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The Housing Trap


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2012 Sep 18, 8:53am   203,256 views  261 comments

by Patrick   ➕follow (59)   💰tip   ignore  

http://www.amazon.com/Housing-Trap-Buyers-Captured-Yourself/dp/1479156213/?tag=patricknet-20

It's $12.50 so that if you buy two (makes a great gift!) then you don't have to pay any shipping charges.

Here is the table of contents:

Trapped! 8

  Can't Sell 9

  Can't Pay Off Mortgage 10

  Must Keep Obeying Boss 10

The Conspirators 12

  Your Agent 12

  Your Mortgage Broker 18

  Your Bank 18

  Fannie And Freddie 19

  The Federal Reserve 20

  Newspapers 21

  The NAR 23

  Congress 24

  The President of The United States 25

  Current Owners 25

  Your Boss 26

  Your Parents 27

  Your Wife's Parents 27

  Your Wife 27

Fallacies and Fantasies 30

  Appreciation 30

  Building Equity 32

  Renters Throw Money Away 34

  Tax Deduction 37

  Real Estate Is Local 39

  So Little Supply 40

  So Many Buyers 40

  Foreigners 41

  House Prices Don't Fall To Zero 41

  Supply And Demand 42

  Land Shortage 44

  Fundamentals Don't Matter 44

  Commissions Don't Matter 45

  Agents Don't Care What You Pay 46

  My Neighborhood Is Different 46

  You Have To Live Somewhere 47

  Rentals Not Available 48

  Rentals All Suck 48

  Owners Can Remodel 49

  But The Newspapers Say... 50

  But The Appraiser Said... 51

  Home Sweet Home 52

  Status 53

  Affordability Is Good Now 53

  Owning Limits Your Monthly Payment 54

  People Buy On Emotion 55

  Baby Needs House 55

  I Just Want It 56

Scams and Dirty Tricks 58

  Realtors® Claiming They re "Free" 58

  Claiming That You Need An Agent 60

  Showing You The Ugly Dogs First 61

  Underpricing 62

  Missing Price 64

  Missing Address 64

  Renting Property Without Permission 65

  Straw Buyers 65

  Faking Comps 66

  Faking The Dimensions 67

  Faking The Sale 67

  Erasing Price History And Relisting 68

  Faking Higher Offers 69

  Hiding Your Low Offer 69

  Taking Bribe To Hide Your Offer 70

  Hiding Offer To Get Double Commission 70

  Hiding Offer To Get Seller To Take Loss 71

  Photoshop 71

  Advertising Agent Instead Of House 71

  Kickbacks 72

  Bribes 72

  A Trick Of Your Own 73

What Should You Do? 75

  Be Paranoid 75

  Never Sign Any Agent Agreement 75

  Never Reveal Your Price Limit 77

  Hire Your Own Independent Inspector 78

  Favor FSBOs 78

  Do Not Rush 80

  Do Not Overpay 81

  Deliver Offer To Seller Personally 83

  Pay Cash 84

  Long Term Lease 85

  Walk Away 85

  If You're A Realtor® 87

Calculating Fair Price 88

  Two Kinds Of Rent 89

  Borrowing Does Not Help 91

  Downpayment Doesn't Help Much 91

  Conventional Mortgage 92

  Deduction Doesn't Help Most People 93

  Appreciation Is Uncertain 95

  Taxability Of Gains 96

  What About Leverage? 97

  What About Inflation? 98

  Rules Of Thumb 99

  Anything else? 101

Long-Term Solutions 102

  Call Housing Inflation What It Is 102

  Help Correct Reporters 103

  No Public Guarantees For Private Debt 104

  No Mortgage Interest Deduction 105

  Public Bids On Housing 107

  Legally Binding Offers To Sell 108

  Eliminate Comps As Meaningless 108

  No Empty Houses 109

  Publicly Financed Elections 110

  End Proposition 13 In California 111

  The Georgist Land Value Tax 112

  Spread The Word 113


« First        Comments 59 - 98 of 261       Last »     Search these comments

59   MAGA   2012 Sep 14, 12:34pm  


You ever hear about Integrated Research and their Tandem monitoring product called Prognosis?

Invented by a distant relative named Steve Killelea in Australia.

I use Prognosis all the time. A great tool to montor the network.

60   simchaland   2012 Sep 14, 1:31pm  

Congratulations Patrick!

Geez, I need to try writing a book. You and Elliemae are .

