Friday Flashback: John L. Scott’s 2008 “Buy Smart Zone”

Today’s Friday Flashback comes to us courtesy of John L. Scott (“Your Trusted Real Estate Resource”), who published this delightful “white paper” in early 2008, titled Why Now Is A Smart Time To Buy (pdf).

Here are some selected excerpts:

FACT: The housing market is undergoing a natural cyclical correction.
…unlike what the media would have us believe, a correction in the housing market doesn’t equate to a crash. Unfortunately, the ongoing negative news about the troubled areas in the U.S. has caused a ripple effect, with home buyers and sellers on a national level exercising caution before making a decision.

If only that darn media would have kept their big, stupid mouths shut, we could have kept scamming buyers, and the pyramid scheme could have gone on indefinitely!

FACT: Low mortgage rates give buyers more house for their dollar.
With the 30 year fixed rate hovering between six and seven percent—a 45-year low—qualified buyers continue to have access to incredibly low interest rates.

An excellent example of the “low rates” hype I mentioned yesterday. I doubt we’ll be reading “white papers” from John L. Scott touting the “incredibly low interest rates” when they head back up to 6-7%.

FACT: Heavy speculation and overbuilding result in an increase in foreclosures when prices go down.
The media has been focusing on the hardest hit areas of the country that have seen a dramatic downturn in the market; among them, California, Nevada, Florida and Arizona. …fewer homebuyers in the Pacific Northwest opted for subprime mortgages and because home values have continued to steadily appreciate.

FACT: Subprime borrowers get a reality check.
…unlike the media’s portrayal, the reality is that subprime loans comprise only nine percent of total loans nationwide and of those nine percent, less than 11 percent of those subprime ARM and fixed borrowers have defaulted on their loans. The Pacific Northwest stands apart as is its own micro-market, with more homebuyers qualifying for prime loans. Homeowners in the Northwest have been able to successfully sell their homes for a profit or refinance to pay off their subprime loans.

FACT: Real Estate is localized and the Northwest is one of the strongest housing markets in the United States.
…many parts of the country, like the Pacific Northwest, do not have the same negative news as California, Nevada, Arizona and Detroit, Michigan, because homes have appreciated at a steady clip in the Pacific Northwest.

The running theme in this paper was that “yeah, things are bad… in other places. But the Pacific Northwest is invincible!”

FACT: Over the long-term, Real Estate has always appreciated in value.
The continuing appreciation of homes in the Northwest is not an anomaly. Real estate has always been one of the most solid investments in the U.S, because, after all, people always need a place to live. Real estate has less volatility than the stock market and over the historical long-term it remains a guaranteed return-on-investment.

Guaranteed!

THE FACTS ADD UP: If you’re in the market to buy, now is the time to “Buy Smart”

John L. Scott's 2008 "Buy Smart Zone"

I would certainly hope that most of my readers were smart enough to hold off during John L. Scott’s “Buy Smart Zone.” If you took John L. Scott’s advice and purchased a home shortly after reading this “white paper” in early 2008, four years later you would be down nearly 30% on your “solid investment.” Smart!

Here’s what I had to say about this nonsense at the time:

How is it “unfortunate” that people are being more cautious? Oh, right. John L. Scott sells real estate, so they would prefer it if all caution was thrown to the wind. Also, they’re blaming the downturn on “negative news.” That is so laughable it’s not even worth a detailed rebuttal. Here’s a hint though guys: it’s the other way around—the downturn is real, so the news is negative.

…this is definitely not an “objective assessment.” It’s quite clearly a marketing document intended to dupe cautious home buyers into throwing their money into a freshly-declining market. I hope nobody takes this document seriously.

Here’s hoping.

