http://www.portfolio.com/news-markets/top-5/2008/12/23/Was-Mr-Potter-Right-After-All

You remind me of Mr. Potter in It’s a Wonderful Life. You sound so bitter that Redfin exists. I’m sure Redfin has their faults, but they sure bring out the true side of some ‘professionals’. I may use a full service realtor to buy a home, but after reading your rants, I wouldn’t give you my business if you were the only realtor in town.

I think you have to be a non-employee to really be able to appreciate the humor in the terminology “rodfun.”

http://en.wikipedia.org/wiki/False_dilemma

I’m not arguing this won’t be a very painful recession (or isn’t already) – or that it might not be a 2nd “Great Depression” in many ways. Just the idea that there will never be another boom absent mass depopulation, has been demonstrably proven false every single time it’s been predicted. So to for the argument that we’ve reached the pinnacle of society and our standard-of-living is headed nowhere but down.

This is what kills the perma-bears every time. They argue doom-and-gloom for years, some of it eventually comes true, convincing them they were right all along and “this is the big one”, so they stay bearish until the point at which the market has recovered so much they’ve given up a lot of their gains. Again, not arguing that some (Roubini) haven’t been more right than wrong recently, but even he’s not arguing we’re screwed forever.

Are you volunteering, or are you suggesting a non-voluntary approach?

In my opinion, overpopulation is the trump card no one is talking about. We’re simply out of fish. We can’t build small cheap cars for $20-30/hr wages, ask Toyota [Toyota City hires temps now at $12/hr].

6.6 billion people mean Boeing and MSFT can’t compete in a world economy that can afford Seattle RE. Not when we can insource or outsource our jobs on the cheap [they are], using globalist common sense [greed?].

The subprime Superman to save the day with stagnant future Seattle pay is gone. We’ve exceeded the Earth’s overpopulation credit limit. Its that simple.

Deflation is the rule now. The solution? [depopulate planet Earth and raise wages again]

I don’t know whether your point is valid or not because I stopped reading at “RadFun”. I also stop reading political comments that use “McSame” or “NoBama”. Any intelligent point you might have is immediately diminished by name-calling. Smart readers will just “flip the idiot bit” and move on.

Another poster commented that the repeated misspelling may be some strategy to rag on RedFin while preventing any sort of search engine hit. I don’t know, seems pointless to me. I mean I just included the correct spelling on the same page (as did many others) so….

-N.

“Our Apartment Market Is Never In Equilibrium — It Just Passes Through It From Time To Time.”

That’s how Dupre + Scott Apartment Advisors leads off their December issue of “The Apartment Advisor.”

What they mean is that it looks like the market is quickly passing from rising rents and falling vacancies to the opposite.

Dupre + Scott forecast in September that market vacancy (not counting new construction in lease-up) would rise from 4.8 percent this fall to nearly 6 percent by early 2010. They now say it will peak at 7.3 percent in June 2010 but won’t get back into balance until early 2012.

“Except for properties still catching up to the market, we expect no rent growth in 2009 and 2010,” they said.

Blame job losses and increased competition.

My question is this: there was a time when folks used rules of thumb to gauge how much house they could afford. Depending on the “thumb”, 2.5 to 3 times income (gross or net?) seemd to work regardless of the prevaailing tax and mortgage interest rates.

iMHO, leaving this type of prudence behind certainly contributed to this mess we’re in now.

So, here’s what is bugging me. If we go back to something as simple as 2.5 to 3 times income, how can I (or most of us) ever afford to buy in Seattle? I make good money (6 figures+), no credit card debt, own both cars and maintain a credit score >800… I say that to say this: I refuse to spend $500k on a fixer. We like living in the city, walking to shops and using the bus, so we’re not going to move out east or north.

So now, we are looking at Fortune’s List of Top Places to live and considering a “Cost of Living” adjustment. It’s a shame. We really like Seattle, but we just don’t want to be house poor.

Venting a little here, but I think this forum is filled with like-minded individuals.

Normally if say Mexico did the same thing – people would flee. Here they are kind of waiting.

So do we expect a huge price daflation of real estate?

Also what will this do to the USD? This is particularly interesting if some of us contemplate or hold foreign currencies. If the USD falls – then people holding foreign currencies will be able to buy US assets for very little money.

