Ruthless

This question reminds me of Jim Cramer's break down about ARMAGEDDON. I put together a YouTube video combining the two events. I couldn't download the Colbert Report video so I added other pictures. You can watch the entire segment on Comedy Central. - Tue Nov 11 2008, 10:32

My real job is to train children to feel the force of good and protect the world from evil. I encourage helping others and building strong friendships. I promote confidence and self esteem. I bestow hearts, brains and courage. I teach people that there is no place like home and that good wins out over evil. I help others to find their treasures and I grant their wishes.

I am the fairy godmother. - Sun Sep 23 2007, 01:37

I had an agent team and then I fired them. So now I am a FSBO. I thought I got past my anger (not over, just moving forward) with them until I see someone else post a question that shows another wrong doing by them. So then I doubt myself and I feel sorry for people that know less than I do about real estate.

As my profile says, I'm here to wake up the agents that live in a world of "unknown unknowables" and help the consumer find the right path for them. I'm just afraid that if I sound like a raving lunatic, no one will hear my "words of wisdom".

Ruth - Fri Sep 21 2007, 18:27

Bridgette and The Walkers: How come I couldn't phrase it that clearly? "How are you suppose to know what your agent doesn't know?" Oh wait, I did phrase it that clearly the first time and when proof reading it sounded as if I was saying I should know MORE than my agent. Yes, Bridgette, I'm dizzy too. I'm glad you all figured it out though, I think?

The problem with, "I don't know, let me do some research and get back to you on it." Is that I don't know enough to ask that question and the agent doesn't know there is a question that they need to do research on. That's clearer, isn't it? Wait, Ute's phrase, it was my AGENT who was unconsciously ignorant. Crystal clear now.

But the MOST important distinction that the Walkers made is the difference between honest mistakes and stupid mistakes. I gave my agents tons of slack for their honest mistakes that cost me thousands of dollars. My agents worked extremely hard. But when they made stupid mistakes, that is when I fired them. When I spoke to the Broker in Charge I literally said, "I can understand that she made an honest mistake but when she said blah, blah, blah afterwards, that is completely unacceptable." And I meant really stupid.

Thanks,
Ruth - Fri Sep 21 2007, 15:20

BTW, everyone got TU. Bridgette, I would recommend you. Somehow what I wrote didn't sound that way. The typo below should be "I" instead of "is". It took me a while to figure out what I meant to type after, "you are right".
Thanks,
Ruth - Fri Sep 21 2007, 14:08

Deborah and Sylvia: I agree that not only in "more cases" but also in MOST cases that a buyer or seller are better off with Realtors than on their own. That is why I am so frustrated. I consider myself to be of average intelligence and far more experienced in real estate than the average consumer. And I couldn't and can't figure out how to find and exceptional agent to represent me. I've spent over a month on this forum and wish I could hire so many of you.

PLEASE feel free to use me as a referral. Top Trulia Voices Agents feel free to contact me personally if you would like me to provide a reference for your potential clients. I will tell you exactly how I would rate you to your clients. Everyday consumers, I don't get a referral fee and not ALL Top Trulia Voices agents rank the same. If you are considering one because they are in your area, feel free to get my opinion.

To answer Bridget's question, let me ask another question.
Do I sound like a FSBO lunatic? Would you "avoid me" if you were a buyer's agent for someone interested in my home?

Mansur, is it appropriate to make an cultural correlation comment if it is a compliment? You are the wise old man on the mountain who speaks few words.

And last, Ute, I'm awarding Best Answer in record time because you are right, is just need a vacation and also because for the profound phrase: "unconscious ignorance." I'll be using that a lot in the future. Oooh, maybe that can be the title of my Agent vs FSBO book that I will never write.

Thanks,
Ruth - Fri Sep 21 2007, 14:01

Congrats Svetlana Casey on Best Answer. Second place was Bill's lottery. In my case, lowering the price could not make up for the excessively high taxes. Homes worth twice as much as ours have lower taxes.

One of the reasons I put "luck" as a criteria is more the right place at the right time. Everyone loved our house and said the price was great. The only concern was that taxes. So they would want to wait and see what happened with the appeal. We were at the right "place" in regards to condition and price but we were at the wrong time because of an interested buyer wanting to wait. IF that same buyer went and saw another house that they didn't care for as much and while they were discussing it, there was a price reduction, they were in the right place AND TIME. If they looked at it after the reduction, they might not have considered it the same way. Just like the smell comment. If someone burnt microwave popcorn the night before and had a last minute morning showing, that stupid little glitch could cost the sale.