The purpose of our Friday Flashback series is to remind people why it’s never a good idea to base your home purchase decisions on the word of someone with a vested financial interest in selling as many homes as possible for as much as possible, no matter what. If you’ve got a good example of local home salespeople or other industry shills on record making fools of themselves in the years before the bubble burst, shoot me an email.
  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

35 comments:

  1. 1

    There’s Always Hope in the Bleakest of Times

    That’s not saying its gonna bottom out soon, it will take a very long time whether we like it or not. What speeds the recovery up IMO is setting out a plan that is workable, like getting wages up with less competition weighing them down.

    Once that plan is agreed upon and implemented; imagine the hope and joy spurring the economy into some partial recovery, right away too. We need to think longterm to fix this mess, more debt is making it worse.

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  2. 2
    jesus christ says:

    I predict continued value decline in all market segments with plenty of forclosures, auctions, shortsales, and motivated sellers who got greedy and bought too many”investment” properties. this thing is still tanking folks! I should have bought physical Gold in 2006!!!!!DAMMIT

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  3. 3
    Matt Thomson says:

    As someone who purchased a home in the Pacific NW during this time (okay, almost…’07), I can say I’m glad I did. My house has dropped about 24% in value based on a recent appraisal for a possible re-fi (not going to happen).
    But guess what? It’s better than where I was living. My payments are about equal if not less than rent (Zillow estimates rent at my house at $200/mo more than my mortgage payments). I can afford my payments, so even though I’m underwater I’m in no danger of a foreclosure. Both of my children have been brought to this home from the hospital, had all of their birthday parties in this home, our friends have taken shelter in our home when a tree crushed their home.
    Congrats to you on your amazingly accurate predictions of doom and gloom, warning people not to buy. Glad I didn’t know about your blog until recently, or I may have listened to you and missed out on this incredible HOME. Oooops. How terribly un-American of me to look at this as a home and not an investment.

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  4. 4
    The Tim says:

    RE: Matt Thomson @ 3 – I’m shocked, shocked I tell you to hear that a real estate agent drank the “worth it no matter what the cost” Kool-Aid during the bubble, and continues to drink it today. More power to you, Matt! To each his or her own.

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  5. 5
    Ray Pepper says:

    RE: Matt Thomson @ 3

    Matt you JUST found out about Seattle Bubble. I was blogging on here back when you and I would engage each other on the TNT…What took you so long to find the light here? Hope Gig Harbor Undressed is still cooking!

    24% Matt? I suspect far more and do NOT forget about the Cost to sell in this state. That alone pushed you WELL OVER 30%…It will continue to spiral down Matt because the fact remains people will only remain stupid for so long and the Homes in Gig Harbor will continue down down down in the absence of any further Fed Intervention

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  6. 6
    Jonness says:

    RE: Matt Thomson @ 3 – Losing $100K in a couple year time span isn’t the end of the world.

    Why endure the effort of learning how to make smart investment decisions? You can’t take the money with you. And as far as your kids, they can earn their own. Actually, it’s not such a bad strategy.

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  7. 8
    Pegasus says:

    RE: Matt Thomson @ 3 – “The only thing that ever consoles man for the stupid things he does is the praise he always gives himself for doing them.”

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  8. 9
    Macro Investor says:

    RE: Matt Thomson @ 3

    That’s a good one, congratulating yourself for being ignorant — and as a result missing out on buying cheap. Then justifying your poor read of the market (a professional?) by saying losing $100k is worth it (what ever that is).

    Really a classic case of cognitive dissonance. Nothing personal to Matt. Here’s how losers think. They invest in something with the hope and dream that it will appreciate and make them rich. When that doesn’t work out, they justify it by saying they really bought it for other intangible reasons. All the while they are crying inside because you can’t really fool yourself. Sad, but that’s why millions are sitting on investments that they should have dumped before it destroyed their financial well being.

    The only decent investor here is Ray. Do your homework, then invest decisively and with confidence. The moment you see it’s not working out — dump it unemotionally and quickly. Cut any losses before they hurt you, learn from it and try again.

