basically what I meant Kary is I don’t see the need for an agent in todays world, just like the horse and buggy time has moved on

Well that’s fine, but the fact remains the vast majority of people (even attorneys) don’t know much, if anything, about selling houses, or valuing them. I’ve had some very educated very intelligent clients, and they tend to ask just as many questions, if not more, as the ones who are less educated.

It’s a specialty. Back in my prior profession (bankruptcy attorney) there were people that thought they could do their own bankruptcies, and even attorneys who didn’t specialize in the area who thought they could dabble in them. The thing was, they didn’t know what they didn’t know,. and sometimes that got them into big trouble.

I am not sure how you would think you have any idea how much I make?

I am also not certain how it is considered whining to say that if we are in a financial crunch we should spend less. Maybe you don’t agree with the spend less approach, but that it is not the same as me whining.

I am all for raising taxes, if every person bears the same percentage increase. And I am not in the earning catagory that is affected by this latest tax increase, I just think that it is pandering by the politicians to to pit lower income earners against higher income earners.

And for the record, I am an Obama supporter, well I at least thought he was the least worst choice.

Or better yet Kary don’t use any agents, I see more and more FSBO listings all the time.

Where? They are very rare right now.

In a hot market a seller can go FSBO and get activity. No so in a cold market.

A loaf of bread costs the same for every one.

Herman you say you will be taking time off just to change your tax bracket I call BS on that. Fazu the 5% you care about so much were the ones that benefitted the most under George what goes around comes around move on.

I had to finally comment on this because the topic was DELISTINGS ON THE DECLINE then it was hijacked to whining about taxes, and before you whine some more go back and read who started the tax rant.

or spend less

The only missing piece is that both individuals need to declare their need/desire for consumption to ensure that the government does not take too much, nor provide too little in its annual reallocation. Today the government only requires us to report our income.

I guess that’s not entirely true. The government does require its citizens to reports some of our needed/desired consumption. For example, to qualify for mortgage benefits and deductions, we have to report our mortgage consumption. Presumably if we want health benefits we will have to report our consumption levels for medical care (so it can be provided by the government). I report my day care consumption levels to the government through the FSA I participate in. So, the government is making progress on getting us to report our consumption levels, but does not yet capture all of it.

By extension of your logic, any amount of taxes will not affect person A at all until it reduces his income to $30,000 or less, at which point he would be forced to modify his lifestyle. So, person A would not be affected by up to $220,000 in taxes.

Meanwhile, suppose person B desires or requires $100,000 in consumption – maybe they own a big house, or have medical bills, or like nice cars, boats, and trips. And suppose person B earned only $20,000 in income that year. Maybe person B is retired, sick, or simply prefers not to work. Person B is bound to be bothered and affected by any taxes, and might be in dire straits even with no taxes at all.

By extension of your logic, person A could forfeit $80,000 via the tax system and it could be provided to person B directly in cash or in equivalent government services. Person A would have no impact to his chosen lifestyle, and would not be bothered by the loss of $80,000. Person B would have his lifestyle fully supported and his dilemma would be solved. This appears to be an ideal solution, right?

The only missing piece is that both individuals need to declare their need/desire for consumption to ensure that the government does not take too much, nor provide too little in its annual reallocation. Today the government only requires us to report our income.

That was my interpretation of your comment.

Yes, I did misstate.
Commissions are negotiable, so theoretically one could negotiate 0% as the selling office commission, couldn’t they?

Also, depreciation expenses on buildings provide a pretty good tax shelter, although that eventually gets recaptured.

RE: Andy @ 43 –

Andy,
The typical contract calls for a 3% selling office commission , so if there is no “selling office”, no agent representing the buyer then that commission will not be paid, so the seller would be saving 3%, so I’d make my offer knowing that you are essentially giving the seller an extra 3%…You can also use a real estate attorney if you don’t feel confident doing it yourself, or find an agent who is not a member of the NAR, and ask them to give you back some of the commission.

This is incorrect. If there is no buyer’s agent then the listing agent is the selling agent and the listing office would get the entire commission (6% in the example). For it to be different that would be a variable rate commission which requires disclosure.

Now if you do go in without a buyer’s agent, the listing agent might be more likely to cut their commission to get a deal done, but nothing is automatic. When were were looking for our own home, the only offer we even considered reducing the SOC on was one where the seller was the agent.

Warren Buffett pays a lower tax rate than his secretary because corporate dividends and capital gains are taxed less than earned income. Most really wealthy people get most of their income from their wealth (investments, interest, etc.), not from their “job”.

My personal opinion: we shouldn’t tax people who earn income from work more than people who gain income from wealth. If we treated all income the same, gave everyone the same tax rate (so everyone was paying the same percentage of income) and eliminated all deductions except one standard deduction to zero out at the poverty level, the overall tax rate would be somewhere between the capital gains rate and the earned income rates (lower for income gained by work, higher for income gained by wealth). Of course, this limits the government’s ability to influence social choice (like encouraging home ownership, charitable giving, etc.) and would make the “truly rich” (as defined by 98115_Renter) “care as much about their taxes”, so it’s not likely to ever happen.

