Apr
17
2008
Speechless in Real Estate
By Charles TurnerThe cat seems to have my tongue. I’m having a hard time deciding if I am nuts, brilliant, a glutton for punishment, lucky or stupid. The truth probably lies somewhere in between and honestly I don’t need help figuring this part out even though I’m sure you’d like to comment.
We bought a house today (an accepted offer with a May 30 closing date). It is a 1906 contributing property to the Alphabet District. It needs work. Lots of work. I’m planning on writing more about it as the process goes on but I am going to stop if the comments get snide, sarcastic or mean. I don’t need it. We’ll all probably learn something (I’m the one that gets to pay for the mistakes) so with that: expect more to follow.
Charles – Congratulations! I suggest that we all get together for a work party to kick off your new project. Bearlee can bring cookies, Uncle Git a barbecued pig, and I’ll supply the beer. Please post the address of your new place below. Thanks.
Charles, this is off topic, but I’ve decided to get my real estate license, and would be interested in any advice you had as far as selecting a company to work for. Things to look for, and things to look out for.
Tiffany,
Demolition is fun. I’m going to hold off with the address until at least next week, in part out of respect for the seller while they get their ducks in a row. If I am coy with some of the particulars I probably have a reason that may become clearer as it proceeds.
Teddy,
Yes, off topic but in the meantime a thread written on 8/26/06: http://www.portlandrealestateblog.com/realestate/2006/08/so_you_want_to_.html
Feel free to email about it and we can talk about it outside of this forum.
Editor deleted. Appears to be spam.
Teddy, I hope you can keep your mouth shut if you represent couples buying a house because they wanna raise those ‘burdens on society’;O) Doubt if many would stick with you as their realtor knowing your beliefs.
Right after closing will you tell us if you think you got a really good deal?
Ahhh, so Teddy, this is why you want housing to remain unaffordable for the masses…6% commissions are much sweeter on $500k than the piddly $300K home.
Soemething like that.
The children of well qualified buyers are a different story. Now we’re talking precious assests to society.
So here we go again about renters being the piss of society and home owners the superior beings…god help me.
So Teddy, tell us a bit about yourself. Where and when and how much did you buy? What type of loan did you take out? Who does your taxes? Did you ask them about your interest on mortgage tax DEDUCTION? What’s your current occupation and why do you want to leave it to become a realtor?
Let’s get to know each other…
FYI, Teddy, I pay $4K MORE in taxes a year as a renter since I know longer have the interest on mortgage and property tax deduction. Though I do not pay property taxes directly I will guarantee my rent in Forest Heights goes toward the $216,923.00/yr in property taxes the owners pay (and they get to deduct that!)
Be careful about categorizing folks. Just because I can’t afford $2k+/mo in housing expenses, $900/mo in childcare and $800/mo in tuition costs doesn’t make my child a burden on society. I made the right decision in selling the house instead of going into debt or as a lot of people do, dip into the equity until there is none.
Ummm… are you trying to convince me or yourself? Cause if its me save yourself some time cause I’m really not interested.
Teddy, considering you didn’t know how property taxes and interest on mortgage are DEDUCTED off of taxes it’s difficult to take anything you say seriously.
But I have to say, either you are a very confident person or rather ignorant for wanting to enter a RE market where sales are down 40%.
Actually Bearlee I did know. I referred to writing off mortgage interest, which is correct. From Wikipedia:
“In income tax calculation, a write-off is the itemized deduction of an item’s value from one’s taxable income”
I’m pretty sure referring to a mortgage interese deduction as a write off is perfectly acceptable way to put it. A quick google of the phrase “mortgage interest write off” shows it used that by many people who are much more knowledgeable about taxes than me in articles on respected financial websites.
So your either confused or lying. I’ll give you the benefit of the doubt and go with confused.
I don’t dwell on the negative. Yes sales are down, but so are PMAR membership renewals by almost the same amount. Which means a lot of crappy lazy agents are leaving the game. As usual we see capitalism at work. If you want to make money and be succesful in the world, you have to look for opportunities, not excuses.
Markets are cyclical, and this flat spot in Portland real estate isn’t going to last forever, if even more than three or four more months, and I want to get in now while the agent herd is being thinned, not in nine months when things are hopping and people are trying to get back in. Negative people may be correct in the short run sometimes, but in the long haul they get buried every time.
A deduction is not a dollar for dollar tax break. You said that I should have been able to “write off” all $12K. In your terms I did but that did not cut my taxes by $12K. It is not dollar for dollar. That would be a tax credit.
I think the misunderstanding is credit vs deduction.
I hope new and potential homeowners understand this.
Teddy what is your contact info — looking for a good Realtor and so are some friends.
