Paper Money - Paper Tales

Tuesday, October 31, 2006

I See Dead Buyers!

Here’s a funny request for advice from a home builder to from BusinessWeek’s “Lonely at the Top” editor.


Dear Lonely at the Top,

I'm a homebuilder, and I think I'm going insane. I walk past my unsold houses at night and I swear there are ghosts. I hear voices, babies crying, couples arguing. And even though it's almost Halloween, I know they aren't the Undead. They're the Undecided. The people who make my life miserable day after day by not making up their minds. Their ghosts are living in my latest subdivision, Les Banlieues. How can I get some peace?

Cracking Up

Dear Cracking,

You seriously need to take a break. Have you considered a less stressful line of work, such as catching rabid dogs?

Escaping your living nightmare won't be easy. This past week it was announced that median new-home prices fell almost 10% over the past year, the worst decline since 1970 (that's right: the year Jimi Hendrix died). Nothing like the fear of overpaying to keep people on the fence.

You're already doing some things right. Naming your latest subdivision Les Banlieues gives it a nice Gallic flavor, never mind that the poor banlieues surrounding Paris are being torched as we speak by angry youths. Also, I see from materials you enclosed in your tear-stained letter that you're also building condos in Miami. That's a good bet. At this rate, you ought to be able to unload them in, oh, 25 years.

But there's more you can do to get out of your predicament. These days all the big builders are throwing in freebies—granite countertops, plasma TVs, swimming pools. You've got to go your rivals one better.

Offer to come to the house at 6 a.m. with a pooper scooper and walk the dogs. Promise to help the kids with algebra. Say you'll get on your knees and polish Dad's shoes every day before he walks out the door. Swallow your pride.

If that doesn't work, I have one word for you: China. The Chinese are going crazy for luxury housing subdivisions such as Chateau Regalia in Beijing. Here's what you should do: Dismantle your houses (the way they're being made these days, that should take about 15 minutes), pack them into containers, and ship them to Shanghai on a cargo ship that's going back empty. Finally—a U.S. export the Chinese really want!

I hope my advice has been useful, Cracking. Write back and let me know how it's going. Meanwhile, Happy Halloween!

Saturday, October 28, 2006

Religion, Superstition or Just Plain PANIC!!

Is it me, or is there something unseemly about the idea bashing a statue of Jesus’ adopted earthly father into the hard soil with a hammer on the hopes that it’ll help move your home?

Read this comical, yet somewhat sad excerpt from HDTV’s Buying and Selling Homes Forum.


Have you heard about burying a small statue of St Joseph upside down in the front yard to sell your house? Well I did it with the house before this and it did sell and I currently buried a St Joseph with this house. I do say my prayer to St.Joseph everyday. Sounds crazy but a few people I have spoken to have sold their houses in less than 2 weeks and they swear by St Joseph. I know it sounds crazy but I figured anything that works in selling a house is fair game!( you can purchase a small statue of St Joseph at your local Catholic gift shop they only run like a buck unless you get the "St Joseph house selling kit)

Response 1:

Yes I have heared of it and it worked. House was up for sale could't sell it we buried the statue and it sold! We dug up the statue and still have it. It was worth it.

Response 2:

He's been buried in my yard since July.

Response 3:

It worked for us.

Response 4:

We did not burry anything but we sure did pray a lot.

Response 5:

It worked for us too! He is still outside buried upside down until we close! I also have one in the window. I say the prayer everyday too.

There's no place like home...

Response 6:

I have bought several for friends, who have their homes on the market. The St. Joseph Statue kits sell for under $4.00 on E-Bay and do make a great gift to someone selling a home. Maybe all real estate agents should keep cases of them!!

Understand once your house is sold, you are to bring the St. Joseph statue into your home, and place it in a prominent place, like on the mantle.

Response 7:

I think he helped us! We sold in 6 days and I swear St. Joe had a hand in it! Although, (we were told), burry him upside down, 3 feet from the foundation in our backyard, facing away from the house. We also dug him up after closing and now he stands in our new home.
We got him on Ebay.