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  9. 10

    By Macro Investor @ 9:

    <
    That's a good one, congratulating yourself for being ignorant -.

    It’s not a matter of being ignorant. To be ignorant you’d have to buy a place believing it would never go down in value.

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  10. 11

    RE: Kary L. Krismer @ 10 – To further expand on that position, back in August 2007 I was trying to contemplate what to do going forward in several different areas, doing pros and cons on many different types of activities. Note that was immediately after the local peak of prices, but before the current financial crisis which hit the fans in 2008.

    One of the activities was investing in real estate generally, and there I listed the potential disadvantages of doing that as including: “Downside risk [price]; Low income;Time consuming; Interferes with real estate business; Complicates taxes; Property values are currently high; and Not liquid”

    Note that I somehow effectively listed the possibility of declining prices twice!

    One of the other activities was buying a new house to live in. There the disadvantages included: “Prices are high right now–downside risk.”

    The worst call I made in doing that analysis was on bonds. There I had a disadvantage of bonds as being: “Interest rates are more likely to head higher resulting in loss of equity or locking us into the investment.”

    Anyway, it’s not about ignorance as understanding the risk and being willing to take the risk. There’s nothing you can do that is risk free. As I’ve often noted, even holding cash involves risk.

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  11. 12
    Buy My House, Idiot Renters! says:

    “My payments are about equal if not less than rent.”

    If you ignore the tens of thousands of dollars in capital losses. And, bluntly, I don’t think you could have bought a house in 2007 where “payments are about equal if not less than rent.”

    Now, maybe, but not then.

    Thompson, December, 2008:

    “Buying a home in Gig Harbor is still a great move for many. I don’t really get it sometimes. Gas prices drop, everyone runs to the pumps. A store has a sale, folks line up outside the doors waiting to get in. Home prices drop, as does the cost of borrowing money to buy a home, and everybody puts on the brakes and waits to buy. Waits for what? Prices to go back up? Interest rates to climb again? It’s not the right time for everybody to buy…it is the best time in history for some to buy.”

    At least Thompson is honest on his blog:

    “The median home price in Gig Harbor for 2011 was $329,500 (down 11% from 2010), and the average home price in Gig Harbor was $387,617 (a 9.5% decline from 2010).”

    Tim, remember that it is evil to accurately forecast the trend of real estate prices.

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  12. 13

    RE: Matt Thomson @ 3 – Oh, Matt, your post would have been a lot more meaningful if you’d gotten out in front of the fact that you’re a real estate agent, too. Too bad you waited until Tim pulled the curtain back, it basically destroys your credibility. And that, in turn, is unfortunate because I think you have a reasonable point: Buying a “home” is much different than buying a house……

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  13. 15
    Ray Pepper says:

    RE: Macro Investor @ 9

    nailed it…I knew Matt many years ago..Former school teacher I believe..We went head to head many times in 2006-7 on the blogs..Tried to justify then some of his Buyer purchases in Gig Harbor which were horrible purchases at that time..Now they are most likely somewhere in the foreclosure pipeline..

    Sad…but since hes a neighbor in close quarters around (here within about 2 square miles) I better be nice and keep bashing to a minimum…..Might see him at Costco, Panera, or the Y….then…………. A W K W A R D ……………

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  14. 16
    Gdawg says:

    Who really cares what JLS wrote in 2008? Not relevant.

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  15. 17
    Macro Investor says:

    RE: Buy My House, Idiot Renters! @ 12

    “Gas prices drop, everyone runs to the pumps. A store has a sale, folks line up outside the doors waiting to get in. Home prices drop, as does the cost of borrowing money to buy a home, and everybody puts on the brakes and waits to buy. Waits for what?”

    A house isn’t a tank of gas. Someone has to lend you big bucks and the sub prime well ran dry. Some folks here are forgetting why we had a bubble in the first place. Then again, it’s convenient to forget if your commission depends on keeping a deception going.

