The Collected Works of Author and Blogger Larry Roberts

Archive for 2012

Negotiating the sale of residential real estate is no more difficult that negotiating for any other product of service that does not have a fixed price; however, due to the colossal cost of houses, the process is more important financially than negotiating for other big-ticket items like automobiles. A mistake made while buying or selling a house could cost as much as a new car; sometimes such mistakes could pay for many cars. Skilled negotiators can obtain favorable pricing and terms without the assistance of a broker, but the novice who is inexperienced at this process often will not. Novice negotiators can benefit from using a professional real estate agent. Perceptions and Motivations of the Negotiators When two parties enter…[READ MORE]

Last week I published a post that predicted that the Federal Reserve will start bailouts by performing principal reductions for underwater homeowners. I wanted to detail exactly how did we reach that stage. So, I wanted to briefly detail the last five years of housing bailouts.  It was just an impossible task to sum up in a few paragraphs due the sheer number of programs. If fact I should have have created this list first, would have made writing easy.   I will attempt to name the program, the beneficiary of the program, and a brief description of the program. California local programs are not listed here, because I'm sure that there are dozens if not hundreds of local and state…[READ MORE]

Back in the early 1970s, Richard Nixon took America off the gold standard. It was a watershed moment in monetary policy the implications of which were not recognized at the time. As long as we were tied to a gold standard, theoretically, we could run out of money. We couldn't spend any more money as a country than what we had in gold to back it up. Once we were off the gold standard we ceased to be a currency user, and the United States became a currency issuer. Unlike a household or an individual that can run out of money, a currency issuer can simply print more. The only restriction on a currency issuer is inflation. If they print…[READ MORE]

The restricted inventory condition we are dealing with here in the Southwest has caused prices to go up. However, for buying to keep pushing prices higher, interest rates must keep falling to sustain affordability at higher price levels. In a market like ours where demand is less than robust (most increased demand this year came from all-cash investors and hedge funds), any decrease in affordability is going to hurt sales. At first it will show up in decreased sales volumes. If affordability continues to crumble, prices will begin falling again. Housing Affordability Begins to Slide Published: Tuesday, 11 Dec 2012 | 12:21 PM ET By: Diana Olick -- CNBC Real Estate Reporter It is a double edged sword, no doubt.…[READ MORE]

Lenders in California are placing their faith in the success of loan modifications. Of course, to them success can mean something different than what it means to a loanowner. Success to a lender can be defined as obtaining a few more payments prior to a short sale or foreclosure. With prices rising, lenders benefit two ways from loan modifications. First, they get cashflow from non-performing loans. They know this is likely temporary as about 50% of loan modifications fail each year, but some cashflow is better than none. Plus, since prices are rising, when they do finally approve a short sale or foreclose on the property, they will recover more of their original capital than if they were to foreclose…[READ MORE]

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