at about 80% of listing price and see what happens. Doing your homework is a good idea.

Most RE agents puff their properties up a little; can't blame 'em.

Posted by: Carl W. Goss at December 14, 2006 08:35 AM

yep. no houses if any kind in Pasadena or South Pas under $700 K.

Sick, really.

Posted by: caltechgirl at December 14, 2006 10:25 AM

Mortgage payment alone is enough to make ones butt hole pucker...Not being from California, do you also have to deal with property taxes? In my neck of the woods annual total property tax runs about the same as 3 monthlys to the bank.

Posted by: Boss429 at December 14, 2006 04:58 PM

Boss429

The only saving grace for homeowners in CA is Prop 13, which pegged the property tax rate at 1% of assessed value (the price you pay for the house when you buy it, and can only be reassessed if you sell it .. or assessed value only goes up by the amount of capital improvements).

For anyone that lived through the speculator cycle of the early 70's that gave rise to the taxpayer revolt that brought about Prop 13, any one (read "politician") that tries to tinker with it will bring certain wrath on their heads.

Posted by: Darleen at December 14, 2006 05:25 PM

I bought a house just before the boom hit 3 1/2 years ago. (it's "book value" has since tripled.) I have a fixed 1st at 4.5%, a silent second that just got retroactively reduced to 0% and a silent 3rd at 5%. My current payments all in (Mort., insurance, escrow & PMI) is $790! That's 200 less than rent on a 2 BDM apartment in my area!

Posted by: gahrie at December 14, 2006 06:18 PM