RE: kfhoz @ 30 –

You’re right, many millionaires do not live high on the hog. Warren Buffet, the richest man in America, “still lives in the same house he bought three decades ago for $31,500″ I think if you really crunched the numbers, many, if not most of those million dollar homes were bought by people who really couldn’t afford them.

Jon @ 42. If I follow your logic, you are presuming that the expansionary policies of the Fed will overcome deflation in about two years, ushering in an era of abnormally high inflation.

And in that era, the value of the home as a shelter against inflation will replace its value as a tax shelter (deduction). Anyone with spare bucks will want to plow it into an investment in a more expensive home as opposed to, say, a high-yield CD, stock, or bond. They can rely on the $500k exclusion to protect the inflation-driven gains.

I almost buy what you’re saying… but I’m not so sure we’re in for an era of inflation in housing prices so soon after this debacle. Sniglet would certainly disagree with your premise. I have a feeling that the deduction impact will be priced in sooner than anticipation of inflation gets priced in.

Let’s start at the beginning. A property in default has a legal Notice of Default. Some Investors or companies track these. Kary has been mentioning he tracks bankruptcies, some investors do that.

Then there are people like Dean Street of John L Scott who tracks foreclosures for clients and investors or people like George Pergones (sp?) with Windermere or Keith Brown of Keith Brown and Associates who work directly with banks to list REOs on the NWMLS.

There are however millions of REOs. All foreclosed properties are a matter of Public Record. Foreclosure companies, there are two in Bellevue, keep track of these properties and help people buy at auction or negotiate with the banks.

Each bank, investor group, has a department for properties they own. You can talk with them, but they have their own people they deal with. They will refer you.

We’re talking about a lot of work. Most of the banks don’t talk to each other, and the different groups have sweet heart deals that they stick to.

If you want a deal on a property pick an area or location you like. Stay within a mile or up to three mile radius and drive it. Do your own research on pricing, I use price per square foot, plus add for view, location, and condition.

Especially now look for empty houses. Look for properties in disrepair, long grass, or obvious signs of abandonment. Real Estate agents do this all the time. Then look the property up in Public Records and see who owns it.

It’s simplier to work a location than to chase “deals.”

Once you have a deal you need to negotiate. I have gotten nice letters from people who want to buy a property. You can make a deal. You can make a deal on a cocktail napkin and close it at a reputable Escrow Company. I use John Wagner Escrow. He is an attorney who will help with transactions his company can escrow.

How much negotiating room is there on REO property?

Andy,
The typical contract calls for a 3% selling office commission , so if there is no “selling office”, no agent representing the buyer then that commission will not be paid, so the seller would be saving 3%, so I’d make my offer knowing that you are essentially giving the seller an extra 3%…You can also use a real estate attorney if you don’t feel confident doing it yourself, or find an agent who is not a member of the NAR, and ask them to give you back some of the commission.

Ray: You are right; we can negotiate by ourselves; time to cut her ass loose
We might as well bid on our own – we usually utilize her only when we want to see the homes (inside + out) – tough to do in gated communities
Quick question, if we have a pre-offer – can we just bid by ourselves and negotiate a cut off the sales commission?

Time to cut the NAR out of anything….

The capping the deductibility at 28% will reduce the affordability of high end homes, however, the overall raising of rates makes the use of a house to defer capital gains tax more valuable. The higher that the inflation rate eventually goes, the more valuable that becomes.

So people will put more money into houses to avoid higher taxes elsewhere, even if the deduction is capped. HENRYS’s will just put more money down on their house and less in other investments. I think this is what is driving the higher sales in California (investors buying up foreclosed properties), and will pick up in Washington also once the recession flattens out.

Its ironic and sad the incentive these taxes will create to lower productivity.

1. There is a cross section of families (incl mine) which have been labeled “rich” and excluded from the label “working”. We are targeted by angie’s stereotype that we live comparably to the likes of Warren Buffet. In fact we work our asses off and do not live exuberantly. The injustice is in the sense of moral privelege and entitlement to take the fruits of our labor.

2. This is coupled with a new bailout/handout culture that rewards overconsumption, poor risk assessment, and risk unpreparedness. This culture is being promoted by our government.

3. The combination of 1 and 2, which is served by it’s proponents with an extra helping of venom and self-righteousness, will lead to a backlash from the productive and the responsible. The effect will be a reduction of output by the overproducing class, for example the leave of absence that I have now worked out with my employer.

Or we can live in Mikal’s world where we report our annual consumption and forfeit all excess income, because it has “no impact”.

My question is how and when this set of policies and attitudes will affect high end home prices in Seattle. Clearly it will have a depressive effect. When I run the numbers on my true cost of housing, the new policy adds an impact of something like $60,000 over the life of a 30 year loan. Like most people on the blog, I want to buy after this impact has been “priced in” and not before.

Andy……..I’m perplexed by your statement.

