Weekly Twitter Digest (Link Roundup) for 2010-07-03

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

27 comments:

  1. 1

    On the rental story, it doesn’t say the timing of their decision, but I would guess it was prior to the first credit crisis in 2007, and that what they were thinking was to ride the real estate market up with two pieces of property instead of one. I can see why they did that because that was exactly the type of advice that I was getting from numerous sources in 2007 when we moved houses. Two things kept me from doing that though–the tax free sale provisions of residences and the hassles of only having one rental (not to mention not wanting to be too over-weighted in real estate).

    It sounds like they contemplated the possibility of having an extended vacancy, which is one of the main reasons why a single rental sucks. What they didn’t contemplate is how bad it can get.

    They made a couple of other mistakes, both of which were related to not using professionals, particularly an attorney once the bankruptcy was filed. Just another example of you don’t know what you don’t know, and you don’t figure it out until it’s too late.

  2. 2
    HappyRenter says:

    Rental story: “Their credit was bad. There were red flags. But there are red flags with most people; renters rarely have clean records or most of them wouldn’t be renters. No renter is perfect.”

    Is this true or a prejudice?

    On the other hand, I would not want to be a landlord.

  3. 3
    JChristoph says:

    RE: HappyRenter @ 2
    That definitely depends on the area. I’m sure that’s true in the outskirts and midwest, but in areas like Seattle/Boston, even responsible people can’t afford homes.

  4. 4
    The Tim says:

    RE: HappyRenter @ 2 – You’ll notice in the comments on the post that that one remark got the author a lot of flak. Well-deserved, in my opinion. I don’t doubt that might be true in her personal experience, but I’d bet it has mostly to do with the particular neighborhood her rental home is in.

    Even here in Seattle there are some neighborhoods where many people will be renters by choice, despite having great credit and being highly responsible people, while other neighborhoods will be populated mostly by the kind of red-flag, spotty-record renters the author encountered.

    She incorrectly interpolated her personal experience into a general rule that is obviously not always the case. Regardless of that particular shortcoming, I think the article as a whole is still an interesting warning.

  5. 5
    CCG says:

    “renters rarely have clean records or most of them wouldn’t be renters”

    Like one of the comments said, she should try being a community banker. Then she could find out what a bunch of upstanding “homeowners” we created with the housing bubble.

  6. 6
    CCG says:

    By HappyRenter @ 2:

    On the other hand, I would not want to be a landlord.

    I don’t know why anyone would want to be a landlord, creditor, or investor at this point.

  7. 7
    Pegasus says:

    RE: HappyRenter @ 2 – It’s all true. They are all lazy loser pigs and deserve to be treated as such. That is why it is always OK to overcharge them on the rent and keep their deposits.

  8. 8
    HappyRenter says:

    By Pegasus @ 7:

    RE: HappyRenter @ 2 – It’s all true. They are all lazy loser pigs and deserve to be treated as such. That is why it is always OK to overcharge them on the rent and keep their deposits.

    Sounds like you have had a lot of bad experience with renters. Are you a landlord?

  9. 9
    CCG says:

    “House and Senate overwhelmingly pass tax credit extension through September (a giant invitation for more fraud).”

    I have an idea. Let’s start a program to buy houses for people before they’re born. We can bring demand forward from the infinite future and clear out all the excess inventory today!

    “Mom! Joey made fun of me during recess today! He said I was born $6,800,000 in debt!”

    “Oh, he’s just jealous because your house has TWO bathrooms. And $6.8 mil isn’t that much. YOUR kids will probably be born 6.8 BILLION in debt!”

    “But mom, I don’t want kids!”

    “Now, Doug, that’s no way to talk. How are we supposed to keep the economy strong without more people to take on debt?”

  10. 10
    CCG says:

    By Pegasus @ 7:

    RE: HappyRenter @ 2 – It’s all true. They are all lazy loser pigs and deserve to be treated as such. That is why it is always OK to overcharge them on the rent and keep their deposits.

    That’s a little generous, Pegasus. In fact, by refusing to submit to a lifetime of debt slavery, they’re terrorists. They hate homeownership, they hate apple pie, and they hate America.

  11. 11
    David Losh says:

    The redfin comments bother me because there is nothing there. It’s all hype. Real Estate agents bad, redfin good, redfin for the consumer, Real Estate agents bad, raw data is what we need to look at, Real Estate agents bad.

    There are a couple of hundred Real Estate agents in the Seattle area that are worth the commission. In every market place there are good agents that add value. Broad data is nothing without interpretation relevant to the market place.

    Yes, I have a crystal ball, yes I am a very bad Real Estate agent, yes, there are people who can help you other than me.

    Let me address just two points. Number one, every property on earth is for sale. If you want a new construction home call a builder.

