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Great Real Estate Clerk Rant.

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June 26, 2007 – Comments (21)

Just got the following, hearfelt rant in my email box from this guy. I think it speaks to the hubris, bad faith, and frustration we're seeing from real estate clerks out there as they begin to reap what they've sown. With Q1 sales down 24%, and May sales looking even worse, it's easy to see what's got Ethan's knickers in a knot. One wonders if his sales pitch will continue to fall on deaf ears.

 Seth Jayson, I just read your article "Housing Slumps, who's surprised?

I have to say, in my opinion, you are a total jerk.  You actually sound gleeful that the market has tanked.   Why, because you predicted it X number of months ago?  So did 10,000 other talking heads, along with most of us in the real estate business.  No extreme cycle goes on forever, and we all knew it would end.  But we don't get giddy about it, and we don't brag to other people about how long ago we knew.  Even those of us who sold a half dozen homes right before the bubble burst, and made more money than you will make in the next 10 years.  Stick that in your fool's cap.You see, Seth, many people are losing their homes, and other people whose livelihoods are connected to real estate (inspectors, appraisers, repair people, roofers, carpet layers, tile setters, etc)  are losing their jobs.  So maybe you better think about that before you congratulate yourself on being so f_____'n smart.E. Roberts
My fave quote from his web page: "I'm not one of those pushy Realtors!"

21 Comments – Post Your Own

#1) On June 26, 2007 at 3:14 PM, TMFBent (99.82) wrote:

A bit more of Ethan's typical real estate song and dance.

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#2) On June 26, 2007 at 4:50 PM, FoolishChemist (97.05) wrote:

Why does he remind me of some crazy used car salesman?

 

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#3) On June 26, 2007 at 5:03 PM, leohaas (32.65) wrote:

I don't feel sorry for the real estate agents. They are pimps: they sell something they don't own.

And if they "made more money than you will make in the next 10 years" just before the bubble burst, why don't they retire? 

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#4) On June 26, 2007 at 7:53 PM, TMFBent (99.82) wrote:

Well, that is an interesting question. The math is also interesting. If we take the median home price in that area ($176,000), multiply that by the half dozen, apply half the usual 6% commission (again assuming they split between buying and selling agents, as they do where I've owned homes), we find out that Ethan's likely to have earned a cool $63,000 on that half dozen homes, before taxes. Not chump change, but I can assure Ethan, the Fool may not bust records on pay, but I do earn more than $6k per year.

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#5) On June 26, 2007 at 8:02 PM, MakeItSeven (32.44) wrote:

"Those of us who sold a half dozen homes right before the bubble burst" are now shedding tears for the "many people who are losing their homes" ?  Not !!  Those slimy creatures who brag about how much money they made over other people's bankruptcy simply want everybody else to shut up about the bubble then, and even now, so they can continue to deceive.

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#6) On June 26, 2007 at 8:52 PM, Imperial1964 (97.87) wrote:

Wow!  You make more than $6k/yr?  How do  I get a job working with you?

;) 

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#7) On June 27, 2007 at 8:47 PM, QualityPicks (32.84) wrote:

Cool. I can see somebody (Mr. Roberts?) is hurting. :)

I will always have mixed feelings about those affected by the housing market slump. Some deserve it, some don't.

But I have felt infuriated and insulted by many realtors during this bubble. They are out there always playing on your emotions, never on what makes sense financially. They are always saying "now is a great time to buy. If you don't buy now you are really gonna be sorry."

So now, the fact that you are saying "I told you so", infuriates them? Well, some payback is nice. Mr. Roberts is the real jerk here.

It sure is nice to see the market turning and unwinding the excesses. Now, I just really hope this unwinds all the way down, not this tiny correction we have had so far.

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#8) On June 28, 2007 at 7:06 PM, billddrummer (44.14) wrote:

I think the real estate business has asked for this rude awakening.  First of all, let's go through the numbers.  As TMFBent rightly points out, 6 homes nets the typical agent in Ethan's area $63,000.  Now, Ethan has to pay for his advertising, his website, his nice car, his nice clothes, his phone bill, his mailers, his staff (someone has to answer the phone while he's out making all that money), his dues to the MLS, desk rent for the broker he works for, meals, gifts, and office supplies.  Now that doesn't include paying for his own house, food, gas, insurance--in other words, the stuff that us working folk already pay for. 

