Trend of single family home prices dropping hard in "non-hot markets"

One can also be sued for interference with an existing contractual relationship. For this type of lawsuit to be successful you must prove the existing valid contract, knowledge, intentional acts to interfere with the contract, actual interference and damages.

Remedies for breach of contracts include damages, specific performance of the contract despite its breach or rescission of the contract. Real estate contracts often provide for liquidated damages, i.e. a specific amount of damages to be paid, in the event of a breach.


I'm not a Lawyer-maybe it's another law. But here is the rub-all things being equal you don't have the right to sell your house to WHO YOU WANT TO. There are laws to prevent discrimination. And they are Federal Laws.
Yeah, you really never posted anything that said you had to sell it. I think discrimination is typically a 10k fine so I guess you might feel that you're forced to sell it if you want to avoid a 10k fine. But I don't think you're actually forced to. I think it all depends on what you say. If you say I don't want to sell it to you because you are part of this protected class and I don't like this protected class, then that's discrimination. If you just say you're busy or still thinking about it or make some crazy demands and just let it expire, then they can't really prove any kind of discrimination. The key is that for specific performance, you're forced to perform to the contract. If there's no signed contract, you're not being sued for specific performance maybe some other law which you haven't mentioned yet. For instance some people might want to sell their home to a family instead of a developer/business who might tear it down. In that case, the business isn't a protected class and the owner could just hold out for a family and not accept an offer from a business even though it's at the asking price.
 
Realtors don’t access your credit info alone, you have to give it to them or give them permission some way. The protected class is everyone. There aren’t separate classes. There is no contract until both parties sign and no performance to sell unless there is a contract signed. Real estate contracts have to be in writing.
 
Realtors don’t access your credit info alone, you have to give it to them or give them permission some way. The protected class is everyone. There aren’t separate classes. There is no contract until both parties sign and no performance to sell unless there is a contract signed. Real estate contracts have to be in writing.
Discrimination is against a protected class. You can discriminate against a non protected class like people with low credit scores vs higher ones. Or clean vs messy people. For Massachusetts, protected classes are: race, religion, national origin, gender, disability, familial status, marital status, sexual orientation, receipt of public assistance (including Section 8), genetic information, and military status. So if you say you won't sell because of one of those reasons or they can prove it, then that's discrimination. If you find them smelly, that's not a protected class, not on the list.
 
Discrimination is against a protected class. You can discriminate against a non protected class like people with low credit scores vs higher ones. Or clean vs messy people. For Massachusetts, protected classes are: race, religion, national origin, gender, disability, familial status, marital status, sexual orientation, receipt of public assistance (including Section 8), genetic information, and military status. So if you say you won't sell because of one of those reasons or they can prove it, then that's discrimination. If you find them smelly, that's not a protected class, not on the list.
Those are laws protecting everyone, not classes, like your list shows. Old people are not a class of people, tall people, etc. Messy people are not a class of people. Classes is a loaded devisive word. Everyone is protected from something. You can have all those reasons you list not to sell in your mind, and just let the respond by date in every sales contract expire. Sometimes it is just hours. Nope I need more time to decide, I need five years to think it over, maybe next week I will change my mind, then contract is over at the time end. The broker yells and walks, and you’re done. Or require any number of payment methods etc. Move in date. Nope not work for me. I need two years to clean this up. You can have a listing contract with the broker too, saying you will accept full price, which is not between the buyer and seller. They won’t enforce it, and there are a million ways you can say no to the buyer. As long as you don’t verbalize or write discriminating words, no one can prove what you are doing.
Renting property, giving loans, etc is where discrimination is actively prosecuted I think. You have to rent to a family even if you don’t want to. The family class? The kids are a class? But then the nice older single non destructive woman class has a better credit score, and there is your excuse. As long as you keep your mouth shut about kids in your rental, it is hard to enforce.
Actually the seller can pull the listing any time they want for any reason or no reason. Buyer has no power at all.
 
