Realtor: "you will make a minimum of 10% every year you live in the house"
I received an e-mail from a reader that I will post below. I want you to read the readers e-mail, and then the realtors reply. Make mental notes of anything that sounds a little "fishy" to you.
---Here is the e-mail that a reader sent to a realtor:
Why would someone pay 319K for this house when in 2002 it sold for 195K.. Haven’t you realtors seen yet that prices are coming down, why should I line the pockets of a greedy seller? You guys are going to have to start lowering prices, soon…MLS 25162980
---Here is the reply from the realtor...pay special attention to the 3rd paragraph:
Great question; agents don’t set the prices. Agents act for buyers and sellers. Agents can make recommendations to sellers, but most sellers think their homes are worth more than the market value. Homes in the Puget Sound area have appreciated at about a 20% annual rate over the past two to three years. That is beginning to slow and most experts predict they will go up about 10% this year.
If you don’t own real estate, you should. You have to live somewhere and if you own you will make a minimum of 10% on the total purchase price for every year you live in the house. Most people can buy with no money down and in some cases ask the seller to pay their closing costs out of the purchase price. I’d recommend you use my website or any website to search for properties and find something you can afford and have me or another agent help you buy a home. Don’t wait for prices to come down, they will not come down. They will go up more slowly, but they will not come down. That has nothing to do with agents; it is simply based on the growth in population and a fixed amount of land.
If you want to find out how much you can barrow call Dxxxx and ask him. It is painless. Dxxxx – 425-xxx-xxxx.
Thanks for the email. Have a great week,
Ok, anything jump out at anybody in there?!?!? How about the fact that the realtor says you will make "a minimum of 10% of the purchase price of the house every year that you live there". If this house was a stock, that would be a major no-no and you could be put on probation and possibly lose your license...but hey, it's real estate...it always goes up!
How about the part where he states 2 times in a row that property will NOT go down...just appreciate more slowly. So property will appreciate more slowly...but based on his first sentence...at least 10% a year. How many of you would put your money in a mutual fund that never goes down, and will ALWAYS go up at least 10% a year?!?!? Sign me up!! But wait...there is no such investment that GUARANTEES that kind of return.
And finally...we get this precious jewel of information. The reason prices won't go down is because the population is growing and they aren't making any more land. Sounds good in theory, but we know that there are other factors that drove up prices, not the scarcity of land. Yes, there are areas that are completely built out, but not in the general context that the realtor was speaking.
I xxxxx'd out the names and other contact information of the realtor. I'm not here to out anybody...I'm here to point out the crap that the "experts" will say to make a deal happen. If you are reading this blog, you probably already know that property does not go up 10% a year, every year you live in the house. But, there are many people who have no clue, and will take this "experts" advice as gospel, and go into massive debt because it is a "can't lose" situation.
So there you have it...
Today was a pretty big day for this blog. I went over 100,000 page views and I have had over 66,000 unique visitors and since I really got this thing going less than 2 months ago. Please keep stopping by, and getting the word out to others. I want to thank everybody for the e-mails, comments, and donations that have been made...keep it coming!! We are just getting to the part where things are starting to get interesting. This thing will take years to play out, and I look foward to blogging through it all!
Thank you all!