Response 8:

I did it six months ago...had to use a hammer to get him into the hard dry adobe soil we have...think I killed him because we are STILL on the market.

Response 9:

I just ordered one on ebaY :P

Competing To The Bottom!

Here’s another “sign of the times” post from GardenWeb’s Buying and Selling Homes Forum. Look at the numbers; Agent says $325,000, they list $319,000, reduce to $299,900, offer at $285,000 - $2000 cash back, still the deal goes south!!


We have been in our house for three years, and the builder is still building in our neighborhood. We have been on the market for 90 days, average DOM is about 140 for the neighborhood. When we listed, the price that several realtors came up with after doing a CMA was $325,000. We listed at $319,900 in the hopes of distinguishing our house from the other re-sales currently for sale. Other sellers started dropping their prices in our neighborhood shortly after we listed, and we are now at $299,900, which is the lowest priced re-sale of our model in the neighborhood and lower than the builder's current base price for our model (we also have many upgrades).

The lower price has generated many more showings, and we got an offer over the holiday weekend. The buyers seemed to be extremely concerned about a quick close (less than 4 weeks), so much so that they made sure that we would be willing to close that fast before they would actually make an offer.

Their offer was $285,000, and they wanted $2000 back for closing costs. They were also planning on 100% financing. We countered at $299,900 with $2000 back to them at closing. We would have come down on the price a little bit for the counter offer, but the closing costs seemed important to them since they were doing 100% financing. We also expected them to counter that, and were willing to come down a little bit, but not more than a few thousand, especially because their closing date would require us to pay for storage and temporary housing.

Well, they refused to respond to our counter offer, so our realtor told us to give them our "best price offer". We told them $294,000, with $2000 back for closing costs, take it or leave it. Last we heard (two days ago), they were still considering our house, but were leaning towards buying our model new from the builder, which they had priced out at $320,000.

What??? First, they needed a fast close and 100% financing, now they can spend almost $30,000 more, wait 6 months for a new home, and have the $15,000 deposit that the builder requires? I don't get it. Since we haven't heard back from them, I'm assuming they decided not to buy our house, and I'm beginning to wonder if we can possibly compete with the builder.

Monday, October 23, 2006

How Rude! Buyers Strutting Thier Stuff Like Peacocks!

Here's a fine example of seller outrage! In this excerpt taken from GardenWeb's Buying and Selling Homes Forum, a seller is having a really hard time coping with the new realities of the housing market.


I'm in the NE & all the "Winter" States understand that selling at this time of the year in the NE is not a good idea & the closer we get to November & the Holidays the worse it is to sell a home.
My first sale in August ( I sold it on the first day) fell through. I put the house house on the market for the second time at the end of September. It's been a struggle since then. Although my house is priced right & in great shape, the buyers are non-existent in my price range. The starter homes are still selling, but homes over $500,000 are sitting.

Anyway, my point is that out of the four-five legitimate showings in 3 weeks, I may have a possible "bite".

However, I am furious how the prospective buyers & their realtors are acting. Now that it has become the buyers market, they have gotten totally rude & disrespectful to the seller. They expect the seller to jump hoops.
I get a call from a realtor that "these people" who have seen my house twice (spent 1/2 hour the first time & 1 whole hour the second time) are strongly considering my listen to the rest of the conversation-

The realtor: "They love your house. Of course, you understand that they have other options...and they want to (DON'T HAVE TO)get their house READY & sell it so they don't have to carry 2 mortgages..."

OMG, I bit my tongue! I didn't say much other than..."well, we cannot wait either...whatever"

What kind of buyers are those? Buyers from hell?
The realtor doesn't care which house she sells them (mine or another option). She is manipulating them so she gets their 2 commissions.

I am so sick of buyers being treated like gold and the realtors are trying to take total advantage of the sellers. This realtor is obviously giving me a warning that the buyers are in the drivers seat (I would have to reduce the price & give them terms), by telling me that they have other options to look at. They want to sell their home...blah, blah, blah.