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You can be the only bidder and offer a hundred times the asking price and the seller doesn’t have to do anything. Not legally obligated in any way.
I never look at a house as money but a place to live or a place to rent to someone else to live. They can keep all the emphasis on money in this new age. It’s all people seem to think about and the more they have the more they think about it.
You don't have to give a reason. They can sue you for whatever reason. You're not legally obligated to sell anything. You can always take your time thinking things over til the offer expires. You can always throw in additional terms/demands.

Your understandings are, at best, partly correct but mostly not factoring costly risks. While it depends on the region/state, the listing contract generally includes provisions that if a qualified full price offer is declined, the seller still pays all realtor fees on the unsold house. I recently sold two houses in two states and this language was in the contracts. So, the seller could underprice his $2 million house to $1.2 million hoping to get a lot of traffic and a bidding war. But let's suppose he gets 1 full priced offer for $1.2 million and declines it. Well, he's then got to pay approx. 7% to realtors for their efforts, which is almost $84,000.

Now assume that offer came from a Fair Housing Act protected status person(s), who know the house is worth over $2 mil and now want it for $1.2 mil. You can bet there will be a lawsuit filed, and the US Justice dept might bring an action, and sellers might find themselves in state and federal courts being sued; which will force the sellers to defend it and it will tie the house up in a lawsuit for a year. A settlement will probably be reached to un-encumber the house, so the sellers will likely cough up another $100k. Sure, the sellers might prevail but spend $20,000 and a year in courts to un-encumber their house.

IMO you'd be a fool to play this game. List your house near or at the market value or the value you actually want. This game of listing it low and hoping for a bidding war is foolish.
 
Depends on the Realtor.
No, in the case I responded to, CKN said realtors made a decision based on credit ratings so unless the contract between the realtor and buyer stipulated that they can pull a credit report, I was asking how they get the numbers. My parents are private landlords and can pull people's credit (or maybe they do it through a "landlord club" they're in).
 
I cannot wait to see home prices drop, at least in Utah. I also cannot wait to see the massive crude oil correction i think we are heading towards.
 
No, in the case I responded to, CKN said realtors made a decision based on credit ratings so unless the contract between the realtor and buyer stipulated that they can pull a credit report, I was asking how they get the numbers. My parents are private landlords and can pull people's credit (or maybe they do it through a "landlord club" they're in).
It is a bit of a stretch to ask for and to get that. Normally when you get a preapproval, the bank will tell you what the credit score is so maybe the buyers forwarded a copy of the credit report they got. But regardless of the mechanics, it's a strange thing to ask. Never really asked for a credit score. Usually in a bidding war, it's the highest and best that wins.
 
Your understandings are, at best, partly correct but mostly not factoring costly risks. While it depends on the region/state, the listing contract generally includes provisions that if a qualified full price offer is declined, the seller still pays all realtor fees on the unsold house. I recently sold two houses in two states and this language was in the contracts. So, the seller could underprice his $2 million house to $1.2 million hoping to get a lot of traffic and a bidding war. But let's suppose he gets 1 full priced offer for $1.2 million and declines it. Well, he's then got to pay approx. 7% to realtors for their efforts, which is almost $84,000.

Now assume that offer came from a Fair Housing Act protected status person(s), who know the house is worth over $2 mil and now want it for $1.2 mil. You can bet there will be a lawsuit filed, and the US Justice dept might bring an action, and sellers might find themselves in state and federal courts being sued; which will force the sellers to defend it and it will tie the house up in a lawsuit for a year. A settlement will probably be reached to un-encumber the house, so the sellers will likely cough up another $100k. Sure, the sellers might prevail but spend $20,000 and a year in courts to un-encumber their house.

