realtors already have a powerful political lobby, but they recently instituted a required member fee to pay for increased lobbying efforts. One more reason I will never join their organization.
When the 2011 dues billing cycle comes around a few months from now, members of the California Association of realtors® (CAr) will see a new assessment of $49 in addition to their regular dues. Labeled the "realtor® Action Assessment" (rAA), its purpose is to raise funds for CAr political activities. The assessment is not optional, although individuals will have a choice as to which way their $49 is to be directed. (1) It can go to CAr political action committees which provide funding support for candidates, or (2) it can go the general fund for political purposes such as "education and mobilizing members on issues of importance to the real estate industry and not to specific candidates."
Lobbyists are supposed to educate legislators about the impacts proposed legislation will have on a certain constituency so the legislator can make a sound decision based on facts... at least that is how it is supposed to work. In the real world, lobbyists most often "educate" candidates on how much money they donated to their campaigns during the last cycle and how much they will likely donate to their political opponents if they act contrary to their constituency's wishes. In short, lobbyists are extortionists.
The California Association of realtors like the National Association of realtors has a political action committee that employs lobbyists to educate politicians at every level of government. Usually, these activities are funded by optional donations to the PAC. Not anymore. Now the CAr is forcing members to pay a fee to fund their lobbying efforts.
Just about every California realtor® is aware of the fact that legislative activity constantly affects the real estate business. Moreover, most know that it is only because of CAr's involvement that the business hasn't been even more negatively affected than has been experienced.
That is not true. The realtor lobby supported the tax credits and other market props that have reduced sales rates by keeping price artificially inflated. This has greatly reduced realtor income and negatively impacted its members.
In the past year alone, CAr has influenced legislation on topics ranging from deficiency judgments to income tax withholding for independent contractors to point-of-sale retrofit requirements that would have drastically increased the cost of selling a home. The list goes on and on.
The Realtors®' legislative agenda is supported in three ways: through direct member involvement, by the lobbying efforts of CAr's legislative staff in Sacramento, and by the election of legislators who are disposed to have a favorable attitude to the business, tax, property rights, and land use issues that realtors® care about. All of these things cost money; and the election of legislators is what costs the most.
realtors pump much money into campaigns of politicians so that these politicians will owe them favorable legislation. If a politician were already favorably disposed to agree with the CAr, this arrangement would be symbiotic, but since most politicians are whores, the political donations are payoffs to buy votes on legislation.
This is not a partisan issue. At both the national and the (California) state level, realtor® PAC funds are pretty evenly distributed between the parties. Many people have the perception that realtor issues tend to be on the Republican side, but this is not so. In the current state legislative session, 6 CAr-sponsored bills are being carried by Democrats, 2 by Republicans.
It's comforting to know that both Democrats and Republicans are equally corrupt.
It is practically a self-evident truth that CAr needs to raise more political-purpose money than it has currently been able to generate through strictly volunteer programs. The economic toll taken by the market downturn has been evident in this area as well as the more familiar ones. In the past six years voluntary participation in political-purpose fundraising has dropped from 37% of the membership to 20%. The amount of funds raised in 2009 was down approximately 50% from 2006. Once among the top 10 PACs in the state of California, CAr is now ranked number 37.
If donations are down, isn't that a sign that the political action committee is failing? If they were doing good work wouldn't their members be making more money and wouldn't they also be willing to donate money to the cause?
When people donate to charities, they do so because they believe in the work of that charity. If the charity is not doing good work, then donors withhold their money. Isn't that the way it is supposed to work? What makes political action committees any different? Why does the CAr think they have the right to force their members to put money toward something they don't believe in and do not support?
The realtor® Action Assessment was adopted by CAr's Board of Directors at their June meetings in Sacramento. Details about it have been on the web site car.org, and electronic newsletter notification has been sent to the members. No one should be surprised when the dues billing statements go out at the turn of the year. Inevitably, though, some will be.