Buyers sre walking around, strutting their stuff like peacocks. I got news for these buyers, I am NOT considering them as buyers because the time it would take to get this deal done would bring us to Spring. It would be easier for me to take the house off the market for the Holidays & re-introduce it afterwards, rather than dance "this TANGO" with them.

Why are buyers acting this way? They will be sellers too.
What makes them think that they will buy low, get their terms & torture the seller? I'm not a mean person, but I hope they will get theirs. Then they'll understand their actions when they try to sell their home!...and what's this with the buyers making general statements that the prices have to come down? THEIR prices have to come down too when they sell! I'm only asking 4-5% increase per year (12yrs of owning), which is unheard of in this town. Some peole are asking triple from what they paid 3 years ago.
Anyone else experiencing rude buyers & realtors?

Grumpy Flipper

Listen to this grumpy "flipper" rant while taking it on the chin by the housing bust... another greate excerpt from the Washington Post's "Real Estate Live".


Ashburn, Va.: I'm so mad at my neighbor. I bought my new home here in Ashburn last summer and plan to sell it next year (after holding two years to avoid taxes) to make a nice return on my investment. The problem is my neighbor is trying to sell his house (very similar to mine) right now and he keeps lowering his asking price. Each time he lowers his price, I see my potential profits next year getting squashed. Doesn't he realize he's hurting the comps for all of his neighbors by doing this? I don't think he is acting very "neighborly" by doing this. I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. Its people like him who are ruining the market for the rest of us. If he would just refuse to lower his price, we could maintain our comps and everyone would benefit. What can I do to stop him?

Kirstin Downey: Wow. Interesting question. There's nothing you can do. It's his house, of course. It's frustrating, to be sure. One word of advice: Don't resort to violence.

Seriously, he may just be desperate to sell. Perhaps he has an adjustable rate mortgage that is rising, or maybe an option ARM that is resetting to a much higher monthly payment. Maybe he's getting a divorce or has lost his job and doesn't want to talk about it. Or maybe he wants to move to Tahiti. (I do sometimes, don't you?)

I hear from many, many buyers and sellers each month, and many sellers are finding the only way to sell a home amid this growing inventory is to cut the price. Perhaps last year's prices were just illusory after all.

Saturday, October 21, 2006

Penn Quarter Conundrum

This excerpt taken from a session of the Washington Post's "Real Estate Live" Q&A with Maryann Haggerty seems to say it all...


The Lovely Penn Quarter, D.C.: (Q) My friends and I came up with the idea last year that we could make a living by buying condos, living in them for two years, selling for a big profit and repeating. The appreciation would be more than we could make by working and the profits would be tax free. What could be better, right?

So I bought my first condo in Penn Quarter at the end of last summer. Now all my friends have decided to hold off. They say that they aren't sure real estate is "it" anymore. But I'm counting on my condo to appreciate significantly over the next two years to help me pay down some credit card debt I've been carrying for a while.

My condo hasn't really gone up in value since last summer, but I'm thinking the market is just taking a healthy breather before skyrocketing again. Should I be getting worried at this point or are my friends just being chicken littles during the market's pause in appreciation? I don't want to own my place if its not going to increase in value soon. Help!

Maryann Haggerty: (A) You, my dear, are a real estate speculator. In a normal market, no one would expect that owning a home for just two years would provide enough appreciation to cover the cost of selling, let alone to live on. But I'm assuming that you have a very high tolerance for risk, and that's why you decided to take this gamble. And it was a gamble, not an investment, right? You knew that?

Friday, October 20, 2006

Born of Necessity and Pragmatic Functionalism?

How's aboout we write our own Tale on this one... How in the world did this house ever come to be and WHO in thier right mind is going to pay $629,000 for it!!??

I dont know about you but all I see is a pile of boxes!

Apparently, this 1200 sqare foot pile of "rotating" plywood boxes with laundry facilities specified as "LAUNDROMAT" will soon be featured on HGTV.

But don't get all excited and race right out this Sunday to catch the open house... It's being shown by "appointment only".