Out of that $63,000, I would guess that he gets about one-third of that to spend.  But remember, he owes income taxes on that money too.  Playing your cards right, you can probably work the numbers so that your taxable income is around $10,000.  But if you're a sole proprietor, you still owe Self-Employment tax on that $10,000--say $1,520.  So now you're down to $8,480 to live on. 

Let's hope he sells more than 6 houses a year.  Looks like he could qualify for food stamps.

I got suckered into a bad subprime loan at the peak of the Northern Nevada market.  Then I decided that I could make waaay more money in the residential mortgage business.  Well, my numbers ended up looking worse than Ethan's, and I couldn't make the payments.  Now the house is going back to the bank, and the value is down 35% from where it was at the peak.  (Was $295,000, now $190,000)   The house is in foreclosure and will be auctioned in August to someone.  But I still get proposals from realtors about how they can help me "save my house."  And I also get mail from lenders saying they can "refinance my loan and give me cash out."  Sorry.  Fool me once, shame on you.  Fool me twice, shame on me. 

I'm going to move out, rent a cheap place for a couple of years, save my money and (maybe) buy again in 2009 or 2010.  To all you realtors, lenders, and others who lived well the past three years:  I hope you saved your surplus.  I know of many people who are leaving the housing market just like I am.  And we won't be back any time soon.

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#9) On June 29, 2007 at 1:16 PM, Allstar13913 (99.81) wrote:

That guy, and others like him, are the ones that created this bubble.  They should be ashamed, not us for telling others they were full of crap.

~Allstar

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#10) On June 29, 2007 at 1:16 PM, Allstar13913 (99.81) wrote:

That guy, and others like him, are the ones that created this bubble.  They should be ashamed, not us for telling others they were full of crap.

~Allstar

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#11) On June 30, 2007 at 12:16 AM, fOOLSONPARADE (95.36) wrote:

Realtors didn't create the bubble.  Greenspan and Feds did after lowering rates following 9/11 and the tech bust as a last ditch effort to save us from an evitable correction.  Everyone else just got on for the ride. 

Hard economic times will bring out the worst in many and we have not seen anything yet.  This cycle has a lot further to go.

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#12) On July 02, 2007 at 6:03 PM, fsc137 (98.03) wrote:

The market for first homes is quite a bit less volatile than other markets, but it does go down a bit now and again.  The odd thing is that the real estate industry is set up so that the industry implodes on market declines.  This reflects the expectations of middle-class homebuyers, who've been erroniously taught that house values never go down, and who consequently withdraw from the market when it declines.  If the real estate industry's message was "houses mostly go up, but sometimes they go down, and they're always worth what the market says they're worth", realator's customers would be a lot more rational about their buying and selling decisions.

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#13) On July 03, 2007 at 12:17 PM, minorgod (58.26) wrote:

TMFBent should be thrilled that his comments have drawn such a heated response...it means he kicked over  the right rock. One person's bust is always another person's opportunity. Any realtor that talks about how they made a bundle of money just before the bubble burst is most likely lying to both you and themselves, wishing they really DID get out before the bubble burst. Anyway, who wants to live in a bubble? It's a land of fear and uncertainty.  If you're one of the people who got out 2 years ago and is sitting on a pile of cash waiting to get back in, then you SHOULD feel a sense of glee at this real estate downturn and you shouldn't feel a bit guilty for it. Despite missing the last part of the bubble and being intimately involved in the real estate industry, I am loooooooving this downturn. I've waited 2 years for it and it's finally here. I love watching all the jack-asses who spent the past 5 years patting themselves on the back for their real estate genius get beat down by a predictable return to the mean. It takes out all those Johnny-come-lately, weekend realestate tycoon wannabees and frees up inventory for those that know what to do with it and are in it for the long term. It also drives people into the stock market which is part of the reason for this recent run-up in the market despite mostly negative economic and political news. Smart investors don't fight trends, they use them to their advantage. Most new real estate investors just aren't smart investors and now they are learning an expensive lesson.

