Truth About Home Prices

This article doesn't go far enough to explain the reasons for and impact of those give-backs.
For instance, what about taxes to the seller based on a higher sales price? What about a higher real estate commission based on a higher sales price?(is this whole give-back gimmick being driven by realtors?)

An unholy cycle of greedy real estate agents and mortgage brokers-who for a few years made as much as doctors with zero education, and starry eyed buyers contribute to this catastrophe which is a total rerun of the late 80's. As recently as last summer, they were still laughably saying their were "multiple offers". Whenever a buyer(buyers broker arrangements are rare) says a real estate person "looking for houses" for them calls them "my agent" i know they are doomed because the agent works for the SELLER not the buyer.

It's basically dishonest - like the ratings of the sub-prime mortgage loans. But towns and banks also like to see the prices steady and rising, not falling.

So all conspire to deceive the consumer - just like the sub-prime mortgage brokers.

At the same time, the median sales price of single-family houses increased 2 percent, from $250,000 to $254,000.

All this shows is that the homes that are currently being sold are on the higher end of the spectrum as opposed to the lower end. The actual value of homes are still falling.

And guess what, people have been inflating prices and giving back money for closing costs or repairs for a long time. This information is "Hardly Current."

Pam has the right answer above.

All the gimics to prop up prices are going to fail in the near future as inventories force sellers to lower prices and the few buyers who can qualify for loans wait for better bargains. The downward spiral has begun in a big way in Florida, Arizona, California, Washington DC,Ohio. Just zillow a few zip codes in these areas and look at the charts. Its spreading across the country and other parts of the world (Britain, Spain, Germany). Credit is contracting and asset prices are deflating. Once the prices have been adjusted to reflect tighter credit, they will stabalize and everything will slowly start over. It will be very painful process, but deflating real estate and credit bubbles always has been. This will be much worse than 1987. I hope I am wrong.

The "median price keeps rising", not because of any equitable value, but for the reason that the seller is up to his eyeballs in mortgage, and either needs a down payment on a new home or that's the payoff price for the bank. Also, let's not forget the realtor's commission. It is not a "buyer's market" yet.

just another kind of fraud ... credit companies love to pad their pockets ... what do you think that $25,000 "upgrade" cost the homeowners @ 6.5 % times the 30 year mortgage using the interest calculator "rule of 7's" ...($58,660.00)+ another $ 1,600 in the real estate agents pocket - once again the credit companies do everything they can do to drive the economy downward while they make billions, ask around - you'd be amazed at how many consumers have credit cards w/ 20%+ interest rates (when the prime rate is below 5] and now all kinds of unrelated businesses - car insurance, health insurance ... are using "credit scores" to base a persons price quote by ... all they do is screw the consumers - this story is just another way they do it

art wrote:

An unholy cycle of greedy real estate agents and mortgage brokers-who for a few years made as much as doctors with zero education, and starry eyed buyers contribute to this catastrophe which is a total rerun of the late 80's. As recently as last summer, they were still laughably saying their were "multiple offers". Whenever a buyer(buyers broker arrangements are rare) says a real estate person "looking for houses" for them calls them "my agent" i know they are doomed because the agent works for the SELLER not the buyer.

I truly suggest you educate yourself on the agency laws in Connecticut. A buyer unless they opt for no representation, has their own agent who doesn't work for the seller. They enter into a contract with their realtor for representation. The agreement states that the agent may ask the seller to pay the commission, but the buyer is responsible for any unpaid commission due. Buyers are not doomed by working with a buyers representative. Know the facts.

sounds like sellers helping to finance downpayments. Real estate agents and builders don't want the perception of falling prices. You can't believe the reported numbers on any of the data. Here is another fact. I, like a good portion of residential construction workers, are self employed and not working much these days but that is not reflected in any numbers because we can't collect unemployment.

1st time Homebuyers almost always look for closing costs. It may be in the form of a reduced price/credit in a slower market or going to or above asking price on an overpriced home in a hot market. Your theory on inflating the price does not account for this or make sense.

Following are a few links to prove that we are in a housing decline. I could post hundreds more of such articles. Connecticut is not that unique. Its time is coming. Housing prices are inflated due to excessive credit. Credit is much harder to get, thus prices will fall, everywhere.
California
http://www.modbee.com/local/story/173503.html
Spain http://www.ft.com/cms/s/0/5e43160a-be10-11dc-...
Britain http://www.bloomberg.com/apps/news...
Florida http://www.youtube.com/watch...