Let me say again that Real Estate agents are independent contractors. They can try a variety of things to generate dollars. My dollars over the years have come from being a contractor in the Real Estate business. If this site were ever to attract or have Real Estate professionals participate here you would find many Real Estate agents saying that the problem with Real Estate today is the caliber of agents.

My point is that you all want to complain without solution. The mind set here is called the week end warrior. Ever since I can remember there was the angry guy in the car on the week end visting open houses. Eventually the guy picks a place out of frustration and there they are. He then starts calling in Real Estate agents to get the house sold as soon as he can financially manage.

The great thing here is that the technology lets people sit at a computer, Real Estate agents included. Neither you nor the agents you are complaining about visit, see, or have a working knowledge of the pretty pictures you see on the internet. Decisions are made by picture puffery rather than value added analysis.

It’s charming to hear you wax poetic about a failing industry…by chance do you have fins on the back of your car? If I have narrowed down my home search to a specific area and have nailed down my offer price, why then do I have to pay you upwards of 20k to run p-work and talk on the phone for me? I’m sorry, but I can’t help feel a bit flustered that your REIC was a major player in this “buying and selling of each others homes” ponzi scheme we find ourselves in.

After being burned by the current market, buyers and sellers in the future will put a lot more effort into their real estate transactions, and the technology to help them learn and understand what they need to know will be there, most likely through companies like Ray’s. Fee based consultants, not commission based sales people will rule the day.

http://www.youtube.com/watch?v=ztQTLnCukBw&feature=related

First and foremost I think Real Estate agents should be mentored for no less than two years. The idea was traditional brokerages would provide that mentoring but they in turn pushed education. Rather than being in the trenches doing mass transactions new agents are given classes and turned lose on the masses. It all goes to getting warm bodies to throw deals together to get more commission split dollars.

Second is that Fiscal responsibility should be a corner stone of Real Estate agency. My wife and I own a cleaning company that other agents used to make fun of me for. Other agents today do have side businesses that can cover the spread between good times and bad.

Another figure from the very bad old days was a woman who ran an Institute of Real Estate Tax Accounting. Her business was to collect commission checks, withhold taxes, pay expenses, and give the agent a pay check. She kept the money in a rolling account that the agent could invest or bank. She held the money. At the end of the year or on the quarter she would give dividends.

There is an agent on the Eastside who runs a board of seven agents. They meet every morning and do the tasks associated with the listings and sales that they are working on. The work week is seven to four Monday through Friday with evening meetings with clients until eight. Sundays are for Open Houses, and Saturdays are for touring buyers and preparing for Sunday. Tasks are rotated with a full medical, dental, and vacation package. Again every one is on a salary with bonuses paid Quarterly. A year end dividend is paid if warranted.

This is traditional brokerage. A Real Estate agent should have a hundred deals under the belt. There should be a pool of knowledge available to the consumer at every turn. From the moment the agency is created by contract the work should be on the shoulders of the agent who is representing the client in a Real Estate transaction.

I know this is an off topic comment. Like i said earlier it bothers me that quotes of puffery are used to denegrate a couple of good companies while a cheap con job of web 2.0 is given a free pass. As a matter of fact it appears to me that the idea of paying some one to do nothing for you but the most remedial tasks is elevated here at the Seattle Bubble.

For some reason, I always felt the prices in Redmond/Kirkland/Seattle are superficial. Just listen to your heart. You didnt need to read all the blogs or do lot of calculations to identify a big housing bubble like this.

Its just common sense. Lets use our time in building some great products useful to the world until this bubble bubbles out (instead of waiting to see its bottom)….

http://www.gold-eagle.com/editorials_01/seymour062001.html

John Jacobi was never a Real Estate agent. He was a property owner who thought the Real Estate Industry could use some professionalism. He built his business by being selective about the agents he hired, insisted on training, then held those agents to higher standards if they wanted to continue representing the Windermere brand. Lennox Scott saw the benefits of the internet and was the profit based investor in Real Estate searches, information, and internet community.

Both of these guys wanted to improve the Real Estate sales aspects of the industry. These were innovators who wanted to make positive steps to “fix” the industry.

Real Estate has been a part of my life since I was in high school. Those were the days of the pearly teeth, big hair, and plaid jackets. Every body smoked cigarettes and drove Cadilacs. In conversation through out the Real Estate Industry most people agree that they never want to go back to those bad old days.

In fact for all the changes we are now getting people who know nothing about construction, land use, planned development, or economic trends writing up deals so you can save money. In the bad old days you would be run out of the business in less than a year with that lack of skill set. Today it’s normal.