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  16. 18
    Scotsman says:

    RE: Gdawg @ 16

    “Who really cares what JLS wrote in 2008?”

    The people who read it in 2008, believed it (because JLS had some credibility) and subsequently bought a house. It was painfully obvious to anyone who was paying attention that 2008 was going to be a transition year, but it wasn’t clear how bad it might be. JLS probably tipped the balance for many who are now much poorer than they thought they would be.

    I care. I think JLS is one of the most self-serving “experts” often quoted out there, a man who has enriched himself by intentionally distorting what he probably knows to be true- that we are in a major correction, and that real estate prices will most likely NOT be going up for years. I’m sure by the end of 2008 he knew that, but he kept pushing until just recently when his statements have moderated and his blog was taken down. Maybe his lawyeras finally said “enough.”

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  17. 19
    Matt Thomson says:

    RE: Craig Blackmon @ 13
    Nothing meant to be concealed here…thought that by simply clicking on my profile you could see that I’m a real estate agent.

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  18. 20
    Matt Thomson says:

    RE: Ray Pepper @ 15
    Ray, no awkwardness need be felt. I felt then and feel now that those were good purchases. I’m also very happy to say that not one client of mine has ever lost a home to foreclosure or short sale.
    I’m going to do an interesting and potentially risky post here on my blog in the next week, based on this insightful conversation.
    I will call every single client I put in a home from ’06 til current, and ask them this question: “Had I accurately predicted the market when I sold you a home, how would it have changed your current situation? What do you wish had been done differently?”
    I hope they’ll answer honestly, as I am curious to their thoughts. Despite many of the comments above, my original comment has nothing to do with justification. It’s how I feel. I’ve made other investments (all real estate related) in the past few years that have worked out quite well. I still hold that this investment has worked out well as we enjoy our home and aren’t planning on moving.
    The fact not everyone agrees with me or my position is okay. I’ll find out this week if my clients agree, and that’s what matters more to me.
    Was I wrong about how far the market would crash 4 years ago? Yes. With the exception of Tim and Ray, I’d say most other people in the country were too.

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  19. 21

    By Matt Thomson @ 19:

    RE: Craig Blackmon @ 13
    Nothing meant to be concealed here…thought that by simply clicking on my profile you could see that I’m a real estate agent.

    Hey there Matt,
    Nice to see you here. Just a couple of things: There was nothing highlighted on your name to click( still isn’t), so if you want people to see that you’re a real estate agent, fix that, and, by 2008(four years ago) there were a lot of people around who knew that we were in for a serious correction in housing prices. Maybe not so many real estate agents, who tend to drink the Kool-Aid a little more. I was telling people that we were in for a serious correction as early as 2006. But I’m wrong about most things.

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  20. 22
    Ray Pepper says:

    RE: Matt Thomson @ 20

    Matt, I had the advantage of incessant trips to Nevada and California on investor tours during 2005-8. I tried all I could with Devonna Wells on the TNT about what I saw occuring but nobody cared. The CRASH was occuring in front of us but the NW was still being touted as a SAFE place to invest.

    Well here we are in 2012 and I say the same thing again..They all will be coming back in the next decade. Through short sale, deed in lieu, and foreclosure residential housing will remain TOXIC as an investment UNLESS you secure a GEM. There will be no appreciation going forward for many many years. We can all hope for a flat line but in the end the incessant stream of short sales and foreclosures will seem never ending. I’m seeing the GEMS pop up here and there on the Trustee Sales and REO market that can be turned as a FLIP but selling into this market is treacherous…

    The recovery in California and Nevada (80% losses on property value)has yet to sustain any real traction and I expect the same scenario up here…I believe none of the fluff about recovery and laugh at multiple offers being written up by Agents here….Homeowners will slowly becomes less stupid and begin to refuse these Loan Mods terms until they are offered Principle Cramdown…Because, after all, a Loan is not modified in the owners favor unless they drop principle and bring down to current value. Anything else is kicking the can down the road.