61   Goran_K   2012 Sep 14, 3:21pm  

If Patrick gets sued by Realtors, or any housing shills, we should all donate for his defense fund, I know I will.

62   taketheplunge   2012 Sep 14, 3:38pm  

I ordered my copy today. I can't wait to read it.

63   Oxygen   2012 Sep 14, 4:16pm  

when is the 2nd edition coming out?

64   elliemae   2012 Sep 14, 5:19pm  

Seymour says

I bought elliemae's via kindle last week; only half way through it and already found a buyer for a hardcopy based on my recommendation

Thanks. My book has a specific audience, while Patrick's appeals to a larger audience. Let's make his a best seller. :)

ok and mine too...

65   alex.cash   2012 Sep 15, 3:42am  

Congratulations on this publication, Patrick. I hope it turns out to be a success on all fronts.

66   Patrick   2012 Sep 15, 3:54am  

Oxygen says

when is the 2nd edition coming out?

After I get the first wave of corrections and suggestions from the first edition! I plan to keep it well updated.

67   raindoctor   2012 Sep 15, 4:05am  


OK, I'll do the Kindle thing for $8. Might take a couple of days.

Should I also look into the iPad bookstore, whatever that's called?

yeah, itunes with ibooks. Ibooks take 30 percent cut from your sales. You can sell it there for $8.

68   Patrick   2012 Sep 16, 6:03am  

I was going through the motions of publishing on Kindle, when they presented me with the usual legalese horror to accept without objection, and I decided I'd better actually read it. This gem really stood out:

1 Exclusivity. When you include a Digital Book in KDP Select, you give us the exclusive right to sell and distribute your Digital Book in digital format while your book is in KDP Select. During this period of exclusivity, you cannot sell or distribute, or give anyone else the right to sell or distribute, your Digital Book (or a book that is substantially similar), in digital format in any territory where you have rights.

WTF? Why would I ever give them exclusivity and give up all alternative sales channels? This means I could not even sell my own digital book on my own site.

Then there were other questionable terms that made it sound like they could give the book away for free when they want, and how they could also change the terms at any time and I agree to whatever the hell they come up with.

Fortunately, it looks like it's possible for me to create a Kindle-formatted version on my own and not give up the rights to sell on other platforms. Not entirely sure of that though. The Kindle formatting software may have equally ridiculous terms.

Let me know if you have any advice about creating a Kindle file.

69   Patrick   2012 Sep 16, 6:09am  

Wow, Amazon's credibility is plummeting fast with me.

They have a line in the terms that says you can contact them with feedback:

1 Agreement Acceptance. You accept this Agreement and agree to be bound by its terms by either (a) clicking agree or accept where you're given the option to do so or (b) by using the Program, or any part of it. If you don't accept the terms, you are not entitled to use the Program. We welcome feedback on this Agreement at https://kdp.amazon.com/self-publishing/contact-us

But when you go to that URL to tell them just how much their exclusivity demand sucks, they won't let you do anything until you first accept all their terms -- the very same freakin contract that I'm telling them I do not agree to.

Time to short Amazon stock?

70   skinnyninja   2012 Sep 16, 6:16am  

Amazon is the neighborhood bully.

Apparently when you are the market leader you get to make all the rules. For most publishers, the cost of not being in the Kindle marketplace is too high...

71   Patrick   2012 Sep 16, 6:35am  

Kindle reads PDFs though, right?

I'm hoping I can publish on Kindle without giving up any rights.

72   raindoctor   2012 Sep 16, 9:24am  


Kindle reads PDFs though, right?

Not all kindles. Kindle fire does. Nook is better in this aspect: (a) you can read pdf and other formats; (b) you can use sd cards.

73   MAGA   2012 Sep 16, 10:45am  


Kindle reads PDFs though, right?

I'm hoping I can publish on Kindle without giving up any rights.

I wonder if Nook would be better regarding your rights.

74   elliemae   2012 Sep 16, 1:53pm  


Let me know if you have any advice about creating a Kindle file.

On your createspace page, choose the kindle version. but don't choose kindle select. you can kindle without it.

75   Bigjim   2012 Sep 17, 4:32am  

I don't know Patrick, if congress, the president, parents & even my wife are conspiring against me (Chapt. 2), I think I may have bigger problems than owning some real estate. Perhaps a little too much hyperbole?

76   Patrick   2012 Sep 17, 4:37am  

Not hyperbole at all!