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#14) On July 03, 2007 at 2:39 PM, ctmedic00 (95.58) wrote:

Seth, 

     Why do shady people hate you?  I had to chime in here and say that this guy appears to be the owner of the company he works for so he's paying himself and doesn't have to split the commission any further but what is interesting you have to reduce his pay by at least 6K because his company (him) rebates at least that amount at closing.  This high flyer made approximately 57K before taxes so I am happy that I was able to set the bar a little lower for you Seth.  Since you already revealed that you make more than 6K annually this is even better, if only slightly. 

This guy is doing wonders for his reputation by mailing you here and admitting that he knew the market was going to tank and still he sold overpriced homes to buyers.  He's amusing to say the least.  I do have to admit that appraisers who are losing their jobs can blame clowns like this guy for insisting that the appraisers push the value up to make his pocket (slightly more full).  Yes Greenspan created this bubble just like the dotcom bubble before it but he didn't tell Mortgage Lenders to replace all their underwriters with rubber "approved" stamps.  Plenty of blame to go around but the army of realtors who pushed all the overpriced product were on the front line of the David Lerah, Robert Kyosaki propaganda machine. 

The current foreclosure crisis is a punishment for those who are bad at math.  If people actually did a budget and understood what homes cost (after the teaser rate) they wouldn't be in the situation that they are in.

Seth you are shaking the right trees so keep up the good work and I'll write your boss so you can make more than 7K next year :-)

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#15) On July 03, 2007 at 11:23 PM, spartanhoops (39.22) wrote:

I worked for pulte homes and was selling my home in Orlando as the market was just starting to go down (I knew it was tanking)... the realtor team (top 1% salesperson in Florida) came in and my first question was, how is the market? she and her assistant chimed in that the market was great, etc, etc,... i then responded that I worked for Pulte homes and all our national data says every market is starting to tank from a signup standpoint and I wanted to sell my house now, because in 4 months Orlando would be so !#@#@$ up'd that no one could sell their house... of course that shut her mouth up... she spent a lot of dough marketing my house and found a buyer on day 85... the buyer gave an offer $15k below my list and i took it...  i hate fricking realtors... i'm sure that buyer was told now was the time to buy... too bad buyer, that is what happens when you put your faith in a broken model like the realtor commission scheme and all the flunkies that call themselves realtors...

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#16) On July 05, 2007 at 10:01 AM, freunddoggy (98.81) wrote:

That guy sucks. I love watching real estate agents get smoked. 6 months ago I met a real estate agent who was probably 25 years old and had an $80,000 car. When I asked him how he could afford it, he told me that the real estate and mortgage businesses have treated him very well. After a while he tried to get me to buy a new home. I told him I was renting and he began berating me for doing so. If I was a meek person, I might have succumbed to his onslaught. Instead, I decimated him with facts about the (then) current real estate market and how it was going to fall. He left and found someone else to prey on.

I wonder how he's doing now? I hope his car and home were repossessed.

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#17) On July 09, 2007 at 5:12 PM, BankerChris (43.44) wrote:

What really sucks is that for those of us in the banking industry who made loans on all of those homes (and $80K cars) we've taken a beating lately... Alot of good people have gone bankrupt and alot of bankers have let them do it.  I'm not a banker like that... Those kind of bankers are the ones who have lost their jobs recently b/c their delinquent loans have become so large.  What bothers me about the whole real estate thing is that now sales are down so that means banking is down too... and what's bad about that is our pay has decreased tremendously... we're losing out this year on a lot of employees aned a lot of bonuses, performance and pay raises... when one major market like that starts to go down the rest do as well... Real Estate... Banking / Finance .... we'll see what's next.