    Buyers take your time..The years ahead will prove VERY profitable if you can wait it out and secure a GEM. They will all need to sell far more then you need to buy. Educate yourself at The Trustee sales and see what homes are truly worth going forward.

    Sellers………..May God be with you!

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  21. 23
    wreckingbull says:

    RE: Matt Thomson @ 20 – I don’t think asking your underwater clients if they regret buying is going to be a useful exercise. My guess is that you will get answers very similar to your own.

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  22. 24
    Matt Thomson says:

    RE: wreckingbull @ 23
    Curious as to why you think that. Aren’t those the people that I’m being criticized for? Is the assumption simply that they won’t be honest with me?
    If those are the people that I helped buy in a time that most on this blog are saying shouldn’t have bought, I’d think their opinions are extremely relevant here.
    Assuming I could get honest opinions.

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  23. 25
    Matt Thomson says:

    RE: Ira Sacharoff @ 21
    Thanks Ira–my browser autofills and when I saw my Google icon I just assumed it was there. I manually put in my link this time.

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  24. 26
    The Tim says:

    By wreckingbull @ 23:

    RE: Matt Thomson @ 20 – I don’t think asking your underwater clients if they regret buying is going to be a useful exercise. My guess is that you will get answers very similar to your own.

    By Matt Thomson @ 24:

    RE: wreckingbull @ 23
    Curious as to why you think that. Aren’t those the people that I’m being criticized for? Is the assumption simply that they won’t be honest with me?
    If those are the people that I helped buy in a time that most on this blog are saying shouldn’t have bought, I’d think their opinions are extremely relevant here.
    Assuming I could get honest opinions.

    I don’t think it’s that your past clients won’t be honest, but that they’re likely to exhibit post-purchase rationalization.

    Post-purchase rationalization is a cognitive bias whereby someone who purchases an expensive product or service overlooks any faults or defects in order to justify their purchase. It is a special case of choice-supportive bias.

    Expensive purchases often involve a lot of careful research and deliberation, and many consumers will often refuse to admit that their decision was made in poor judgement. Many purchasing decisions are made emotionally, based on factors such as brand-loyalty and advertising, and so are often rationalized retrospectively in an attempt to justify the choice.

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  25. 27
    Matt Thomson says:

    Here’s a question for those of you (most of you on here) who seem to be pretty upset about real estate agents selling homes during our crash.
    First, Ray, specifically. You own a residential real estate company. Granted, you’re not selling as many homes as I have the past few years, so you clearly can make the argument you’re not putting as many people in bad situations, but WHY are you selling homes for a living if you believe buying homes is not a good move?

    For all of you, is what I’m hearing that you believe that our economy would be better if people weren’t buying homes? Is the main gripe here that people who buy homes in this market are stupid, or is the gripe against real estate agents selling these people homes are dishonest?

    For those of you who claim I’ve lost $100k’s over a few years time, aren’t you the same ones who mocked sellers in the hey day who claimed they had made $100k’s on homes they were living in? The truth is this. I haven’t lost a dime on my home. I won’t lose a dime until I decide (or am forced for some reason) to sell. No different than the glory days when people bought a home and thought they had made money in a matter of months…they didn’t make a dime unless they sold.

    Bottom line for me is that I still believe home ownership is a good move for many, but not all. There’s more to it than money, though money is a part. And like every investment I’m aware of, housing goes up and down. No, I didn’t think it’d go down this hard like some of you did. Congrats on being wiser than I in that. Every single one of my buyers that I put into a home during the past 4 years is still in their home, and hopefully happy (I’ll find that out this week I hope).

