Want the RE market to stabilize? Get some TRANSPARENCY in the market.

Plus the buyer should have gotten something for the headache

I meant "seller" but i guess it was a freudian slip.

Excellent point apt23. There'e so much about this business that is so blatantly secretive that it makes buyers suspicious, especially in a buyers market.

My strategy as a buyer is just to assume that everything brokers tell me is a lie. Unfortunately, the sellers are paying for the brokers' sleazy reputation because when I am ready to offer it will probably factor in that fact & I'll assume if I listen to the broker I'll overpay.

excellent points!
How true, how true. Greater transparency would level the playing field considerably. why would you not want that data in a critical decision making process. I wonder if you can ask for some of that data b4 making a bid. I suspect that once the other party stoped laughing you would recieve no data. Makes you want to game the system in your own favor, some how.

so you think you should see the seller's tax records? Ok then, how about you show me your tax records?

ultimatly, I will have to produce tax records. 1. to secure a loan. 2. coops want to see personal income tax records and sometimes biz records.
I will be droping my pants for full disclosure, so that seems fair.

I personally think that the lack of transparency is a GOOD thing. I'm probably one of the 1% of the population who dislikes transparency. As a seller, I don't want you snooping around my personal info.

It is not just for the individual home buyer. The economy tanked primarily because mortgages were bundled and swapped in tranches that no one could understand. The wall streeters were able to pile on the leverage precisely because no one could ascertain the value. A thousand minions couldn't unravel those tranches to determine the real value (and the ownership). And when you go to buy an apt in one of the largest cities in the world, you understand why. The methods of determining market value are skewed by powerful -- and sometimes ignorant-- vested parties. I think there should be a law that no mortgage should be exchanged or swapped unless it can be determined that the purchase was made under a system of full price disclosure.

There need to be more laws for developers. LIke, they can't undercut their own established prices for at least three years -- maybe that would encourage them to set prices that truly reflect market value instead of prices that reflect their own overblown PR. The Harrison is selling the remainder of the apts for 20% off. How would you like to be a buyer there where the value of your major investment has been undercut by 20% before you even move in - by the corporation that sold it to you. Where are the lemon laws? Rushmore buyers you are going to really wish there were more laws.

And falcogold, i am gaming the system in my own favor -- I am going to rent until sanity returns to the market.

I don't need tax records. But if a seller put money into appliances and mechanicals then a notarized statement saying so would help establish value --a value that would be basic in the clearing house method. It doesn't mean that if the seller got discounts for marble and appliances from his brother -in-law that he couldn't declare actual value and add that into the price. But if someone is representing that they did a gut renovation on an apartment- wires, plumbing etc and then you find out they only spent $50,000, then you can be assured that your bathroom vents in fact vent to nowhere and cheap materials that will need to be replaced were used -- that affects value.

My point is that those costs are subsidized by tax payers because they are counted as capital improvements and can be deducted. Therefore they should be publicly available somehow. A notarized statement would do. That way, if he claims 500,000 in improvements and when the pipes burst in the walls you find out he couldn't have spent more than a thousand, there is accountability.

I agree with your main point, apt23, I tend to agree with (only) the thrust of a second point, and disagree about a third point. "Transparency" in general is a good thing, with much of The Real Estate Industrial Complex invested in profiting from a lack of transparency. (I got in a bit of hot water on my blog for being blamed by Seller A for pointing out that Neighbor B had closed recently for a much lower price for an essentially identical unit, so I have been bruised a bit even as an agent.)

I agree that the cost of renovations can be material, but is better left to the rough-and-tumble of negotiations than as mandated disclosure. When I represented an apartment priced *way* above a recent nearby comp we were very explicit about what buyers were asked to pay for ["An exquisite renovation that is priced accordingly. Your only question may be 'does it match my taste?'"; http://www.streeteasy.com/nyc/sale/65353-condo-245-east-93rd-street-yorkville-new-york] so I had before-and-after photos and bills for materials and workmanship available for inspection. If I had not been able to 'prove' the cost we would have had more difficulty selling -- so it was in my seller's interest. I would expect any rational seller would be prepared to do the same, but I am hesitant to *require* sellers to prove this kind of thing.

Buyers have another method to accomplish what you seem to want. If it is important to a buyer to have a seller affirm that wiring has been updated, vents reach outside, appliances are new ... whatever, the buyer can ask for a contract representation to that effect (retaining the right to sue for breach). If seller is unwilling to make that representation, buyer can walk and seller may be left with an unmarketable apartment. I guess I am heading to a case-by-case view, in which a buyer *can* protect themselves before signing a contract about what is important to him/her or walk away.

I disagree completely with your view that contract prices should be available before closing. That number is the product of a specific negotiating dynamic and may or may not be available to a different buyer. And if the deal does not close (buyer can't get financing and can walk; board turn down ...) that seller should be free to negotiate a new deal with a new buyer unpolluted by any prior concessions. (My opinion, but still.) If you are worried that someone else in the building will strike a 'better' deal with a different seller, tough. That is a different deal between different parties who have different interests. (In a Rushmore-type situation, you can ask for a contract rep that gives you later-discount protection if that is important to you, but you are not very likely to get one.)