    Number two is that price is subjective. Real Estate people say a property is worth what some one is willing to pay. That’s true. If people want to pay a price over the value, that is an option. Banks, however should be lending on the asset. The asset value is what determines the price of the security. Playing games about promises to pay, are just games.

    We’re on a tech blog, redfin is a tech blog. People are looking for other ways to buy products using technology, but Real Estate is a stagnant item. It’s not portable, it’s not shipped, you do travel to it, but you stay with it.

    When we say location, location, location that’s what you are buying. Each location you are interested in has some one who works there. You pick a location, you pick a style of housing unit, and you make offers. Banks will lend what a property is worth. You, your agent, and maybe an attorney, figure if the property is salable. Problem solved.

  12. 12
    The Tim says:

    RE: HappyRenter @ 8Psst – Pretty sure that was sarcasm.

  13. 13
    Kary L. Krismer says:

    RE: David Losh @ 11 – Which Redfin comments? Half the links this week pertain to Redfin! ;-)

  14. 14
    gloomy gus says:

    CCG, love your comments. One of the pleasures of being a gold-star renter is that you never, ever have to worry about finding a terrific place to live for as long as you wish to stay – landlords who have the best rentals in any city or neighborhood tend also to know the business – they realize solid renters like me are the backbone of their industry, and treat us with respect and courtesy.

  15. 15
    softwarengineer says:

    RE: Kary L. Krismer @ 1

    So True Kary

    I’ve helped a friend and his attorney evict many tennants for non-payment of rent and destroying his unit….my friend didn’t take my advice [or his attorney’s advice either for that matter], get a thorough background check before you rent it out.

    Some landlords never learn. The problem though, getting tennants with adequate job security and backgrounds is like pulling teeth in the Seattle area lately. A friend’s brother was renting to someone with a felony record, the best he could find lately in Snohomish Co to pay his rent.

  16. 16
    mikey says:

    Does anyone know how to find out if the house you are renting is headed to forclosure. My landlord is acting kind of strange and I know he is trying to sell the place. I don’t want to find out when the police show up at my door. What do you do if the police show up. Do you just need to prove that you paid rent.

  17. 17
    3rd Generation says:

    Bad tenants? Squatters? Refusal to vacate? Go see Don Corleone.

    Case Closed. Problem Solved.

    You’re Welcome.

  18. 18
    Kary L. Krismer says:

    RE: softwarengineer @ 15 – Yes, but even after the trouble, if they’d talked with an attorney they would have known that the state court won’t act without an order from the bankruptcy court. A really good theory on why they can be evicted is just that. The state court is going to want the bankruptcy court to sign off on the theory.

  19. 19
    David Losh says:

    RE: Kary L. Krismer @ 18

    My last tenant, and I mean the very last, declared bankruptcy. I wasn’t supposed to talk to him, any time I did his attorney would call. I was a creditor. He even told me he was going to declare before he did. The guy still owes me money, but I’ll run into him some day. His ex wife was very nice about the whole thing, and had him sign over his truck as security. It’s in my driveway.

    I never did back ground checks or credit. I just told people not to steal from me.

    You see my first renters were a nice Christian couple. I owned the property with a partner. The couple were as clean as a whistle, all references checked out. After about three months my partner called to tell me the renters had a dog. Not only did they have a dog but the dog had puppies. They called because there was a gas leak behind the stove. They had pulled the stove in and out so much from rescuing the puppies that it caused a small hole. They had shut off the gas nozzle to the stove, so they wanted that connector fixed.

    When I got there I noticed the front stair was broken. Yes, they had replaced our refrigerator, and my partner paid them for that. They said they had broken the stair moving in the new refrigerator, and yes we needed to fix that also.

    I said, no pets, fixed the gas connection, and was served with a restraining order within a few days. Not a very long story made shorter, it took six months of non payment, and they, along with the puppies, trashed every room. The house got sent back to the bank.

    I was just a kid, and it was my second purchase. From time to time I have been forced to be a land lord. Yes, a lot of people spend time with attorneys, and court, it’s a waste of time, and money.

    I was horrified the first time I saw a land lord go into a person’s home, and move them out. He just did it, and re rented the place. As long as he was going to court anyway he might as well have the property rented.

    What I ended up doing is maintaining the properties on a schedule. I’d be in a property at least once a month for the first three months, with notice, with a repair. I would tell people what needed to be done before they moved in. After that every coupled of months. Another guy I know collects all rents in person. He doesn’t like the mail, and he will barely take a check.

    Remember, you are the land lord. The people who rent from you need to be watched constantly. You are the lord, they are the fief that feed your kingdom. You need to have a boot on the throat of the renters. It’s the only way.