Has Congress or the President ever suggested that promoting mortgage debt is a bad thing? I don't think so.

What do your parents think about your buying a house? Ask them.

Same for your wife.

In the large majority of cases, they all want you to buy and don't understand (or don't want to understand) the idea that you might be far better off financially by renting.

77   Shaman   2012 Sep 17, 4:57am  

Patrick says, "In the large majority of cases, they all want you to buy and don't understand (or don't want to understand) the idea that you might be far better off financially by renting."

This was almost exactly my experience of the last seven years. My parents and friends swore up and down that I was throwing away money on rent when I could be building equity by buying. I gave up explaining my position and the fact that the RE market was bubbled after a few years. Honestly tho, if my wife wasn't on board with my reasoning it would have been much harder to wait it out and rent. A few coworkers were pushed into big expensive home purchases by their wives and are now renters again, having been foreclosed. All this despite making six figure salaries.
Your book is very aptly named.
Thumbs up!

78   Wanderer   2012 Sep 17, 6:06am  


Same for your wife.

For the next version, you might want this chapter to be entitled 'Your Spouse.' Albeit, I haven't read the contents of the chapter but I would imagine similar arguments come from husbands. I've got a friend whose husband doesn't want kids yet because he wants to be a homeowner first! Personally speaking, I have a husband who has no interest in financial decisions but has always dreamed of being a 'homeowner'--both due to pride and wanting to customize his garage...

Plus, the label makes it sound like a wife is not an equal contributer in 1) the household income or 2) the financial decisions of the family.

79   Patrick   2012 Sep 17, 6:12am  

It's not politically correct to say so, and of course there are exceptions, but even today a house is generally seen as something provided by a husband for a wife -- and that's in just about every culture on earth.

The characters in "Suzanne Researched This" are playing on these traditional roles because that's what's in people's brains:

http://www.youtube.com/embed/hPIxrzmatq0

80   freak80   2012 Sep 17, 6:13am  


It's not politically correct to say so, and of course there are exceptions, but even today a house is generally seen as something provided by a husband for a wife -- and that's in just about every culture on earth.

True that. But she still gets half your stuff if she divorces you.

81   uomo_senza_nome   2012 Sep 17, 6:31am  

Just ordered a book Patrick. :)

cheers.

82   happycamper   2012 Sep 17, 6:45am  

Ordered your book over the weekend...I have learned many a lesson over the past few years reading here...looking forward to the book. Thx.

83   Wanderer   2012 Sep 17, 6:49am  

Well, that title does make it sound like you aim to provide your male readers with ammo against their wife's irrational demands to spend their husbands money on a big house. I just think there are more exceptions to that notion than you believe (like as in it's not true in real life anymore) but this book really isn't about that.

freak80 says

True that. But she still gets half your stuff if she divorces you.

Aren't both entitled to half of everything they acquired during their marriage? So if they contributed equally (or the wife contributed more), the husband wouldn't be 'losing' anything.

84   Patrick   2012 Sep 17, 7:01am  

jessica says

Well, that title does make it sound like you aim to provide your male readers with ammo against their wife's irrational demands to spend their husbands money on a big house. I just think there are more exceptions to that notion than you believe (like as in it's not true in real life anymore) but this book really isn't about that.

I think it still is somewhat more than half true. About 2/3 of men earn more their wives in the US.

And I think if you flip it around, you'd probably find that about 2/3 of women are the ones driving the purchase of a house. But I'm just guessing there, from my experience living in this culture.

And yes, the book is all about ammo. That what it is, really: a self-defense course for people being pressured to buy. The wife thing is just one part of it.

85   jgebis   2012 Sep 17, 7:04am  

Make a DRM-free ebook (pdf, Kindle formatted, whatever) for the same price as the physical book and I'll buy one immediately.

86   uomo_senza_nome   2012 Sep 17, 7:19am  

Patrick,

Do you think there'll be momentum for more items for sale (similar to xkcd)?

http://store.xkcd.com/

you already have a book, may be you can add more merchandise.

just a thought.

87   Wanderer   2012 Sep 17, 7:51am  


I think it still is somewhat more than half true. About 2/3 of men earn more their wives in the US.

How many of that 2/3 are the sole wage earner? Women making 85% of their husband's wage probably don't like to throw their money down the crapper either...


And I think if you flip it around, you'd probably find that about 2/3 of women are the ones driving the purchase of a house. But I'm just guessing there, from my experience living in this culture.