Back in the day agents were lifers. You made money by buying Real Estate rather than selling it. It’s a business, a way of life, it’s what you do. Is that the level of service you are paying for? Are you paying some one who knows the game and how to play it, or are you being sold something, an idea, a sales concept, and paying for the privledge?

Gotta go:; I have a computer software glitch and I’m in queue for an online chat about it. Computers are great when they work.

I know that you and I don’t often see eye to eye on most things, but please stop intentionally mis-spelling Redfin. Why do you do that?

I appreciate that at my request you stopped calling them Rodfun, but really. It is so embarassing to everyone in our industry when you won’t say Redfin. Again I ask, why do you do that?

And “the Glen guy” spells his name with two Ns It’s Glenn Kelman, Redfin, not Glen of Radfun. It makes us all look bad…please stop it. Thanks. If you can’t stop for some reason, then in the name of transparency, at least reveal why you are doing it.

However, we WILL do short sales, and our office minimum of 2900 is unsurpassed. Do you want to know why? All our Agents are financially secure and are investors. We do not NEED TO SELL TO STAY OPEN. We moved in with PNC Bank and of course we like our Buyers to use our lenders and Title/Escrow but in the end its your choice.

The fact is this. Do your research. Get Pre-Approved. Then when your ready to Buy don’t be brain dead. You found Seattle Bubble. That should have educated you already. Now find a GEM in the coming years. There will be thousands more 500 Realty type companies coming throughout the Nation. Brokers can make a very good living at giving back 75%. Furthermore, paying more then 500 to LIST? R U NUTTS? Then some Brokerages nail you for another 3000-5000 at close? For God Sake wanna throw your money away at least give it to a charity.

Change is here and it takes every reader here on the Bubble to educate their family and friends on the proper way to buy and sell. As Tim says question if you even need an Agent. If so, and the property is listed on the MLS, the cash machine should ring in your head. That 3% is yours Buyer!! If your going to give any of it away then do it wisely!!

Here is the difference, when someone pays a fee for a service, they expect that the service is going to benefit them, as in the one paying for the service. People don’t hire someone to find the best deal for the one providing the service. I hope, gosh I hope, that one great bright spot in this mess is an end to the current paradigm. I feel that if I must deal with a Realtor, that I can stay a renter forever and feel real good about that decision.

What I liked about the USA today article was that it would quote NAR, then follow that with another quote from another economist, and that quote just happened to be reality based. It put the NAR guy in a real context, that was good. What also I liked was just how similar this bubble and its aftermath is a repeat of the Great Depression. I am not saying were are in a GD or going to get into one, but it shows just how easy it would have been to avoid this whole thing, if only people had used reason/research and logic rather than irrational exuberance.

As for their demographics, I was in a line to get some coffee and that headline was sitting there staring at me, so I looked it up on the net.

How exactly are you, the traditional RE advocate, going to get that client back when he actually makes a purchase?

Methinks you protest a bit too much.

The Glen guy got through to Congress with the help of the Real Estate lobby. Every large corporate brokerage has wanted to get rebate marketing passed since Sears bought Coldwell Banker. The thought they had was to be a one stop shopping experience by rebating Title, Escrow, Mortgages, and House Hold Goods through the Sears brand of companies.

Congress was asked to protect consumers from what could be sever conflict of interests. Go figure a snake oil salesman fresh from expedia.com helped take those protections away so the internet based Real Estate Sales machine could set up shop. You can now get rebates on everything concerning real estate.

I also bash expedia which in my opinion ruined the domestic travel industry. We have long lines, no help, high fares, and a bag of peanuts. The airlines now enjoy the highest level of customer complaints in history. By the way, like the auto industry, we gave them tax dollars to bust up the unions. That was just an aside, Real Estate is still an independent contractor service industry.

Real Estate agency is a service. You pay for a service. You pay for someone to know what they are doing. You pay for some one to know, pricing, location, and condition. You pay for the advice of where the market is going and it’s impact on your purchase or sale.

So there are no predictions in Real Estate because the Real Estate market never changes. People buy and sell Real Estate every day. You make the best deals you can every day. The trick is to hire some one who knows what they are doing.

Real Estate agents are service providers. You pay a commission for a level of service. Paying less gets you less. The idea you will pay less for the same level of service has been proven wrong consistently.