Teddy, I guess the only way to see if we are on the same page is that have you redo your 2007 taxes and remove the property taxes and the interest on mortgage and see what you come up with. If you use Turbo Tax or something similar it is very easy to do. Just don’t hit the ‘save’ button when you rerun the numbers. Note your begining numbers, ie, taxes due or refund and then compare notes.
Lots of us negative people are watching in quiet glee as an even larger number of idiots lose their asses on overpriced dwellings and condos. Over the long haul I’ll still have my savings and the ability to save 20-25% of my income that isn’t going towards a declining asset.
PS. Capitalism isn’t at work in this situation in any way whatsoever. Tinkering with interest rates, keeping them artificially low for too long which drove this bubble isn’t free market capitalism. Setting the most important price of all, the price of money, went a long way towards creating this debacle. In fact, there’s little about our system that resembles capitalism. The government bailing out developers, lenders and stupid homedebtors is not capitalism. It’s [shudder] socialism.
I find it troubling that you take pleasure in other peoples pain. I have no trouble with people taking a bearish view on market, whether its real estate or stocks or futures. But when you start describing the feeling you get from watching other people suffer as “quiet glee”, it’s frankly disturbing to me. Personally I like to see people succeed and flourish.
Teddy, this sometimes hostile discussion gave me a great idea. Potential new home owners should utilize eFile with the IRS or Turbo Tax etc to see their tax savings when determining if buying a home is right for them. It would be a great learning tool.
And since I am obviously having a difficult time explaining credit vs deduction with property taxes and interest as I am just an RN not an accountant let’s have anyone else chime in w/ their personal tax experience. What I am trying to explain to Teddy is that just because you pay 12K in property taxes and interest you DO NOT get a 12K tax break, ie you do not pay 12K less in taxes.
As for those who say I am always negative, I do believe our housing will bounce back, I do believe our economy will recover. It’s just a matter of time.
And to FTHB, although I’m suspiscious you want my contact info for reasons other than finding a good Realtor, I am not currently a Realtor. You are however on the blog of someone who I think everyone here would agree is one of the better Realtors in town, Charles Turner. So if your truly in need of someone, your already in the right place.
Bearlee, I understand that mortgage interest and property taxes aren’t credits. I think most people equate a write off with a deduction from the amount of income used to calculate your tax, not a credit thats reduces the amount of tax you owe.
Hey, how about Merrill Lynch going up Friday after anouncing all those write downs in their earnings report.
Teddy teddy teddy,
Its ridiculous to chastise a potential buyer for being gleeful about price declines.
And BTW best of luck in your new profession. You have great timing.
Naysayer is not a potential buyer, and he,s not gleeful about falling prices giving him an entry point into the market, he’s gleeful that there are homeowners who are loosing their homes, and whose families are suffering as a result. If someone’s happy about a market correction giving them an opportunity to make a move they feel will better their financial position, then hey I’m all for that.
Teddy, you just got through SLAMMING me for ‘losing’ my home. I did it the legitimate way. I sold it before things got ugly. Now you are asking for sympathy for folks that bought more house than they could afford, took out equity to buy more toys, took out funny loand and were shcoked when their payments doubled, and believed RE only went up?!?! What gives, Teddy? Why slam me but everyone else is the victim?!?!
Ted buddy, or shall I say daycare, you find it amusing that housing bears are anxious over the rising prices of houses in Portland and have taken some enjoyment from people forced to “live in Troutdale”, that I’m a loser who can’t make it in the most fabulous of the capitalist cultures, that bearlee is a f*ck up who sold too early. Gee, that all sounds so altruistic.
It’s sort of how happy it makes homedebtors when they read yet another Willamette Week article focusing on the fictitious rising rents in Portland. It validates their decision to buy and brings them much self-satisfaction.
If this society is going to look down on people with enough sense not to pay 300K for a 2BR 1BA fixer-upper that consumes over half their income and chides them for their financial responsibility, those same people are going to laugh their collective asses off when the arrogant get taken down a peg or two. Or three. Or four.
Do you even know what’s going on out there in the world? Let me tell you again. This real estate orgy has led to an economic situation that threatens to consume us. The machine is coming to a halt but all you can focus on is your equity. And you want us all to rejoice for you while you bask in the glow of your wise decision. But that’s not enough for you. You want to belittle others’ decision not to be part of the madness.
Via IP address, Teddy is not Daycare. They are the other point of view to the “bubblers” so I would encourage everyone that does not share their view to honor it. BUT it goes both ways.
I’m going to fore go any credit/deduction debate as I am not an accountant and Teddy will discover quickly as a Realtor that we tread a very fine line between giving tax and legal advice and not.