IMO you'd be a fool to play this game. List your house near or at the market value or the value you actually want. This game of listing it low and hoping for a bidding war is foolish.
I'm a Realtor and these scenarios are not that common with those types of prices. And in reality I've had several cases where the seller backed out even with a signed contract. Last one the seller escaped with just having to pay the home inspection cost. Other times the realtor got nothing with just the promise that they would get to relist later or the seller paid off the broker, but not always with the full contract price. I think the justification for that was that there was less work involved, no closing to go through or home inspection, smoke detector, hand holding etc.

And again you're conflating the two things. You can claim discrimination, but the fine for discrimination is 10k. There was one case where the covenants of a property said that they couldn't sell to African Americans but the laws made that statement void. But the owner told that to a potential buyer. They did sue and won, but I think the seller just had to attend some classes and pay a minor penalty. The buyer wanted to get the house for free. Didn't happen. You can sue for whatever you like, doesn't mean you'll win. To sue for specific performance, you need a signed contract. No signed contract, specific performance doesn't apply. Specific performance means doing what the contract says. No signed contract to do anything.
 
I'm a Realtor and these scenarios are not that common with those types of prices. And in reality I've had several cases where the seller backed out even with a signed contract. Last one the seller escaped with just having to pay the home inspection cost. Other times the realtor got nothing with just the promise that they would get to relist later or the seller paid off the broker, but not always with the full contract price. I think the justification for that was that there was less work involved, no closing to go through or home inspection, smoke detector, hand holding etc.

And again you're conflating the two things. You can claim discrimination, but the fine for discrimination is 10k. There was one case where the covenants of a property said that they couldn't sell to African Americans but the laws made that statement void. But the owner told that to a potential buyer. They did sue and won, but I think the seller just had to attend some classes and pay a minor penalty. The buyer wanted to get the house for free. Didn't happen. You can sue for whatever you like, doesn't mean you'll win. To sue for specific performance, you need a signed contract. No signed contract, specific performance doesn't apply. Specific performance means doing what the contract says. No signed contract to do anything.

There's a reason it's not common. Because it would be foolish to play this game. MOST people grasp that. Lawsuits, fines, paying commissions for default, etc. are obvious reasons.

Back on topic, I do also believe within 6-18 months when the dust settles, evictions, foreclosures, inflation hits hard, people cannot afford the homes they overpaid for, wages don't keep pace with inflation, and so forth, we're going to see a tsunami of a crash IMHO.
 
I cannot wait to see home prices drop, at least in Utah. I also cannot wait to see the massive crude oil correction i think we are heading towards.
The conditions are such were there is no "bubble" in Utah. There are out of the country buyers, out of state buyers, and those who grew up here wanting to buy a home-chasing from a practical standpoint-very little inventory. NOW-under those conditions explain to me how the market is set for a price correction?

Crude oil-I see a correction but we may never see sub $2.00/gas again.
 
The conditions are such were there is no "bubble" in Utah. There are out of the country buyers, out of state buyers, and those who grew up here wanting to buy a home-chasing from a practical standpoint-very little inventory. NOW-under those conditions explain to me how the market is set for a price correction?

Crude oil-I see a correction but we may never see sub $2.00/gas again.

Well, the foreclosure and eviction moratorium ended 2 days ago. Tenants haven't paid rent in a year. Ripple effect, hits landlord/owners who are equally behind on mortgages having not received the rental income. Hard to make up 1 year of payments, so we may see millions of defaults near term. Perhaps not. But we also might see owner/landlords now quite gun shy about owning/renting properties so bailing on that business model and dumping houses, which is a downward economic force.

Would YOU gamble and own a house to rent it, given what we just experienced where your renters don't pay for a year? I would not.

And, just like in 2008, people purchased over-priced homes with low interest rates but they cannot afford them. Set aside the folks coming from CA with cash buying outright; I'm talking about the 20 and 30 somethings with no incomes or low incomes who got easy loans and low interest rates on houses way outside their means. Either pre-pandemic or during the pandemic. These people have been living on very generous unemployment and stimulus money, with no commuting expenses, no daycare expenses, no eating out expenses, b/c they've been sitting home for a year. Many have not paid their mortgages. Foreclosures are eminent.