1. My offer through Redfin did not go through and so no commission passed hands.
2. They were much more than secretarial. They told me the price was probably too high, but if I wanted it, then so be it.
3. My offer actually after escalation turned out to be $5k higher than anyone else’s, but was not accepted.
4. Even though I was pre-approved, another offer was accepted because they waived any financing contingency.
5. Here again, Redfin helped by saying they would never recommend a client doing that. Too much can happen between the Purchase Agreement and final Closing.

So I’m not saying they’re the greatest thing on earth. I understand they are in it to make a profit. I’m sure other ‘non-traditional’ firms can provide a similar high level of value, I just don’t have any experience with them.

Redfin has provided me better value than the more traditional firms that I’ve tried, like Windermere for instance. When looking with them, the only properties I was shown were, lo and behold, other Windermere properties. And Redfin is more than the agents who greet you at an open house with, ‘Hi-my-name-is-Becky-Are-you-working-with-an-agent?’ These agents seem more of an impediment than providing much value.

I’m not writing this to change your mind. That is beyond my wish or capability. I’m just saying I’ve had good experiences with Redfin that I have not had with traditional realtors.

20X annual rent?

Has anybody else noticed how that number has started to grow this year?

First it was the old 100 GRM for investors and 160 GRM for buyers. That’s what I read on active rain and the Irvine Housing Blog.

Then the NY Times stated that historically, the GRM was 14-16X annual rent on average. (Higher than Active Rain or IHB even suggested)

Is 20 the new 16?

Are we being conditioned/manipulated to accept higher prices?

Besides…what is USA Today’s readership demographic?

You put in an offer, you negotiated, you were steered towards a closing so that Radfun could get paid for doing nothing. I will admit attorneys are far worse at charging money for doing absolutely nothing in a Real Estate transaction.

Radfun refuses to represent a customer. They are a secretary service that thinks treating the opposition like crap is their function. It is this lack of skill that costs you in a transaction. It is the problem that most people complain about. Unskilled workers trying to fulfill what they think a Real Estate transaction is all about.

I’m also going to say that Radfun has spent millions of dollars on generating comments like this one at #37. The secretarial staff monitors blogs to see where they can put in a plug. It is what they consider grass roots advertising.

The article is tarnished a bit by quoting Lawrence Yun:

“National Association of Realtors chief economist Lawrence Yun predicts home prices will keep falling in 2009 but could return to their 2006 peak in three years, not counting inflation.”

In his dreams…

“He says the bubble largely was confined to four states — California, Nevada, Florida and Arizona.”

Pull the other one…

I’m sick of these thieving salesmen, I think everyone in the RE/car business should just move into a shelter until this is over. They may lose everything they have, but at least they will have their self respect for just stepping up to the plate and telling every potential client that comes along that they would be absolutely nuts to do business with them and only an idiot would buy what they are selling.

Real Estate is full of positive thinking gurus who will tell you everything can be conquered by attitude. You get up, dress well, drive a new car, and speak with confidence. This is what the public has grown to expect from the Real Estate Industry.

Large Real Estate companies have promoted the idea of being positive as a way to increase sales. We all use the term Real Estate sales people. There are Real Estate training groups that encourage agents to be great sales people. Many companies follow this concept of making sales to generate commissions to split those commissions and make more money by having more sales people.

The positive spin is more for the rank and file of sales people than it is for the public. These guys make dollars by infecting the sales force with positive affirmations to share with buyers and sellers.

All of that being said the reality is that right now if you follow the numbers you can make a deal in Real Estate. That hasn’t been the case for many years. Sellers who were unrealistic are now trying to figure out how to get a property sold. More people are listening to advice rather than hype. You can, in fact, in reality, go out today and make offers that make sense.

If you have an opinion about pricing more people are willing to listen to that today. Properties will still turn, banks will need to cooperate, and the market place will need negotiators. In my opinion the agency part of Real Estate will come back while the sales force dwindles.

In that regard a concept of rebate or discount brokerage makes less and less sense. Real Estate should return to a value based transaction rather than a price based deal. You can research until you die but doing is the experience that makes a difference. I think that over time people will ask for, or demand service for a commission.

Well said Shawn…..

Sadly, nobody seems to be held accountable for trying to get people to commit financial suicide when in fact, their credibility should be destroyed for the rest of their life. Better to go to the zoo and study ape droppings for a view of the future than listen to RE “professionals” and all others who have a stake in “keeping the party going”.