 Aside from my blabbering... as Americans we should never revel or be glorified in someone elses shortcoming.  To live in country where we have been blessed so much by God that we have money to invest and can afford alot of luxuries and amenities in life we should never put down those around us who are struggling.  I know alot of very good people who are real estate agents.  I also know alot of real estate agents who are bad people.  There are bankers, brokers, doctors, lawyers, attorneys, salesman, insurance agents, teachers, and any other occupation you can imagine who are good people and there are people in each of those categories who are not.  Don't be mad at real estate agents at the end of the day for driving people to bankruptcy... what about the banker who should have never made the subprime loan and for that matter 5 loans to the same person (mortgage, HELOC, Car 1, Car 2, etc..) ... what about the furniture salesman who made the people w/ the large mortgages fill their homes w/ all of the expensive furniture... and the car salesman who filled their garages with luxury automobiles... and the oil salesman who filled their gas tanks w/ overpriced gas... and the credit card salesman who charged them an incredibly high rate on all of the stuff they bought... and the insurance agent who overcharged them for their house, cars, health, and life insurance policies....

what i'm getting at is that you cannot blame Real estate agents for the housing market tank... just like you will not solely be able to blame bankers when a bank starts to go down... or a manager for a business tanking... our market fluctuates and that's pure fact... we should be mad at those people who are uneducated who have gotten into the middle of the banking, real estate, credit card, insurance and everything else...

If you are in one of those industries you should be educated on credit scoring, investing, and money management, and you should know your customers so that you do not drive them into a mortgage they cannot afford, a car they cannot afford... etc... i'm tired of beating a dead horse...

point is... it's no one but the consumers fault.  THEY signed their mortgage, THEY bought their cars, THEY paid for the furniture, etc...

They didn't know what they were getting into and should have learned or read about what they were getting into before they signed anything... An educated and dilligent person can thrive in any economy... too bad there are not alot of those people out there

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#18) On July 10, 2007 at 5:29 PM, HistoricalPEGuy (64.63) wrote:

If you have a chance to read Freakanomics - check out the section on Realtors and where their motives lie.

 They aren't there to do anybody a favor, they are there to take your money because they "know the market" better than you do.

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#19) On July 11, 2007 at 3:57 PM, TMFEldrehad (100.00) wrote:

Blaming real estate agents for the housing downturn is a lot like blaming stock brokers for the tech crash.

Sure, there are certainly some shady real estate agents who act in a way that suits their own best interest at the expense of their clients' best interest - and I think the same is pretty much true for stock brokers.

Maybe I'm naieve, but I like to believe that most real estate agents, like most stock brokers, are good, honest people who are simply trying to make a living and support their families.

Who is really to blame here?  If anyone is, it is us.  We, collectively, are the ones who kept bidding up stock prices prior to the tech crash.  We, collectively, created the bubble - and we, collectively, are the ones who bid up the prices for housing.  Sure, some brokers, be they stock brokers at the height of the tech bubble or real estate agents more recently, were all too happy to join us on that journey - but they sell these things for a living.  What do we expect them to do when a customer wants to buy something these people are in the business of brokering, say no?

Be it the tulip bulb craze of the late 16th and early 17th century, or the Hunt brothers and silver in the 1970's, or the more recent dot com meltdown, history has a long list of lessons to teach us - lessons which all too many of us choose to ignore.

I agree that dishonest brokers or agents or others who willfully provide misinformation for the sake of personal gain are nothing more than insidious criminals.

But when we look at this, really look at it - the real enemy, if there is one, is us.

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#20) On July 12, 2007 at 6:11 PM, FourthAxis (< 20) wrote:

I'm sure he was bankin' it then, talkin' about his dozen homes or whatever. 

How bout now buddy?  Hope you invested that commish wisely - in more real estate no less. 

It's not like WE gamed the market, we just played it.  Boo Hoo

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#21) On July 17, 2007 at 4:51 PM, dwot (72.69) wrote:

I believe that responsbile public policy could have prevented this mess.

I believe I did a blog about what laws ought to have been around loans with respect to interest rates rather than income levels.  Basically, qualifying laws ought to have been based on fixed rates, say 8-10%, not income level, and there ought to be a requirement that terms be based on what the payment would be at that 8-10% qualifying rate.

This kind of law would keep credit in check and protect people who really don't understand how dangerous credit is at low interest rates.  It would have also prevented some of the hyperinflation in home values that we've seen.

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