“Our Agent keeps telling us to Buy”
“houses are dropping in 100k increments”
“the NAR are a bunch of crooks”
“real estate professionals (idiots-crooks)”

Yet, you stated “Our Agent”. Why would you engage the services of an Agent when:
they are crooks, idiots, give 100k bad investment decisions to you yet you STILL engage their services.

Seems to me if you hire an idiot or a crook you will get whats expected. Do you know that you don’t need an Agent to buy a home. Do it on your own…Thousands do.

RE: Herman @ 20 –

Did you also see that 14/15 states with the highest % of those earning >$200K voted for Obama? (The only exception was TX). You know why? Because a majority of those earning over $200k voted for Obama! Why is it that those earning over $200K don’t care as much about their taxes being raised as republicans who make less?

http://finance.yahoo.com/taxes/article/106659/Where-the-200K-Crowd-Lives

Finally someone is eliminating the mortgage interest deduction. FWIW, the truly rich don’t finance anyway.

You don’t actually know how the people voted by income, so there’s no proof of anything. Plus, I don’t think anyone really concerned about the truly rich – they have ways to hide income – the people that care about these tax changes are those stuck with W2’s and work 9-5 jobs.

@Angie – Its not “just another” – its nearly 40% in total and climbing apparently – try living in a state with income taxes..

at what point is someone making over $250K a year paying a fair amount tax? 40% 50% 65% 80% – clearly, from your comments, someone making that amount of money is here to subsidize everyone else, right? Basically, they work for you?

Should someone making $150K only pay 25% but someone making $250K pay 40%?

I’m not talking about people that have millions in assets that can effectively retire today without ever worrying about where the next meal comes from – I’m talking about the person that can end up losing their house if he/she loses a job.

@Angie
Why would HENRY pay off your home debt? Yes he is a POOR HENRY obliged to live with people buying houses for 12 times higher than his gross salary and still seeing it a right STEALING that money from HENRY’s pocket.

If this is the way, let’s gear up a “Workers Party” and give up the capitalism eh?

If the NAR had any sense, they would urge homeowners to reduce pricing by 30-50%; that would certainly move markets and help us find the “REAL” bottom

The NAR are just a bunch of crooks – Obama should regulate what they say to intice their prey.

Consider, Wall Street brokers are reprimanded or thrown in jail for falsely telling people that stocks will appreciate – the exact same thing should be true for RE agents…

Real Estate “professionals” – more like idiots..are crooks…

To EconE: there is real research in the book “The Millionaire Next Door” that indicates that many well-off people live moderately.

Some do…some don’t. I don’t need a book to tell me that.

To EconE: there is real research in the book “The Millionaire Next Door” that indicates that many well-off people live moderately.

Those poor, poor HENRYS.

Loved the hard numbers that he ran in this current article, too. Another $4K in income taxes. Oh woe! That’s a whopping $333 per month. People making $250K/year can lose that in the couch cushions each month and not even notice. Boo freaking hoo. Notice also that this calculation assumes paying $50K/year in mortgage interest. A quick spin on a mortgage amortization calendar suggests that someone would pay about $50K/year in mortgage interest in the early years of a $1,000,000 loan at 5.5%. Yep, those poor devils are soooo deprived.

Finally, Fazu, this proposal doesn’t involve anything being “phased out” in the sense that the phrase is commonly used, i.e., there’s no indication that it will eventually go to zero.

FWIW, the truly rich don’t finance anyway.

What constitutes “truly rich”? 200k a year? 500k? A mil?

Should we assume that they wouldn’t be prone to taking on debt that is commensurate with their incomes like most people?

I see plenty of million$+ homes with NOD’s currently. Even more with tax liens.

Too many “richly” priced homes. Far more than there are “truly rich” people…or even “just rich”

Did you also see that 14/15 states with the highest % of those earning >$200K voted for Obama? (The only exception was TX). You know why? Because a majority of those earning over $200k voted for Obama! Why is it that those earning over $200K don’t care as much about their taxes being raised as republicans who make less?

http://finance.yahoo.com/taxes/article/106659/Where-the-200K-Crowd-Lives

Finally someone is eliminating the mortgage interest deduction. FWIW, the truly rich don’t finance anyway.

http://money.cnn.com/2009/02/27/magazines/fortune/obama_budget_tax.fortune/index.htm?postversion=2009022717

From Lawrence Yun:

“The momentum is rising and is rising much faster than I ever anticipated,” he said. “Once some people decide to enter the market, other people who had been sitting on the fence did not want to be the last ones sitting on the fence.”

The cutback on new construction in the Seattle area means buyers could quickly soak up existing inventory once the market picks up, he said. “There could be a potential for a housing shortage immediately, until builders start ramping up production.”

RE: JJL @ 17, Hugh Dominic @ 16 –

Redfin puts a disclaimer on their listings that says:

“*Per MLS rules, we cannot display prices from inactive listings. “.

Yes, V, that is exactly what I was referring to.
And per Kary @21, good to know the info is available through and agent.

For more on this: http://money.cnn.com/2009/02/27/magazines/fortune/obama_budget_tax.fortune/index.htm

Another way to soak the high-producers for the bailout.

I think the home mortgage deduction should be abolished completely, BTW.