Teddy, just to feed my curiosity: are you planning on going into real estate full time or to save commission as you build your personal portfolio. I have no problem with either scenario as either falls within the legal framework of the current laws. Everyone knows that I think the barriers to entry to be a licensed agent are ridiculously low.
What’s via IP address, and how do I use it?
Charles, the answer is both. I’ve been beyond disgusted with the last two agents I used, and frankly feel that had I had access to the RMLS I would have been able to do better than either of them with a weeks preperation to review the standard forms involved and time to make friends with someone at a title company. Aside from that I’ve become very interested in real estate over the last few years, and feel like I have the ‘sphere of influence’, a little Realtor lingo there, to get into the game.
I agree that barriers are to low, at the same time I’m not sure it really matters and heres why. I read a stat, whose source was the NAR, which said that something like 8% of all agents are responsible for over 80% of the real estate transactions that happen. This confirmed what I already thought, that out of the thousands and thousands of agents in Portland maybe 1,600 are doing any real action and the rest are selling a few houses every year for friends and family. Doesn’t sound like people are exactly flocking to the partimers, although I believe someone could do this perfectly well part time if they were bright and kept focused on expanding their knowledge base. I suppose we need them all though, because at the end of the day they create the structure that seems to truly be the only way to have a fluid market. Remember five years ago when everyone said that online brokers would flush 90% of all agents out of business. Yet the broker model persists almost unaffected. So soon we will be brothers in arms as full time Realtors!
I’ve been beyond disgusted with the last two agents I used. How did you come to find them?
In my opinion, your view to low barriers couldn’t be more wrong. If a member of the public goes to any Realtor there should be a standard knowledge and experience so that you don’t end up disgusted with them. There is a standard but it’s so low a flea could trip over it.
Perhaps there should be a personal transaction class of license where you can represent yourself (thus saving commission) but you can’t represent the public. I can see the pitfall now though: EVERYONE has a personal transaction license. There might be a good idea here if someone can flush it out.
I’m thinking long term exit strategy for myself. Do you have an entry strategy?
What are the barriers to exit? It seems much easier to exit the real estate industry than enter it.
Well lets hope the really good idea doesn’t turn out to be the Justice Department forcing every MLS in the country to provide equal listing access for FBO’s. See, I sound like a Realtor already.
One was a recommendation, the other selected after interviewing about six potential candidates. The first was related to a long time friend, and in the long run that probably strenthened a long term relationship that’s provided me with many benefits over the years, so that experience I can eat when I really look at it. The second talked a great game during the interview, had been doing this awhile. Complete deterioration after the listing agreement was signed, like flicking a switch. By the end I was honestly wondering if she had some kind of personality disorder. You know, I’ll own that one too. I took my foot of the gas during her interview, and I should have flushed things out a little further than I did.
Well, I’ve signed on with an outfit called OnlineEd and have begun my studies to get my license. I would have to say that if your not very motivated to round out your body of knowledge, and invest time and energy into getting additional insight, then what you absolutely need to know to get a license is just about enough to hopefully keep you from getting sued. Probably not enough to go right out and advocate for someone in a transaction though. My guess is most Realtors menatly white out 60% of this information within a month of finishing their course work and passing the exam.
Charles you weren’t alluding to having the right of homeowners to sell their personal property without a license revoked in your last post were you? If you want to see a major backlash against the real estate industry, that line of thinking is the way to get it going.
I think that California is going in the right direction by requiring college course work to be completed prior to getting a license. I believe that some type of two year program, that included an internship would go a long way to shoring things up. What do you think?
I would love to see a college degree or even classes of some sort required. As you will find out Teddy once you start actually being a Realtor, the online education needed to pass the test has NOTHING to do with the actual application of real estate. If you sign up with a good company, they will offer you training in the day to day business including prospecting and the forms (Prudential’s class is 3 weeks and required for all new agents). A lot of smaller companies don’t have that training. When I started 8 years ago I didn’t have any training. Back then you didn’t even have to take the online class, you could just challenge the test. Which I did and I passed. Some formalized teaching would have been great in hindsight. But you figure it out as you go along.
“Perhaps there should be a personal transaction class of license where you can represent yourself (thus saving commission) but you can’t represent the public.”
Why? And who would set the standards for a
revamped system? The state? NAR? I think barriers to entry should be even lower. One should have the option of challenging the test for the license, as Jenny said she did. Classes can be a waste of time for many learners.
I think that prospecting techniques are definetely a huge gap in the material, but it seems like they stick to covering the nuts and bolts more than the marketing. Fortunately there do seem to be a never ending supply of books about real estate, so I’m in the process of sifting through, and trying to discover what I think will work for me.