    I’m curious what the bottom line is for you guys? Nobody should buy homes anymore? Real estate agents should stop selling homes? People can continue buying, agents can continue selling, but agents shouldn’t encourage buying anymore? I know tone can’t be expressed in writing so this runs the risk of sounding snarky, but I’m curious as to your thoughts? Or is this simply an “I’m right and they were wrong” thing?

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  26. 28
    Matt Thomson says:

    RE: The Tim @ 26 – Interesting…may be the case. I’ll be curious to find out this week.

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  27. 29

    If someone bought a house primarily thinking the downturn was temporary, and expecting a short term financial gain, they’d likely be disappointed. If they bought a house for other reasons, they would be less likely to be disappointed or not care at all.

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  28. 30
    StillRenting says:

    By Matt Thomson @ 27:

    For all of you, is what I’m hearing that you believe that our economy would be better if people weren’t buying homes? Is the main gripe here that people who buy homes in this market are stupid, or is the gripe against real estate agents selling these people homes are dishonest?

    My concern isn’t about whether or not people are buying homes in this market. My concern is that a badly needed correction has been dragged out longer than necessary by government and industry attempts to avoid it (including, for example, industry claims to potential buyers that prices weren’t going to drop very much), thereby trapping more homeowners into underwater investments. If prices were allowed to drop more quickly to their non-bubble sustainable values, fewer people would have been buying during a falling market, which means fewer people would be underwater today.

    Ultimately, responsibility for failed investments rests with the buyers, but that doesn’t mean I have to respect the people or institutions who encouraged and profited from their bad judgment.

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  29. 31

    RE: Matt Thomson @ 27

    “People can continue buying, agents can continue selling, but agents shouldn’t encourage buying anymore? ”

    Yeah, that one.
    As an agent, I feel my primary duty is to represent my client’s best interests. Encouraging my clients to buy represents my own best interests, not necessarily theirs.
    Besides, asking a real estate agent whether one ought to buy a house is like going into a butcher shop and asking if meat is healthy, or going into a car dealer and asking if you should take the bus.
    A couple of years ago I showed a beautiful bank owned Craftsman on Phinney Ridge. I’d been working with these clients for many months, and they were certain that they had found the home they wanted to buy. ” What can we do to make absolutely sure we get this house?” she asked. ” Don’t fokk around, make a full price offer” I responded. That’s not the same thing as encouraging someone to buy. They wanted to buy, and they wanted to buy this house. I’d probably be a lot more successful as an agent if I encouraged people to buy, but it’s not in my nature, I just can’t do it and wouldn’t want to. A real estate agent is not impartial, and their encouragement to buy houses is just not based on any real expertise, other than their expertise in selling.

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  30. 32

    RE: Ira Sacharoff @ 31 – As you sort of note, people usually come to agents already wanting to buy or sell.

    The role of an agent is to assist people in doing what they want to do, not to tell them what to do (absent it being something illegal that they want to do.)

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  31. 33
    Colin says:

    Matt:

    1. You deal in houses, not in homes. Stop the BS. Whether it becomes a “home” is up to the people who live there. They might rent it out, grow weed in it, who knows. Sure, people form emotional attachments to places. One question I asked myself when I considered agents is whether that person was trying to exploit those emotions, as you are, or helping to check my runaway enthusiasms. I’m happy I worked with Ira.

    2. The question is not just whether to buy or not, but how much house to buy. The industry (including lenders) has systematically encouraged overbuying on the argument that real estate is a good investment — that going into debt to buy this stuff was a good idea *as an investment*. That’s the argument that John L. Scott was making, and Tim is rightly mocking him for it. Anyone who tells you, about any asset, that “over the historical long-term it remains a guaranteed return-on-investment” is BSing you and should never be trusted again.

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  32. 34
    jj says:

    By Matt Thomson @ 27:

    Is the main gripe here that people who buy homes in this market are stupid, or is the gripe against real estate agents selling these people homes are dishonest?

    Matt, it’s rare that I post here, but you have inspired me. Could you please ask the above question in a more jaded or biased way? I don’t feel the question is quite trollish enough.