I remember the very first home I had, the wife who was wearing perfume had attracted a bee inside the house when she arrived. As these serious buyers were going over the offer at the dining room table of the house, the wife was stung by the bee. They never completed the offer. - Fri Nov 7 2008, 09:53

I agree that Andy hit the nail on the head - "homes are selling "quickly or not at all". I disagree in this market with price, price, price. If you miss on the price going out of the gate, it doesn't matter how low you go, it still might not sell. Same thing with all three Price, Product and Promotion - they have to be perfect day one on the market. So, are all the homes that aren't selling missing one or all of these qualities the day that they go on the market? Or is it just luck that the right buyer comes along and prefers your house over the other new listings? When ten new listings come on the market with all three Ps but only one buyer, the other 9 can get stale before the next buyer comes along. What do you think?
Ruth - Tue Sep 16 2008, 21:32

PLEASE, REAL ESTATE AGENTS correct me if I'm wrong. THIS IS A VERY IMPORTANT MESSAGE TO EVERYONE!!!

Jenna:
I recently experienced the same sort of issue. Because of the poor housing market, all the pressure on "companies" "helping" the homeowner, and the difficulty in getting financing, YOUR situation is the
* * * * * UP AND COMING NEW SCAM!!! * * * * * *

We were in the process of negotiating a contract for a LEASE PURCHASE which is different from a LEASE OPTION or RENT TO OWN. I was familiar with Lease Options but had never heard of a lease purchase. Because we were still negotiating, we were relying on our real estate agent's advice and hadn't yet talked to our attorney. The Illinois contract has a 5 day attorney clause but with this sort of situation, you need to have more than one contract. Also, our attorney clause doesn't allow you to alter the "price". I believe that if I didn't have the sort of INVESTIGATION SKILLS that I do, we would be in a similar boat as you right now. Except for the fact that Patti Pereyra (our Realtor and contributer here on Trulia) also gave us some exceptional advice.

Patti's most important advice was that this Lease Purchase is just like a traditional purchase in terms of the "out clauses" and if any contingencies were not met, the buyer could get the Earnest Money back. In our case and possibly yours too, the buyer had a financing contingency that didn't expire until after loan approval two years in the future. We were in the process of negotiating an iron clad contract that if for any reason the buyer couldn't close, we would not only keep the Earnest Money but also any rent and ALLOWANCE TOWARD THE DOWN PAYMENT.

The reason I think this might be your situation too is because of the "ESCROW Money." With an OPTION, the buyer gives you a non-refundable amount of money for the "Option to Buy" OR NOT TO BUY your home in the future. The "EARNEST Money" is sort of the "down payment" which if all contingencies are met and the buyer then defaults, the seller is able to keep the EARNEST Money. If however all contingencies are NOT met, the buyer gets his EARNEST Money back or "refunded". Now, the ESCROW Money is the portion of the MONTHLY PAYMENT that is NOT considered RENT but is instead applied toward the "down payment" at the time of closing.

OK, is that all clear?

So, here is the SCAM PART . . .

They live in the house for two years and then they use the "out clause"/contingency (such as not getting loan approval or the appraised value came out below the contract price) or they decide not to go ahead with the Option to Buy. Since they never have any intention of actually buying the house in the first place, the contract is probably for full asking price or better yet higher ("Oh, in 2 years the house will be worth 10% more so we are offering you 10% over asking price.") which got the seller and the agents all excited. Then they say that since they are giving you full or higher than asking price, that the seller should give them a full or higher credit toward the escrow/down payment.

Let's say your house is really worth $270,000 but you are asking $300,000. Your mortgage payments are $2000/month (principal, interest, taxes and insurance). The going rent for your home or similar is $1500/month. During the two years of the buyer "renting", the seller is paying down the principal (hopefully). Since the buyer doesn't actually own the home, so why should he pay your taxes? Basically, why should someone pay more rent than the going rate? If the seller is "losing money", that's his problem. This is all part of the negotiating set up.

The buyer has 10% for the down payment and wants to accumulate 10% over the next 24 months in order to qualify for a conventional mortgage. They offer you $300,000 for the purchase price and monthly payments of $2000/month. This means the Earnest Money would be $30,000 and the Mortgage Escrow needs to be $1250/month ($30,000/24). So, you are able to pay the $2000/month but they are only paying $750/mo in RENT.

Two years go by and they try to get financing. The house only appraises for $250,000. The financing or appraisal was an out clause. They say, no we don't want it if it's only worth $250,000, give us our $30,000 Earnest money back PLUS the $30,000 in monthly escrow. Not only did you not sell your home but now you have to give them $30,000 out of your pocket essentially. - Wed Nov 5 2008, 17:38

I'm not an attorney and you should look at your mortgage documents. I believe they cannot put a lien on a different property. However, if you do not pay off your mortgage in full because the mortgage is more than the house is now worth, they have the right to sue you for the difference. If they win the lawsuit then the judge can put a lien on your other properties. - Wed Nov 5 2008, 16:20

Sometimes information is received from tax records. It sounds like an addition was put on and the tax records were never changed. - Wed Nov 5 2008, 16:13