Monday, May 25, 2009

"Trust"?!

Hope you saw the LA Times today, "Realtors abandon a listing ship", about online sites like Redfin displacing traditional agents. The concluding paragraphs are breathtaking:
Not everyone, however, is likely to be as savvy as Gold when it comes to buying a home, said Michael Darling, a Pasadena agent ....

"I've sold a couple of houses to buyers represented by Redfin," Darling said. "They're very analytical, left-brained people.

"Some people still just want to trust somebody."
Yes, a real estate agent is talking about "trust" of all things as the reason to use him!

Put that in the context of this email from reader Richard:
I walked through this house a few months ago and spoke with the realtor.

There are two very large discrepancies in the following text:
See Virtual fo photos and awesome floorplan.. Move right into this charming, clean 1800 square foot, 3 bedroom, 1 1/2 bath home in beautiful Sunset Park area of Santa Monica.Freshly painted, one bedroom leads through french doors to a large redwood patio to the back yard, and another bedroom leads through french doors to a small deck as well. Stainless steel Viking 6-burner range as well as a side by side stainless steel sub zero refrigerator.
1- the house does not have a subzero refrigerator. It has a stainless steel refrigerator (I think it was an Amana). 2- the house does not have 1800 sq.ft. as advertised Zillow lists it at 1500 sq.ft. And if you go to the virtual tour there is plan of the house if you add up all the rooms (even adding the outdoor 'decks' you get at most 1500 sq.ft.). I pointed out these two facts to [ ] who represents the house and was told that the refrigerator was stainless steel finish and that was enough and that she had had the house measured by professionals and that it was 1800 sq.ft.

I have no personal ax to grind. I just find it incredibly annoying that they can get away with putting lies in the description. Maybe a mention might be in order?

Definitely! It's also timely to echo WarChestSM in requesting comments refrain from "senseless bashing and name calling" while noting we've been here before, seeking civility in the face of unprofessional behavior.

27 comments:

Anonymous said...

Right

California unemployment rate is over 11% and climbing.

This means that the promised land (90402) is going to come down in price

The people in the 90402 are not immune to the state's economy

Robert said...

When a lot NOM is $500,000. and decent, clean house
is $1,200,00. buyers like me will become interested.
The macro economic news about California, the world's 8th largest economy, has not begun to stabilize. Has it? The US and world economies are in dreadful condition.
Those of you who believe you have a birthright to double or triple the value of your residence in a few months or years will come to reality one day. Hopefully you will not be desperate by then.
As a newcomer to California, I see that this bubble has not yet burst. When the dot.coms blew up and the Nazz went down 80% in 18 months, no one was there to bail out the stockholders. And if home owners do not sell soon at the market price and stop dreaming of yesteryear, there will also be no one there to bail them out either.
Happy Memorial Day.

WarChestSM said...

This post has nothing to do with 90402. The house in question is in 90405 and Westside Bubble (and his reader who e-mailed him) is trying to address a specific point and yet some of you continue to post the same, stale, off topic comments...

Anonymous said...

Robert, take a chill pill, the sky is not falling. The 'disaster' is not upon us. I lived through the New York City bankruptcy in the 70's when people were running around saying sell before your property becomes worthless, etc. It is called an economic cycle, every 2-3 decades this stuff happens. NOMA is not going to plummet, just like the upper east side of NYC did not plummet 30 years ago.

The market does its own thing, and no matter how dark the macro situation looks day to day, there are people with savings and good jobs ready to jump when the deals get good enough. We will not see NOMA land at the $500k level, unless it is under water from a tsunami.

Anonymous said...

"Yes, a real estate agent is talking about "trust" of all things as the reason to use him!"

This is your blog and all, but if you're demanding that we refrain from realtor-bashing, what exactly was that comment of yours supposed to mean? You're basically calling them liars.

Anonymous said...

"This post has nothing to do with 90402. The house in question is in 90405 and Westside Bubble (and his reader who e-mailed him) is trying to address a specific point and yet some of you continue to post the same, stale, off topic comments..."