No just will many members be surprised, many won't pay it, and if push comes to shove, many will chose to leave the organization rather than be forced to donate money to a political action committee that arguably does a poor job at serving the needs of its members and the broader society.
Zero percent down equity stripper in action
The previous owner was a classic Ponzi who extracted whatever the banks were willing to give him. When you look at what this guy did, it is astonishing that lenders allowed and encouraged this.
This property was purchased for $350,000 on 1/28/2004. The owner used a $280,000 first mortgage, a $70,000 second mortgage, and a $0 down payment.
On 3/7/2005 he refinanced with a $292,000 first mortgage. It's possible he paid off the second at this point, but it was most likely subordinated.
On 1/17/2007 he refinanced with a $366,000 Option ARM first mortgage with a 2.3% teaser rate. He only extracted $16,000, but considering he put nothing down, it was all free money.
He quit paying in early 2009, but this servicer moved quickly, so he did not get much squatting time.
Foreclosure Record Recording Date: 11/09/2009 Document Type: Notice of Sale
Foreclosure Record Recording Date: 08/06/2009 Document Type: Notice of Default
The bank bought the property at auction on 12/7/2009, and they sat on it for almost 10 months before they sold it to our current flipper.
It pays to know the right people
The flipper (who is also the realtor) on this property bought it directly from Deutsche Bank National Trust Company. It was never advertised on the MLS. People with cash and the right connections can get deals like this -- assuming you think the the price he paid was good. I don't think he will get this asking price, but his margin is fat enough to lower it plenty and still make money. I wonder if this realtor's political connections helped him get this deal?
Home Purchase Price … $262,500 Home Purchase Date .... 8/29/2010
Net Gain (Loss) .......... $66,499 Percent Change .......... 25.3% Annual Appreciation … 400.0%
Cost of Ownership ------------------------------------------------- $349,999 .......... Asking Price $70,000 .......... 20% Down Conventional 4.34% ............... Mortgage Interest Rate $279,999 .......... 30-Year Mortgage $67,125 .......... Income Requirement
$1,392 .......... Monthly Mortgage Payment
$303 .......... Property Tax $0 .......... Special Taxes and Levies (Mello Roos) $29 .......... Homeowners Insurance $312 .......... Homeowners Association Fees ============================================ $2,037 .......... Monthly Cash Outlays
-$132 .......... Tax Savings (% of Interest and Property Tax) -$380 .......... Equity Hidden in Payment $110 .......... Lost Income to Down Payment (net of taxes) $44 .......... Maintenance and Replacement Reserves ============================================ $1,680 .......... Monthly Cost of Ownership
Cash Acquisition Demands ------------------------------------------------------------------------------ $3,500 .......... Furnishing and Move In @1% $3,500 .......... Closing Costs @1% $2,800 ............ Interest Points @1% of Loan $70,000 .......... Down Payment ============================================ $79,800 .......... Total Cash Costs $25,700 ............ Emergency Cash Reserves ============================================ $105,500 .......... Total Savings Needed
Property Details for 18 GATEWOOD Irvine, CA 92604 ------------------------------------------------------------------------------ Beds: 2 Baths: 1 full 1 part baths Home size: 1,110 sq ft ($315 / sq ft) Lot Size: 1,350 sq ft Year Built: 1977 Days on Market: 16 Listing Updated: 40422 MLS Number: S629915 Property Type: Condominium, Residential Community: Woodbridge Tract: Othr ------------------------------------------------------------------------------ Magnificant Irvine Woodbridge 2 Story Condo. This quietly located condominium features two large bedrooms, a highly upgraded kitchen with stainless steel appliances and contemporary interior finishes. This home is turnkey, distinquished and nice, nice, nice!Seller is Motivated so submitt your best offer!!!
Magnificant? distinquished? submitt?
I hope you have enjoyed this week, and thank you for reading the Irvine Housing Blog: astutely observing the Irvine home market and combating California Kool-Aid since 2006.
I hope you have enjoyed this week, and thank you for reading the Irvine Housing Blog: astutely observing the Irvine home market and combating California Kool-Aid since 2006.
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