Here's the listings description as it reads on its listing sheet:

"Live in art! Extraordinary single-family house constructed newly in 2006, will be featured at hgtv, dwell and wallpaper magazine. There is no house like this. Marin plywood siding with sparurethane finish, rotating 3 boxes with 4 corner-skylights at each level to gain more natural light. Total 9 skylights. Innovative contemporary design using materials and forms that are born of necessity and pragmatic functionalism. Showing by appointment only."

Open House Sham.. Young and Rich? No.. Flippers!

Read this post from the Real Estate Boards... Would a "flipper" actually stage a fake relationship in order to "move product"? You decide...

Note: This story is from last January but apparently the luxury unit is still on the market!!


I am so shocked by the unethical and economically unsound methods that people are now using to sell flipped properties that I'm posting my experience here.

My partner and I spent Sunday afternoon last November shopping open houses in Boston's South End, Beacon Hill, and Back Bay neighborhoods. It was a gorgeous New England fall day and there were other lookers, small in number, but more than recent weeks. If any were serious buyers, I didn't see it. All open houses of the half-dozen we saw were uninhabited and empty, and most have been on the market for months.

This itself indicated the real market change, but the shocking experience about what's happening in Boston's market occurred at an open house on one of Boston's most prestigious streets.

We were greeted by a charming and attractive young couple -- a well-dressed metrosexual and his beautiful, tall blond wife sporting a 2.5 carat emerald-cut diamond wedding ring. They told us that they were the owners, and that the realtor was ill. They said that this was their dream condo, but that his wife had accepted an medical internship out of town, so they had to sell this renovated condo and the home they were currently living in. He said he was an architect. She said that she was a dental student, and that they loved skiing and kayaking -- we could imagine her hauling skis all the way along the many-story walk-up. They had never lived in this property, but renovated it beautifully with an abundance of carrera marble. Cookies were baking in the high-end oven used for the very first time. Though I'm appalled and angry at the deception I believe that the seller perpetrated, I give him credit for having good taste.

Assessing what we saw as we walked away, we talked more about the couple than the property, who were more intriguing, but something didn't smell right, and it wasn't the cookies. Were they flipping this place? Young and rich? They were asking for nearly a million dollars for a property that they were renovating while living elsewhere. And she was a student with a really big rock.

So we did some web investigation when we got home. Of course we can't be certain about the conclusions we drew from what we found, but we're certain enough to write this anecdotal account.

Fact 1: The property was purchased in late spring of '05 for about $650K, and was listed at about $950K in late summer of '05.

Fact 2: The property is listed in the name of two men: the man who introduced himself as the seller, and another man who resides at the same address.

Fact 3: The mortgage on the property is a 30-year option interest-only ARM at about 2.125% for about 80% of the purchase price, adjustable monthly beginning in summer '05, with a cap of about 10%. The signatures on the mortgage are the two men who purchased the property, who also took out an additional line of credit of 10% of the property, leaving a 10% down payment.

Needless to say, these facts are not consistent in any way with the story we were told at the open house. We conclude that the seller's account was a total artifice -- a lie intended to create the appealing image of a rich, young, successful couple who really wanted this nearly one million dollar property, but had to give it up for professional reasons. The woman's ring had to have been a big CZ. I'm naturally a skeptical person, but never expect to be lied to in this way by a seller. During the showing, the seller referred to the woman as his sweetheart, and they discussed their plans for children. If he lied so blatantly about his life, what else would he lie about? This is not a seller with whom we would be keen to conduct business.

We also concluded that the flippers and speculators in Boston are becoming desperate in this changing market. The monthly mortgage payments on this property listed a few months ago at nearly a million dollars (now reduced about 5%) are less than $2K (and half of that with the interest-only option), but change monthly with rising interest rates.

The old advice "caveat emptor" should be used especially at the peak of any market. All the information mentioned above is freely available over the web -- be sure to use it in the consideration of any purchase.

It's January now, and the same property is still on the market. Information about sellers is available at:

Massachusetts Registry of Deeds

as well as the town websites where you are looking.