Do you two live together or something? Jeez, if it weren't for comments like those and ones from anono-realtors talking about how strong the market is (HA!), each post would have 1-2 comments. Is that what you two want?

Anonymous said...

Yes, this is probably just a normal part of economic cycles, but telling everyone to chill and not worry about doesn't sound like a strong recovery strategy. We are not entitled to recovery. It has to come on the backs of something and it's looking like the same, stale product globalization might not work that well this time.

Anonymous said...

"The 'disaster' is not upon us. I lived through the New York City bankruptcy in the 70's when people were running around saying sell before your property becomes worthless, etc. It is called an economic cycle, every 2-3 decades this stuff happens."

Wow, how out of touch with reality can you be?? Or rather, how short a memory/historical understanding do you have?

This is NOT your usual cyclical economic downturn- just look at the macroeconomic data. You have to go back to the Depression to find anything comparable.

To call this a "normal" cyclical contraction is like calling the unprecedented rise in house prices in CA and elsewhere during the last decade just "normal" appreciation.

I think there is every reason, still, to be wary of what's to come.

Anonymous said...

My husband and I also looked at the Sunset Park 90405 listing you are referring to when it first went on the market in 2008 for $1,099,000. We asked the listing agent how motivated is your client? Her reply was "How low are we talking about...bottom feeder low?". Not only is the house on a busy street, but the listing agent called a potential buyer a "bottom feeder". Not a good call. BTW, the house is still on the market, but now at a reduced price of $999,999.

Anonymous said...

"We are not entitled to recovery. It has to come on the backs of something and it's looking like the same, stale product globalization might not work that well this time."

Stale product? You must not be in the tech or entertainment sector, which has a boat load of activity happening locally. R/E is local, and local tech and entertainment folks are going stronger than the national economy. Check with the VC or I-banking guys - they are busy, and expect to get a lot busier in Q3.

Jeff said...

"Check with the VC or I-banking guys - they are busy, and expect to get a lot busier in Q3."

I'm a "VC I-banking guy". I have more deals than ever in California that i can look at. I will be very busy in Q3. But you are missing the point. If there are too many deals chasing too little money, the price of the deal i pick is going to be very low. The price of the deal i dont pick will be even lower.

JBR said...

" or entertainment sector, which has a boat load of activity happening locally."

I'm in the entertainment sector. Studios are cutting budgets/salaries for *everybody*, marketing companies are having layoffs, agencies are consolidating, etc. In short, while "the biz" is still humming along, the free spending days are over, and this will definitely have a negative effect on home buyers/owners budgets going forward.

Westside Bubble said...

This is your blog and all, but if you're demanding that we refrain from realtor-bashing, what exactly was that comment of yours supposed to mean? You're basically calling them liars.

Yes, I know it's a delicate line between pointing out conflicting statements and bashing. Say it, just without name-calling, perhaps?

Anonymous said...

Look - it is obvious to most of us that the West side is heading lower

people in real estate have to persuade at least some potential buyers that real estate has hit bottom - if they don't persuade anyone then there are no sales

let's just put aside the motivations of the people posting here and focus on the facts

Fact is, while there are still thousands of people desperate and hungry to live North of Montana, very very few of them can afford to buy at today's prices.

The demand and desire for homes North of Montana is not relevant - what is relevant is the demand and desire among those that can actually afford it

Anonymous said...

Hundreds of tech startups may help California recover and may have some impact on the broader nation, but our habitual over consumption is hard to satisfy and without the expansion of our bellweather consumer product companies and brands the recovery will take forever while innovative new tech is turned into marketable applications and not just superhyped IPO's for potential game changers.

Anonymous said...

"The demand and desire for homes North of Montana is not relevant - what is relevant is the demand and desire among those that can actually afford it"

That very credible anon the other day said that he and his peers are all buying at $4 million, so there you go.

Anonymous said...

I'll join his group, just let me move some money around real fast and I'll be right there.

