Archive for January, 2009
Tuesday, January 27th, 2009
Real Estate Rage
I desperately need to rant about the first-time homebuyers experience that I’m going through at the moment. Sweet jesus, and I thought the Health Insurance industry was arcane and obtuse.
Finding the perfect house is an excercise in mental endurance. Currently, we rent in a city called Melbourne in Central Florida on what is known as the Space Coast. Melbourne is a suburban area situated between a vast bedroom community called Palm Bay, and the rich golf-course riddled region of former grazing land known as Viera. Our initial forays into home searches kept us glued to the Palm Bay area, where it appears developers may have created more homes than actual people to live in them. We were nearly ready to close on a home in Palm Bay when Forbes released an article saying with no uncertainty that the area known as Palm Bay was going to experience a solid 41% drop in value by the end of 2010. Holy crap.
Now, I can’t tell you how many homes we looked at that could have been “it”. Our real estate agent has served somewhat as a sherpa in the frozen wasteland of foreclosures. Oftentimes we would stumble upon a beautiful looking mansion, priced at the cost of a Big Mac, only to find out it was in fact classified as a “short sale”. Short sales, for those uninitiated, means that the owner can’t pay anymore and is trying to sell the house at a price worth less than they bought it for. It requires the aloof approval of a bank to do so, and there are usually a half-dozen agents, brokers and inboxes the deal must go through in order to move at all. Short Sale is synonymous with “fishin’ for offers”, as unscrupulous brokers attempt to incite bidding wars by starting at outrageous lowball offers, the bank as owner remaining clueless to the tactic. Short sales can go on for half a year without coming to a close, and usually end in tears on all sides, with a big fat Foreclosure.
Brevard County is riddled with short sales. They are a plague upon this land.
The MLS, or multiple listing system, an online catalogue of available real estate in the area displays a set quantity of features for prospective homebuyers. The advanced features are not available to regular users, rather, they rely upon the technical proficiency of the Agent you are fortunate or misfortunate enough to have. Ours has had decades of experience, invaluable yes, but he is somehow certain that his fandangled cellphone operates on microwave power.
The contract to buy is riddled with possibly ten to twenty potential epic screws to the buyer. If we don’t close on X date, you get to pay $160 per day until we do. Property is As-Is, hope your inspector checks the walls in the back bathroom! Seller can terminate at any time they like, buyer must consign $1,000 of his own money in good faith as well as several drops of blood to be used in retalitory black magic as a sympathetic link in the case of a breach. A good 20-30 pages of “Seller can do no wrong. If Buyer blinks out of order, we’ll sue him senseless.”
Then you get to figure out what to offer. What’s an insult, what’s not? How many times can one counter before going insane? Can you counter a counter that has been countered? If you do, seller has to agree again, even if they counter. If you counter, you are obligated to fulfill that counter. If seller counters, you accept, then seller has to accept. But if you counter and seller accepts, then you have already accepted and cannot counter your counter.
And then there’s the money. If you offered $160k, and surprisingly they accept, the agent and the mortgage rep will sit you down and go over a fun little check list of things you get to buy. First up, the downpayment. FHA fixed rate 5.7% 30/yr minimum downpayment is 3.5%, so your loan amount is actually 154k and you get to pay $5,600 cash. But there’s also PIM and MIP, which is $1,200. And tax docs which runs $400. Also millage which for you is 15.27% or $3600 per year non-homestead, paid in arrears. Let’s not forget that if you move in on the 15th, you’ve got 15 days to pay of interest at $20/day so that’s $300, plus a home inspector at $120, termite inspection at $80, FHA inspector who is seperate is $50, and there’s doc stamps on the dollar, which is 2.25% so that’s roughly $2,000. Oh, and a Loan Origination Fee, usually 1%, so $1544, and the Underwriting Fee at $495. Then there’s your Earnest Money Down at $1,000 and title insurance at $1150.
All told, it’s about $15,000 in taxes, junk fees, “why the hell not” charges. And the fun thing about it is how they are itemized to specifically prevent a thrifty buyer from shopping around. Think that 5.7% was a bit high? Check with Mr. Mortgage Broker down the road. He’ll give you 5.0% and a grin, with a giant sack of hidden last minute fees tucked behind his back.
It is eminently clear to me now why the real estate business in this country has gone so belly up. The general practices and procedures are organized in such an exclusionary way as to almost make a priesthood of the Agents and Lenders. Their own language, rife with acronyms like ARM and PIM, overflowing with words like ammortization and lis pendens. The entire system seems orchestrated to mercilessly screw the consumer in every way possible.
Friday, January 23rd, 2009
UO’s Aging Population
It is remarkably telling that at current, on one of the most populated shards in Ultima Online, a 1st Year Veteran reward is equivalent to an 8th Year Veteran reward in cost.
Meaning, the average account age falls roughly within a 5-6 year mark. So few new accounts exist that it makes selection of a 1st year veteran award prohibitive for marketability, reducing supply and increasing demand.