Thursday, October 19, 2006

Nutcase Neighbor - Stealing Open House Signs

Read this recent post from the GardenWeb's Buying and Selling Homes Forum... It seems neighbors are starting to play dirty!


This is long, but worth it.

You may think this sounds made up, but it really happened on Sunday.

We're in a subdivision in suburban Milwaukee, and our home is listed with a limited service broker. There are several homes for sale in our neighborhood, some using limited service places and some using full service places. We advertise our open houses, both via signage and through the newspaper. We advertised an open house on Sunday from 2-5.

As we left for the Race for the Cure on Sunday morning (at around 8:30am), I placed an "Open House" sign at the entrance of the subdivision. This happens every Sunday, and usually everybody takes them down after their open house. There are some laws that regulate these signs in the city, but the city pretty much doesn't care as long as it doesn't get obnoxious or nobody complains. Signs have been in this location for years - it's never a big deal. I talked to the guy whos yard these signs are in - at least on the very outside of his lot. He said it would be fine, and it's never a problem. He said he doesn't like it when they're out there all week, but he said he knew that I always took mine down promptly. Cool.

Now it's noon, and we're just getting back from the race. My sign is gone. So are the other signs. The only one that's left a sandwich board sign for a Realtor's open house…at this one:

This house is about a block away from the signs.

Hmm. I first ask the guy I talked to before, and he said, "I saw they were gone about an hour after you talked to me." I then stopped by the Open House and asked the Realtor. I wouldn't expect a Realtor would do this, buy hey, I should be able to shake it out of them. Nope - she knew nothing. I happened to glance into her car on the way back to my car, and no signs.

So I put another sign that I had in the van out. My wife dropped my off at the house so I could clean the place up and get things ready in peace (without the kids).

It's now 1:55, and the Open House starts in 5 minutes. I question whether or not I should go down and check the signs. I almost talk myself out of it, but then I decide what the hell. I drive down there. Just as I'm approaching, I see the homeowner of the house above WALKING THROUGH HIS YARD TOWARD HIS GARAGE WITH MY OPEN HOUSE SIGN IN HIS HANDS. I slam on the brakes, exit the car, and bound up his (crappy) yard and demand to know, "what in the hell are you doing with my sign!?!?!" His kids are there. Neighbors are outside. I'm very loud. I'm very big. I'm very very intimidating. He is none of these.

He starts out with, "this sign is illegal! You can't put those there! You're breaking the law!" I then demand he return my sign. "No! I'm throwing it away!" I then pull it away from him. He didn't really have much of a choice there. I then start walking back to my car. The guy follows me. "Get out off my property! I'm calling the police!" I then said, "go ahead - you can then explain why you've stolen my property and the property of others." He goes onto to scream things about me "breaking the law" and that "I have no right to put those signs there" and that it doesn't matter if I got the property owners' permission. Hmm. I then asked him why he decided to take action against these signs now. Could it be that he owns a piece-of-crap home and that due to his incredibly poor landscaping and decorating job that he's sat on the market for this long? I'm I my car now, and then, get this, HE REACHES IN THE PASSENGER WINDOW AND TRIES TO GRAB MY SIGN. I pull back on it, and explain that if he does that again I'll open my car door and surely knock him out - I then smile and said, "I promise I will." He lets go.

Back to my house. I call the police. Open House visitors show up. It goes great. I explain it to the officer. I basically said, "if, for some reason, the sign was out there illegally, I would expect to hear from either the police or the city - I don't expect some nut to start enforcing the law for himself. Apparently, in his eyes, the law applies to only those in direct competition with himself." The officer agrees, and goes to "talk to him."

An hour later the guy pulls into my driveway. He tells me that he's put all the signs back out there, and that he's sorry and got "hot." He then tries to hand me a $20 to pay for the sign that he wrecked.

"Just shake my hand and apologize," I said. "I don't want your money."

There you go. Fun and games in the selling my home.

Top Real Estate Blogs Blogarama - The Blog Directory