Maybe but I just gave you two examples of where a wife had to provide the arguments against buying. So in my demographic, this doesn't seem all that true to me. Does that matter? Only if you might offend someone in your intended audience.


And yes, the book is all about ammo. That what it is, really: a self-defense course for people being pressured to buy. The wife thing is just one part of it.

Agreed, I just wouldn't want your other ammo to be ignored by some people in your potential audience because of a possible interpretation of a (as you say) somewhat politically incorrect statement....

88   Patrick   2012 Sep 17, 7:55am  

I'd be delighted if there were.

I have bumper stickers, but maybe should branch out into posters and clothing.

I think it would be funny to create OVERPRICED stickers for people to put on for-sale signs, but I'd probably get in trouble for that...

89   Patrick   2012 Sep 17, 8:18am  

jessica says

Agreed, I just wouldn't want your other ammo to be ignored by some people in your potential audience because of a possible interpretation of a (as you say) somewhat politically incorrect statement....

I had my own wife review the book, and our marriage survived.

I don't want to offend women, but I honestly believe a lot of mortgage debt is created by realtors pressuring wives to pressure husbands. Just like in that video.

How can I put it without lying about what I really think?

90   happycamper   2012 Sep 17, 9:03am  

From the female perspective--We were in the process of relocating out of state and I was the one that found this site and presented it's arguments for renting vs. buying. However, we both struggled with the "emotional" arguments for home..or rather...mortgage ownership...and caved and bought after a year. Honestly, the emotional card to buy is the most difficult to overcome, because we had all the head knowledge not to. Fortunately, for us, we were able to take advantage of this crazy AZ market...and were able to sell, and get all our $$ back. Didn't make any, but didn't loose any. I certainly would not recommend the path we took, but we learned some valuable life lessons in the process. Happy to be renting again...

91   MAGA   2012 Sep 17, 9:19am  


It's not politically correct to say so, and of course there are exceptions, but even today a house is generally seen as something provided by a husband for a wife -- and that's in just about every culture on earth.
The characters in "Suzanne Researched This" are playing on these traditional roles because that's what's in people's brains:

Shutup woman, I just came into the kitchen for a beer at half-time.

92   Patrick   2012 Sep 17, 9:29am  

A little more background on men and women in buying houses:

http://www.nytimes.com/2010/01/07/garden/07men.html?pagewanted=all

Married couples make up the largest group of new home buyers. Next, according to research from the National Association of Realtors, are single women, who in the last 12 months represented 21 percent of home buyers; single men were just 10 percent. That gap has opened up in the last decade, said Paul Bishop, vice president for research at the association.

Those women want that house. The men, not so much. By a factor of more than 2 to 1.

93   elliemae   2012 Sep 17, 12:06pm  

http://www.youtube.com/embed/nVGxJAd0iYs

Men are supposed to be the providers - the hunter/gatherers. If you don't buy your wife a house you're a useless piece of shit who wasn't good enough to marry her in the first place - if only the good one hadn't gotten away....

Women are emotional when it comes to home buying. And men have no ammunition against emotion.

94   skinnyninja   2012 Sep 17, 12:28pm  

Any closer to a digital edition yet?

95   Patrick   2012 Sep 17, 12:30pm  

I still don't see how to publish on Kindle without giving up rights to publish anywhere else.

I'm tempted just to give away a PDF that has maybe 25% of the book in it, and let people copy that however they want as advertising for the paper book.

I love paper books.

96   elliemae   2012 Sep 17, 12:31pm  

Call it Crazy says

It's not JUST home buying... they are emotional with every other issue of life!!

Oh, so you think I'm an emotional mess? sniff.... you hurt my feelings! I can't do anything right! I never should have answered that post!

Other people answered my posts without making me cry... don't know why you chose to pick on me! I'm calling all my girlfriends and telling them that you said I wasn't good enough! (heavy sob)...

97   MAGA   2012 Sep 17, 1:38pm  


I still don't see how to publish on Kindle without giving up rights to publish anywhere else.

I'm tempted just to give away a PDF that has maybe 25% of the book in it, and let people copy that however they want as advertising for the paper book.

I love paper books.

Just a thought, but would it be bad to only sell on Amazon? I don't like their rights restrictions, but then at the same time it's just for this one book.

98   Patrick   2012 Sep 17, 1:53pm  

Any restriction on where I can sell my own work is not acceptable.

I'm actually kind of amazed anyone puts up with it.

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