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Author Archive: Irvine Renter

Cash listing services provide sellers the ability to lower their commission costs while still obtaining MLS exposure, but sellers must still do most of the work. Sellers who eschew real estate agents must overcome a lack of exposure. Putting a sign in the front yard is generally not sufficient exposure to ensure a seller obtained the highest and best offer for their property. Many will post on Craigslist or other classified ad services, but many buyers don't look there, so these methods often come up short. In order to obtain the best exposure for any potential sale, the owner must show the property where buyers actually look: that means listing on the MLS. Cash Listing Services I still consider Cash…[READ MORE]

Homeowners can save the 6% commission and sell their homes on their own, but it's more difficult than most people think. realtors commissions are too high. Does the work they do really warrant 6% of the sales price? On a $1,000,000 home, which is increasingly common in Coastal California, the commission is $60,000! Many ordinary people don't make that in an whole year. It's very tempting to look for lower-cost alternatives -- or the lowest cost alternative off all: selling a house without a realtor. While this is tempting, it's not as easy as just refusing to pay real estate agents. One of the first problems would-be sellers face is valuing their home. Sellers almost universally believe their properties are…[READ MORE]

US lenders completed 6,324,545 foreclosures over the last ten years, and it should have been worse. The mortgage and foreclosure debacle of 2008 was cut short by government intervention. Is the mortgage and foreclosure crisis resolved or merely delayed? Most people believe the mortgage and foreclosure crisis of 2008 is completely resolved, a misperception fostered by a financial media eager to disseminate good news. Most people believe an improving economy created jobs for struggling borrowers, and those hard-working Americans cured their loans of past-due payments: all is well. While the image of the noble American borrower recovering from the perils of the Great Recession appeals to our sense of collective pride, reality is somewhat less noble. Most borrowers were hopelessly overextended before the…[READ MORE]

Republican Jeb Hensarling, an industry shill who funds his campaigns from too-big-too-fail banks, is the Capitol Hill voice of the financial services industry in Washington. Now that the US taxpayer directly insures over 80% of the loans in the housing market, the ultimate financial coup for the too-big-too-fail banks would be a relaxation of lending standards allowing them to underwrite profitable, high-risk loans at taxpayer expense. The financial services industry spends millions lobbying Washington to remove the taxpayer protections in place that prevent unsound lending with taxpayer backing. If they were to succeed, they would inflate another massive housing bubble, profit from the origination and servicing fees, and when it implodes, they would leave taxpayers holding the bag. Through their…[READ MORE]

Many people truly don't understand by helping "struggling borrowers" was a bad idea. It was. It encourages even more risk taking. Many issues compete for our attention in the wake of the housing bust. However, the importance of these issues is not equal. Underlying most of them is the central problem of the housing bust: moral hazard. Every decision we make in life has consequences. If we save regularly and invest wisely, the consequences are wealth and peace of mind. If we spend foolishly and speculate wildly, the consequences are periods of feast and famine, delusions of grandeur, enormous entitlements, and when times are tough, unbearable stress. Positive results come from good decisions and visa versa. That’s how people distinguish…[READ MORE]

Other necessary costs of ownership consume a quarter to half the amount borrowers could potentially put toward loan payments. When lenders calculate how much they are willing to loan to any particular borrower, they measure the borrowers income from wages and other sources and calculate how much of that monthly income is available to pay the debt. One limitation on borrowing is the front-end ratio, generally 31% of verifiable gross income. Lenders assume that a borrower can afford to spend 31% of their gross income on all housing related expenses and still have enough money left over to pay all other obligations and have a life. This 31% is called PITI, or principal, interest, taxes, and insurance. The lender is primarily…[READ MORE]

Low or falling mortgage interest rates are better for housing costs than high or rising rates. From a consumers point of view, higher interest rates are bad because borrowing money becomes more expensive. All things being equal, higher mortgage interest rates make for a higher cost of ownership and visa versa. When potential homebuyers actively look to purchase a home, shopping around for the lowest rate can save them thousands of dollars over the life of the loan. The Consumer Financial Protection Bureau launched a Rate Checker to help consumers verify if the rate they are quoted is good or not. Since rising mortgage interest rates raises borrowing costs, it's also detrimental to home prices, so nobody in real estate…[READ MORE]

Americans now confuse renting money from the bank for true home ownership. “The system of banking we have both equally and ever reprobated. I contemplate it as a blot left in all our Constitutions, which, if not covered, will end in their destruction, which is already hit by the gamblers in corruption, and is sweeping away in its progress the fortunes and morals of our citizens. Funding I consider as limited, rightfully, to a redemption of the debt within the lives of a majority of the generation contracting it; every generation coming equally, by the laws of the Creator of the world, to the free possession of the earth he made for their subsistence, unencumbered by their predecessors, who, like…[READ MORE]

If new mortgage rules will prevent housing bubbles, prudent fence-sitters have no urgency to buy for fear of being priced out of the housing market. Fence-sitters are potential homebuyers who for a variety of reasons are not ready to buy today — they could buy, and they may buy in the not-too-distant future, but for now, they contentedly rent and watch the market. Fence-sitters don’t buy for a number of reasons: they are unsure about their jobs, they want the flexibility to move, they recoil against high house prices, they worry about future resale value, they can’t find the right property, they just aren’t ready. The real estate industry hates homebuying fence-sitters. The goal of most realtor advertising is to…[READ MORE]

By removing the ability of local jurisdictions to deny approvals for conforming developments, nimbys will no longer prevent much-needed new construction. In most parts of the world, anyone who owns an improved lot may build on it. As long as the plans conform to the local building codes and architectural guidelines, nobody can stop the owner from building on their own lot. No government body exercises discretionary approval power over the owners right to build. This is known as "As-of-Right" permission. Essentially, the phrase establishes a legal entitlement that arises when the plans conform to all legal codes. Land development in many parts of the country is subject to as-of-right zoning. In these jurisdictions, a governing body must approve any…[READ MORE]

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