In sum, closed sale info should be readily and quickly available, with tools to permit true "comparability" analysis (e.g., renovations); if the quality of renovations are at issue, a buyer has the ability to negotiate representations on material points and can walk away if seller refuses; and a "contract price" is (to me) sufficiently unlike a "market price" (until it closes) as to be protected until then (though it may be known [or 'indicated'], informally at least, depending on the building grapevine).

Another innovation in re, lack of coherent and understandable data. Great going guys!

The economy tanked primarily because mortgages were bundled and swapped in tranches that no one could understand

Actually the information(or lack of information) was very clear. This was stupidity.

greed.

Good point A.R. The stupid thing is usually turned on by one of two things. And it's usually Greed.

meant to say stupid gene is activated by..

SMat: I will give you that perhaps an accepted offer shouldn't be disclosed. But once an offer goes to contract it means a seller and a viable buyer established a market price and it should be public. Because at least the broker has the info and if the contract doesn't go thru, that broker is then operating with inside information. The broker could easily steer a wealthy buyer (who might be good for contacts) to an acceptable price at the expense of another.

Years ago cab drivers used to take foreigners from Kennedy to Manhattan and charge them $200. I remember that some people thought this practice was acceptable, even shrewd entrepreneurship on the part of the cabbie. Yet the practice was stopped because fleecing tourists was bad for the NYC economy -- it was bad for everyone. Keeping contracts secret in the hopes that you might be able to fleece an ill informed foreigner or some rube that had the misfortune to get a broker who shows apartments between acting jobs in not good for the economy. Bubbles can only be prevented if buyers can get good information to inform themselves and not allow anomalous purchases by russian oligarchs who were misled by tight skirted brokers to skew price structures.

"But if a seller put money into appliances and mechanicals then a notarized statement saying so would help establish value --a value that would be basic in the clearing house method. It doesn't mean that if the seller got discounts for marble and appliances from his brother -in-law that he couldn't declare actual value and add that into the price. But if someone is representing that they did a gut renovation on an apartment- wires, plumbing etc and then you find out they only spent $50,000, then you can be assured that your bathroom vents in fact vent to nowhere and cheap materials that will need to be replaced were used -- that affects value."

Um, can't you simply verify the money they spent just by looking? If the seller has laminate counter tops and cheap white appliances, but says they spent $60,000, then you know right there they are lying.

I've been a seller twice and never before haas a buyer asked me how much I spent on renovations. Do buyers really ask such a thing? And how many sellers even know how much they have spent, especially if they did a lot of work over an extended period of time. If I did a kitchen in 1999, a btrhroom in 2002, and the other bathroom in 2005, do you really think I know what I spent?

don't have any sympathy for the foreigners apt23. If you go abroad, they will screw you just as fast as they are screwed here. Nearly every country on the face of the earth screws foreigners. When my grandparents went to France several years ago during that huge heatwave they had, they got charged $25 for a bottle of soda.

Prez; "Um, can't you simply verify the money they spent just by looking."

Gut renovation usually implies beneath walls and yes, I eventually opened up my bathroom walls to find the vents vented to nowhere.

Prez: "And how many sellers even know how much they have spent,

You should be keeping track because every time you renovate, the things that stay in the apt - floors, appliances, pipes, etc.. they are considered capital improvements and are deductible from the sale price before you tabulate capital gains. Sounds like you need transparency more than anyone.

Prez: don't have any sympathy for the foreigners apt23. If you go abroad, they will screw you just as fast as they are screwed here.

Yes, yes, I've been screwed by every Roman taxi I have ever taken. And, so I never take them anymore when I am in Rome - I hire a private car which turns out to be cheaper than being screwed. The point, Prez, is that if you continue to screw the foreigners -- or the locals for that matter-- they will stop buying real estate in our fair city. And then who is going to prop up our real estate market for us? Every time a high powered broker screws a foreign buyer, it affects the value of your apt. Funny thing. You screw them once and they don't allow themselves to be screwed again. And, they tell their friends, it gets in their local press. They stop buying. That's why the city put the kibosh on the cabbies. NYC was getting a bad reputation and it was affecting tourism. It was affecting restaurants, hotels everything. Bet your grandparents aren't too keen to return to France. That kind of incident leaves a bad effect. You make my point.

I am not going to touch your cab drivers, apt23, but which broker are you talking about ("[t]he broker could easily steer a wealthy buyer (who might be good for contacts) to an acceptable price at the expense of another")? If the seller's agent, that agent owes a duty to the seller to get the right price; if the buyer's agent, yes there is an advantage to knowing what the seller would take, but that accrues to a new buyer and is against the seller's interest. Hard to see what is "public interest" in that.

And a "contract price" for a "deal" that does not close is not a market price *until* it closes. If the contract fails, that was just another negotiation that did not result in a transaction. I am not sure there are many contracts that fail other than (a) because the buyer was deemed unqualified (by the board that turns them down, or the bank that refuses to lend) or (b) because the buyer is unwilling. Is the "contract price" for a new development the "market price" if a buyer walks away from a 10% deposit because by the time the closing comes around the buyer believes that the market price is way below the contract price?? (The fact that that sentence is so convoluted is -- in this case -- logical, not poor writing.)