Realtor's Six Percent

Well, the wireless connection didn't last but I still have access to the Internet via the family computer. 60 Minutes did a segment questioning whether the six percent commission for Realtors is still needed. Hey, I'm all for paying Realtors if they put an equal amount of time and effort to earn their thousands of dollars worth of commission.

For realtors, the six percent commission is sacrosanct. It's remained in place, even as the price of homes has quadrupled over the past 25 years.

But as correspondent Lesley Stahl reports, things are beginning to change. What happened to travel agents, stock brokers and book sellers – the encroachment of the Internet – is beginning to affect real estate agents. And the sacred six percent is under assault from online discounters.

Dream House Sold?

Making the most of my iffy wireless connection, I offer one more post for the day to make up for recent inactivity. (If it keeps up, I'll be much more active blogging from the comfort of my humble abode)

A house that I've been monitoring on MLS went into a pending sale recently. I'm sad because this well could have been my dream house! It was the right price, was in a good location, had 2 bed, 2bath, big yard, 1,300 sq feet and looked very well-kept. Now I'm lamenting that I wasn't ready to buy yet. Sometimes I think lurking on MLS is bad because it feeds my house lust. My motto in my head of "Wait, waaaiittt" is drowned out by the impulse to buy now. Good thing that a financial barrier of actually having very little money keeps my big eyes in check.

My NetWorth IQ

I stumbled upon this site for tracking one's net worth at My Networth IQ.

The idea behind it is that its a personal finance social network hybrid. People can not only track their net worth but also share the information with their friends/strangers on the Internet. I'm not sure how prudent that is (again, the paranoia) but it's an interesting idea. I've signed up for an account but am keeping the information from the public for now.

You can peek at my net worth . According to CNN Money, there is a disparity between what my net worth should be according to my age and income bracket. Average adults under 30 have a net worth under $5,000. I'm way ahead there. However, for my income bracket, I should have much more net worth in the 100K range. Looks like I have a lot to go.

Bailout for Borrowers

New York Senator Chuck Schumer is urging Congress to spend $300 million of taxpayer money on counseling and outreach for homeowners facing foreclosure. That doesn't sit right with me as this action circumvents the notion of personal responsibility. Nobody forced these borrowers or lenders to engage in activities leading to this market crash. New Century just announced the termination of 2,000 employees. There has to be consequences in order to exact change. Carol Lloyd of the San Francisco chronicle sums it up succinctly in a recent column on the notion of a short sale where debt forgiveness is a "win-win" situation.

It's a weird facet of American society, which better rewards those who try to live the American dream and fail miserably than those who live within their means. In the end, those left carrying a fat debt, bad credit scores and lingering regrets are as much a mirror of our system as all the happy homeowners who make their mortgage payments month after month.

Monkey Reaching for Branches

A free Wall Street Journal column called "Why What You Have is Never Enough" examines the transient nature of happiness and why Americans are complelled to get a bigger house, a better job and still are unsatisfied. It reminds me of an ex who disapproved of me applying for a better paying job within 6 months of landing a new job. He described me as a monkey constantly reaching for another branch even before settling the one I just landed in. True, some of the insights in the article resonates but that is not going to stop me from realizing my ambition of home ownership. I'm not there yet so I HAVE to be the monkey continuing to swing from branch to branch.

We may have life and liberty. But the pursuit of happiness isn't going so well. As a country, we are richer than ever. Yet surveys show that Americans are no happier than they were 30 years ago. The key problem: We aren't very good at figuring out what will make us happy. We constantly hanker after fancier cars and fatter paychecks -- and, initially, such things boost our happiness. But the glow of satisfaction quickly fades and soon we're yearning for something else.

This Interactive House Value map shows whether house values are overvalued based on historical data. Statistically normal house values are determined with consideration to house prices, interest rates, household incomes, population densities, and historical premiums or discounts paid to live in certain areas over time.

In Debt We Trust

Last night I watched most of a documentary newly released on DVD called "In Debt We Trust" which examines the credit card industry and the consumerist culture it encourages, leading to crushing debt for millions of Americans. While interesting, I found the documentary heavy-handed and a bit overbearing. Felt more like a 20/20 episode rather than a documentary. It places the blame of consumer debt squarely on the shoulders of the credit card industry but rarely mentions consumer responsiblity to stop spending. Also, the film draws a comparison between buying a house/real estate and modern day serfdom because the mortgage turns us into slaves to credit for 30 years. Ouch!

With things not going so well for them lately on other fronts, Republican politicos have taken to emphasizing a hale U.S. economy -- though that is something few Americans feel in their own pocketbooks. Some reasons for those clashing perceptions are explored in vet documentarian Danny Schechter's "In Debt We Trust," which portrays a nation hobbled and preyed upon by credit card companies and other lenders. When this borrowed-money bubble bursts, he suggests, another Great Depression could arrive.

I'm a Plankton!

I love this LA Land blog post that likens first time homebuyers to plankton--seemingly small and insignificant but essential to the health of the whole real estate ecoystem. Price the plankton out of the market and everyone suffers.

Plankton, of course, are almost microscopic organisms that serve as food for higher life forms. Without plankton almost every fish and mammal in the sea could not survive, since most species depend upon other fish for their existence and plankton are the initial building blocks of the entire process. In the case of real estate, the plankton would be the first-time buyer (perhaps a young married couple) with a desire to own their own home but with very little capital to carry it off. When the time comes that they can’t pull it off – either through an inability to come up with a down payment, or to service the monthly mortgage – then the ‘plankton’ would disappear and the rapid escalation in housing prices would ease as well.