Anonymous said...

By the way, the nature of this topic is such that it is nearly impossible to prevent this thread from becoming a realtor bashing tirade. I, for one, can't stand brokers and I work in real estate acquisitions.

Anonymous said...

You all sound like a bunch of blowhards.

Robert said...

To the writer, another anonymous, who said that NYC came back after they nearly went bankrupt....my Dad had a very wealthy friend, a CEO of a NYSE company, who lived in a coop on Sutton Place. The maintenance even got too much for him and he sold the apt for a dollar. It took 25 years for NYC to have its very own California-type upward never-ending spiral until the spiral reversed. Oh, he was long dead by then.
This unwinding is also caused by the lack of financing as all you mavens know. Tell me how many buy for cash at these levels. Look at the bond market today: flooded by Treasury offerings and everyone thinks rates are going up and very quickly.
That will help housing a lot, won't it.
Then there is the California fiscal crisis. Will Spielberg and Intel bail us out of that, too.

Anonymous said...

I agree that it's hypocritical to call for an end to the Realtor-bashing, while at the same time acknowledging that they are NOT trustworthy on account of their inherent conflict of interest with their purported client. To say nothing of their general lack of financial understanding. This is like having a blog on the financial crisis and asking people not to bash those that contributed to the crisis while profiting.

Realtors are salespeople, not experts in real estate. Huge difference, which very few consumers understand.

I urge you all to read the following piece from a great real estate blog. It is NOT "bashing", it's factual and will open your eyes.

http://www.doctorhousingbubble.com/commission-money-real-estate-housing-zillow-redfin-ziprealt/

Anonymous said...

stop talking about the realtors

the realtors aren't the ones holding back your income and preventing you from living in the promised land

Anonymous said...

um, what wealthy guy in NYC sells his place for $1????????????

Anonymous said...

my Dad had a very wealthy friend, a CEO of a NYSE company, who lived in a coop on Sutton Place

What a BS story. Sutton place co-op boards were so tight back then, owners had to pay cash and have substantial income and assets just to pass muster. Old money folks did occasionally run out of trust fund dough, but a working CEO would have to REALLY crap out to leave broke. The matter would have made the press - "CEO craps out of Sutton Place, moves to Newark". I call the story complete BS.

Robert said...

To those who do not believe the Sutton Place story. I am sorry but it is true. if you want the man's name, I can supply it to you. he created and owned the majority shares of a huge company many of you have heard of. maintenance costs skyrocketed at a time where there was no price appreciation for decades. kind of like a house under water. yes, he could afford to pay, but why. he had another home in Purchase NY.
Yes, it happened and can happen here but in reverse. What do you think a foreclosure is...a lack of money, a change in circumstances and no hope for price appreciation.
Ask the Japanese...stock market still only 20 % of 1989...20 years ago. Ask Americans who bought stocks in 1929...break even in 1952.
What makes you all doubt that we are not in the middle of the same type of price depression. Ask investors 9 years ago in pets.com, in brocade, in yahoo.
get some perspective. read some history. do not assume that real estate or any asset class always comes back.
one more thing to think about: dramatic price movements, up or down, can only happen when every one is leaning the same way. who would have expected this housing depression would ever happen...esp. not here in California. who would have expected the entertainment business, the defense business and the real estate and construction business all in their own depression. you can argue ad argue that it is turning....if that were the case, the supply and demand statistics would be far different. the number of houses in the fancy areas of s cal. make the total supply of over 2 years on average.....normal is 8 months.
you mavens figure out which way the market is going.

dwr said...

"who would have expected this housing depression would ever happen...esp. not here in California."

I think you're asking that question to the wrong group.

Anonymous said...

LOL we moved here 3 years ago, saw the writing on the wall and rented after many years of homeownership. In my lifetime CA real estate has always been very volatile and without any special education or training I thought the fact that we were in a bubble was obvious. What I did not see was the depth of the bubble. I thinkw e are in for a long ride.