Nay sayers and doom and gloomers will always find a way to put a negative spin on as a long standing way to "sell papers".
In the examples above as in most cases, give backs fall mainly into two catagories. First, there are the seller give backs for closing costs for those buyers who wish to preserve their available cash.
Second are those who receive seller give backs as incentives for work which the seller could have done previous to the sale. Many sellers would rather offer a give back instead of doing work or up grades that should have been done in advance.
Yes, the increases in home prices has slowed but, the sky is not falling, at lease not here in Connectiuct!
Jack Mulrooney, Realtor
Fairfield and New Haven County

art wrote:

An unholy cycle of greedy real estate agents and mortgage brokers-who for a few years made as much as doctors with zero education, and starry eyed buyers contribute to this catastrophe which is a total rerun of the late 80's. As recently as last summer, they were still laughably saying their were "multiple offers". Whenever a buyer(buyers broker arrangements are rare) says a real estate person "looking for houses" for them calls them "my agent" i know they are doomed because the agent works for the SELLER not the buyer.

Art, I agree there are some not so good real estate agents out there however, maybe a few Doctors and Lawyers too? The fact is that sense the mid 1990's in Connecticut, buyers can contract for their own agent not connected to the seller in anyway. In addition, the educational requirements have recently been doubled to attain a license as well as the requirement for continuing education. To this, many agents take on the additional mandates by becomming Realtors (National Association of Realtors) which has a strict code of ethics backed by law in Connecticut. Realtors are one of only 4 professions that has an ethical coded of conduct backed by a Professional Standards Committee and State Law.
In most cases, the buyers and sellers most commonly hurt by the system are those who believe that they are better negotiators than someone who negatiates for a living.

Jack Mulrooney, Realtor, PSCS, e-PRO
Fairfield and New Haven Counties

Wow, Sherlock, what an amazing find. Did any of your research look into the number of "greedy" buyers looking to make huge profits via "flipping" houses, but caught with their pants down. Needlessly adding to a surplus of inventory homes already on the market.(driving prices down) Did you hear about the investor who bought multiple homes in Las Vegas to do exactly that but the market turned, his timing was off so he tried to suit the builder, because the builder had to reduce prices to keep moving inventory. If people bought homes to live in them our mess would not be so large. I suspect there is a large number of "investors" walking away from these homes, or will be soon, once their personal reserves or the pain of carrying a home they can no longer make payments on becomes too great.

Sue wrote:

<quoted text>
I truly suggest you educate yourself on the agency laws in Connecticut. A buyer unless they opt for no representation, has their own agent who doesn't work for the seller. They enter into a contract with their realtor for representation. The agreement states that the agent may ask the seller to pay the commission, but the buyer is responsible for any unpaid commission due. Buyers are not doomed by working with a buyers representative. Know the facts.

Good for you Sue! As much as I try to believe that people now understand there is true buyer representation, it amazes me that after 14 years, the public still doesn't get it. And as far as education goes, we are held to a very high standard of practice and are required to enroll in mandatory continuing education. YOUR AGENT IS ON YOUR SIDE FOLKS! We are hired to work for you! We MUST put YOUR interests above our own in ALL CASES! OK...Done for now!

I was disappointed that this article didn't also explore the possible effect of this practice on home evaluation for property tax purposes. This practice not only masks how deep the real estate slump is, but in artificially propping up home values it in turn causing inflated assessed evaluations and higher property taxes. I also am puzzled by the closing elusive reference to things becoming "sticky" if the sales price, with givebacks, exceeds the true value of the home.

Who cares if a house sells for $250,000 or $254,000? This is a made-up story with no consequences whatsoever.

Real Estate rip off which inflates the agents profit and keeps the taxes up. These scenrio's are what makes the agents get more money. Remeber they work on a commission of the sale. So when a cash incentive is given back after the sale the agent still see's it in there commission. RIP OFF. Also the Towns and Govenment will not step in because they also profit. Now the average home is actually $5,000 or $25,000 less but on the town records and the books it's inflated so when the assessment and appraisals are being done well of course the town will not take into cosideraton that $XXXX was given back and the house value's are inflated making taxes much higher. Sounds like TAX freud in reverse all because the Real Estate agent doesn't want to give into reality and realize they should be taking a cut in pay...... No wonder foreclosures are crippling the market and the US dollar..... Also the amount of Real Estate Agents is crazy. 20 years ago there were only a bunch, not everyone is an agent. They work off commission so of course prices needed to sore so they can bring home the $$$$...
REAL Estate rip off's

Ffld and NH Cnty Realtor wrote:

<quoted text>
Art, I agree there are some not so good real estate agents out there however, maybe a few Doctors and Lawyers too? The fact is that sense the mid 1990's in Connecticut, buyers can contract for their own agent not connected to the seller in anyway. In addition, the educational requirements have recently been doubled to attain a license as well as the requirement for continuing education. To this, many agents take on the additional mandates by becomming Realtors (National Association of Realtors) which has a strict code of ethics backed by law in Connecticut. Realtors are one of only 4 professions that has an ethical coded of conduct backed by a Professional Standards Committee and State Law.
In most cases, the buyers and sellers most commonly hurt by the system are those who believe that they are better negotiators than someone who negatiates for a living.
Jack Mulrooney, Realtor, PSCS, e-PRO
Fairfield and New Haven Counties

Wow. I would not want this individual to represent me in a "negatiation!" Especially "sense" he needs to go back to grammar school.