All Forum Posts by: Bruce Norris

This is a true story that happened to me in my first year of the house buying business. A man called on an ad and said he wanted to sell his house. When I met him, I sensed he was very sad. In a normal negotiation, the seller puts up a fight on price, ecscrow length or something!. Not this guy; everything I said was ok. It was so out of the ordinary I was a bit stunned. Out of the blue I said, "I don't want to talk about your house anymore...are you ok? When he said no, I asked permission to go to my car. I came back with a book, The Greatest Miricle In the World. I told the man I wouldn't speak to him until the next day. I told him to read a particular chapter in the book that I thought would be helpful.

When I knocked on his door the next day the first words out of his mouth were, "The book you gave me saved my life. My intention was to sell you my house and kill myself."

I've had thousands of conversations with sellers over the years. Because of that experience, I never look accross the table and see a pile of equity; I see a person who may in fact be taking this a lot harder than they should. You want to enjoy the house buying business...treat others exactly how you would want to be treated. By the way, I bought the man's house because he decided he wanted to live, but just not there anymore.

When you read the book, you will understand why I am a lifetime "rag picker"

yep

http://gma.yahoo.com/nypd-officers-act-kindness-goes-viral-162926285--abc-news-topstories.html

Hi David,

Last thing I'll comment about the subject and thanks for the kind words.

If you get a chance watch the video from the club meeting. What people say about a bottom of the market being found with improved employment etc. is normally correct but incorrect this time for all of the reasons mentined in that talk.

When you have one month of inventory and 6 months of buyers, you have a price war no matter what the employment is doing. When you have a 3.25% interest rate and one months worth of inventory, buyers correctly figure out they better buy before prices or interest rates go up. And by the way the price monthly for a $50,000 price increase has never been smaller on a monthly basis.

When you have one months of inventory and you forclosed on 12 months worth of former owners three years ago, many of those former owners want back in. So, you can tack on this unprecidented pile of former owners on top of normal demand, on top of investor demand, on top of Wall Street demand.

I believe this boom is being reverse engineered; prices up by way of nothing for sale. All of the policies are taking inventory to the sidelines; bulk sales with ownership retention of Fannie, bulk note sales from FHA with restrictions on when and if you can foreclose, etc. Please tell me how you go from one month of inventory to 6 months? I don't think that level of inventory happens next year in many Southern CAlifornia areas.

Prices rise to the point of construction making sense, construction improving paves the way for manufacturing and financing jobs to return etc. Fix the job market and you attract migration. Attract migration and your tax base goes up and your negative budget closes the gap.

By the way, I'm not trying to convince a soul to believe what I'm saying. I just study the market to wisely spend my own money. We have a following in California that wants to know what we think. I just thought I would put it on bigger pockets as well.

Best of luck,

Bruce

Aaron is correct. However, when we get more for the property it's never an FHA buyer. Yes, we still see all cash occupant owners. Had one this week i heard.

It's always hard to be accurate when you take one sentence out of a two hour presentation. Just as an overview, We buy and sell houses in Southern California; about 150 a year. We usually have 50 at any one time. Usually the 50 are split evenly with 1/3 being under repair, 1/3 being available, 1/3 in a sale escrow.

Gradually since the spring of this year, the middle catagory has shrunk. The middle catagory, properties available, is quickly going pending and joining the pending group. We either have propertes just bought or they are in escrow.

Then, we began to see so many offers that the winning bidder was considerably over what an appraisal could come in at. So, we added a clause to some of our listing saying the appraisal would no longer determine sale price. Nothing changed other than we sometimes made 100% more on a property.

What normally pushes prices coming off of a down market is construction, which creates jobs in other catagories, which attracts migration, which creates demand and the circle continues to reinforce itself.

This time, we do not have any of those factors in place and yet we have major price movement...why? That's what the presentation covers. It far to general of a statement to say it's 2004 in your area. I know my area and what I meant by that is we will experience the price movement in my area that will mimic 2004 in 2013. '

If you can watch the presentation, it will give you a pretty good idea of how that conclusion was drawn. Also for reference, we wrote a report called The California Comeback in 1997, Why Prices Will Double in the Next eight Years and in 2006 wrote The California Crash, predicting in advance the price declines and foreclosure glut.