    Anyway, that’s why I don’t have rentals. I buy, and sell. Of course now, if I had kept every property, I would be retired, but that’s water under the bridge.

  20. 20
    David Losh says:

    RE: mikey @ 16

    Ola Pistola! Sorry I got side tracked, yes you just need to show you are in compliance with your lease. Do you have a lease? If not you are month to month, and as long as you’re current with your rent you will get thirty days to vacate. There again you may get six months, or a year at your going rate, or renegotiate with the lender.

  21. 21

    By mikey @ 16:

    Does anyone know how to find out if the house you are renting is headed to forclosure. My landlord is acting kind of strange and I know he is trying to sell the place. I don’t want to find out when the police show up at my door. What do you do if the police show up. Do you just need to prove that you paid rent.

    You can find upcoming foreclosure auctions at a variety of websites, including propertyshark.com
    You can also go to kingcounty.gov, go to records, and do a records for your landlord’s name….If an auction is forthcoming, notice should have been posted on the property.

  22. 22
    Dirty_Renter says:

    By CCG @ 10:

    By Pegasus @ 7:

    RE: HappyRenter @ 2 – It’s all true. They are all lazy loser pigs and deserve to be treated as such. That is why it is always OK to overcharge them on the rent and keep their deposits.

    That’s a little generous, Pegasus. In fact, by refusing to submit to a lifetime of debt slavery, they’re terrorists. They hate homeownership, they hate apple pie, and they hate America.

    Yes, we hate a lot, but we also love a lot….MLPs, junk bonds, h*ll, even considering a looksy @ BP’s bond offerings, depending on the covenants & security.

  23. 23
    OldGuy says:

    You RE pros (& landlords) shouldn’t read this post. Go play with your “Pink Ponies” and recite your mantra that the “Seattle area RE market is special.”

    This post is for dirty renters and RE novices, those of us the rarely if ever post (lurkers.)
    Good, now they’re off to eating bonbons and crying on each other’s shoulders because some renter has done them wrong. When the RE market was hot, many landlords and rental agencies copped a BIG attitude. Acting snotty and being put out to actually do their jobs on dealing with the “dirty renters.” So, the vast majority of renters that paid their rent on time, didn’t cause any trouble or demand constant repairs got rewarded by multiple rent increases and nothing but the reluctant minimal rental repairs. Now the tables have turned, there is a lot more supply to the diminished demand. We don’t have to put up with the snotty attitudes or the landlord or rental agency that can’t get over that a renter did them wrong. This ain’t your housing bubble years market, we renters that have money are a lot more demanding.
    Now look at what happens when someone decides to rent a place. They are given a bunch of forms to fill out; credit report, back ground check, employment verification, pay stubs, you name it. What does the renter get; a copy of the landlord’s driver’s license and deed on the property, verification from all the mortgage holders of all the loans being keep current and how about a criminal background check on the people renting out the property? Lets see, give them first, last and deposit and we don’t even know if they actually have their names on the deed to the property. Take time to choose a place in good neighborhood with the schools and amenities for your family then have to move abruptly because some deadbeat landlord can’t keep current with their bills. Somebody that you have never meet before is going to have the keys to the house where you, you’re family and belongings are. Is this person a rapist, pedophile, pervert or common thief that would empty out your house while you’re away? Remember, they know where you work and pretty much what your work schedule is. Also, when we find a place to rent, do we even ask around the neighbors if they would rent from that person or rental agency again?
    So far all I’ve read is whining about renters as if these RE folk are God’s gift to society.

    Now, back to the regular blogging by the (reputable?) RE and landlord pro’s

  24. 24
    CCG says:

    By gloomy gus @ 14:

    CCG, love your comments. One of the pleasures of being a gold-star renter is that you never, ever have to worry about finding a terrific place to live for as long as you wish to stay – landlords who have the best rentals in any city or neighborhood tend also to know the business – they realize solid renters like me are the backbone of their industry, and treat us with respect and courtesy.

    Thanks Gus. I’m lucky enough to have a solid landlord like that as well. That story does remind me why I would never want to go into that business myself.

  25. 25
    CCG says:

    By softwarengineer @ 15:

    RE: Kary L. Krismer @ 1
    The problem though, getting tennants with adequate job security and backgrounds is like pulling teeth in the Seattle area lately. A friend’s brother was renting to someone with a felony record, the best he could find lately in Snohomish Co to pay his rent.

    “Too poor to rent? Now you can own!”

  26. 26
    MarkM says:

    I’m sure at some point science will uncover the “gene” that tells if you
    were really meant to be a renter or homeowner. So with this whole
    housing bubble crisis I’m sure if they checked the genes of all those
    homeowners who are defaulting on their home loans that nature intended
    them to be renters… ;-)

  27. 27
    Dirty_Renter says:

    OLDGUY – good one.

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