    For those of you who claim I’ve lost $100k’s over a few years time… The truth is this. I haven’t lost a dime on my home.

    Semantically you are correct, but… Actually, if you had waited 4 years to buy your home, you could have purchased it for 100K less by your own admission, so you have lost the opportunity to have 100K less debt. In addition, a normal individual would have had to pay 6% commission on that 100K, but I’d guess you got the buyer’s commission, so you probably only had to pay 3K more for that 100K more of debt. Plus 4% interest over 4 years is around 16K, discounted by 36% (maximum tax break) is about 10K. You mentioned that your mortgage payment is $200 less than comparable rent – between maintenance, insurance, property taxes, I am sure you have more than consumed your rent savings. So now you are in 113K more debt than you would have been had you waited 4 years to buy your home.

    I’m curious what the bottom line is for you guys? Nobody should buy homes anymore? Real estate agents should stop selling homes? People can continue buying, agents can continue selling, but agents shouldn’t encourage buying anymore?

    Agents should have never “encouraged” buying. The ethical decision would be to appropriately educate a client about the cost and risk of buying a house; goading someone into buying a house is shameful behavior, and while I’m not accusing you of doing so, I wonder (especially because you deny that any of your clients ever foreclosed or shortsold) if you have genuinely reflected on whether you have “enthused” someone into a house that was just a bit of a stretch for their financial situation. If you pursue contacting your clients, I would recommend sending them an anonymous survey with a return envelope asking specific questions that are not clearly biased in your favor. Chatting with them in person or on the phone in a friendly manner is likely to give you many answers you want to hear, but may not reflect reality for many reasons. Then again, sometimes it is more comfortable to not have the clear perception…

    I know tone can’t be expressed in writing so this runs the risk of sounding snarky, but I’m curious as to your thoughts? Or is this simply an “I’m right and they were wrong” thing?

    This just makes me laugh. You don’t want to sound snarky and then you accuse us of “I’m right and they were wrong” mentality. Really? In what tone could you have spoken those words where it would have not sounded similarly snarky? Don’t blame the shortcomings of written communication for you being a condescending jackass.

    If you are here to actually learn about this community’s perception of the housing market, I’d offer that you can 1) browse the archives and 2) ask your questions in a respectful and non-confrontational manner. Until then, expect to be treated as the troll that you behave like.

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  33. 35
    David Losh says:

    RE: Matt Thomson @ 27

    And I’m happy to answer.

    Real Estate agency has gotten to be a joke because way too many people entered the business without loving the business. Calling your clients is an interesting tactic, but it is a part of the contact thingy the Brian Buffinis talk about.

    You are selling houses, as Colin says. As an agent you have a choice whether to “write ‘em up” or not. Most agents are happy to write ‘em up. It’s not necessarily good for your business, but it does help your sales.

    My last buy, very last buyer about four years ago, came into my office with all her research. She had $100K for a down payment. She already owned a new construction house in South Everett. I advised her to sell the house in South Everett while she still could, and buy the cheapest house she could stand.

    She didn’t want to sell the house in Everett, and after making an offer on what was an OK deal, went through the inspection with flying colors, then she thought better of it. She wanted another “town home” listed by the girl friend of a seller. I negotiated a selling price below market, but advised her against the purchase.

    She found another agent, and I released her from her Buyer Agency Agreement. She bought the home, and within a year she had a loss of about $150K between the two properties.

    She is happy with her her purchase, but she knows she lost money.

    Had she listened, she could be in a fairly good position today. She’d have money in the bank, and her payment would be much lower. She could be on her way to paying off the first house she had an offer on. It is a good house, in a good location, with a motivated seller.

    So I lost the sale, but still talk with the people who referred her to me. I’m still encouraging people to sell while they still can. There are things to buy, but most people don’t want to hear about that. They are to busy buying “homes.”

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