When they have to get a reliable car, pay fuel, pay insurance, eat out or pack lunches, pay for daycare, etc. they won't be able to maintain the standard of living they enjoyed and will be forced to downsize their homes.
 
No bubble in Utah? Houses in Hurricane going for a million dollars for no reason.
 
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Well, the foreclosure and eviction moratorium ended 2 days ago. Tenants haven't paid rent in a year. Ripple effect, hits landlord/owners who are equally behind on mortgages having not received the rental income. Hard to make up 1 year of payments, so we may see millions of defaults near term. Perhaps not. But we also might see owner/landlords now quite gun shy about owning/renting properties so bailing on that business model and dumping houses, which is a downward economic force.

Would YOU gamble and own a house to rent it, given what we just experienced where your renters don't pay for a year? I would not.

And, just like in 2008, people purchased over-priced homes with low interest rates but they cannot afford them. Set aside the folks coming from CA with cash buying outright; I'm talking about the 20 and 30 somethings with no incomes or low incomes who got easy loans and low interest rates on houses way outside their means. Either pre-pandemic or during the pandemic. These people have been living on very generous unemployment and stimulus money, with no commuting expenses, no daycare expenses, no eating out expenses, b/c they've been sitting home for a year. Many have not paid their mortgages. Foreclosures are eminent.

When they have to get a reliable car, pay fuel, pay insurance, eat out or pack lunches, pay for daycare, etc. they won't be able to maintain the standard of living they enjoyed and will be forced to downsize their homes.
Actually I did quite well during the pandemic. Only had one guy skip out on me owing 2 months rent, but I had the last so only lost 1 month. Another unit flipped over and I was able to get market rent which was a few hundred higher. Most landlords I know have multiple units and most of them were ok, one landlord with multiple units had one tenant he couldn't get rid of, but sometimes that's kinda normal even in non pandemic times, takes you 2-3 months to get rid of them.

As for not being able to afford them, they're pretty strict these days with DTI ratios, you used to be able to go a lot higher and underwriting standards are tougher. I did do a refi and many banks weren't doing the product I was doing, non owner occuppied, more than 1 unit investment property, took a long while and shopping around didn't yield any lower rate for me. I was using a credit union which sometimes have the lowest rate. The foreclosure bans ended a while ago. You can't use unemployment income and stimulus money to buy a house. Basically the difference this time is that loans aren't as easy to get as they were in 2008.
 
Actually I did quite well during the pandemic. Only had one guy skip out on me owing 2 months rent, but I had the last so only lost 1 month. Another unit flipped over and I was able to get market rent which was a few hundred higher. Most landlords I know have multiple units and most of them were ok, one landlord with multiple units had one tenant he couldn't get rid of, but sometimes that's kinda normal even in non pandemic times, takes you 2-3 months to get rid of them.

As for not being able to afford them, they're pretty strict these days with DTI ratios, you used to be able to go a lot higher and underwriting standards are tougher. I did do a refi and many banks weren't doing the product I was doing, non owner occuppied, more than 1 unit investment property, took a long while and shopping around didn't yield any lower rate for me. I was using a credit union which sometimes have the lowest rate. The foreclosure bans ended a while ago. You can't use unemployment income and stimulus money to buy a house. Basically the difference this time is that loans aren't as easy to get as they were in 2008.


In 2008 there were ~3 million foreclosures.
In 2009, another 3 million foreclosures.
In 2010, another 3 million foreclosures.

At the end of 2020, 3 million loans were in forbearance. Various sources are currently predicting some 5-13 million foreclosures or evictions (mixed numbers, many sources) imminently due to the end of the pandemic moratorium. For instance, CBS projects 6 million evictions, 7 million foreclosures. Forbes is suggesting 8 million total.

Then again, other sites suggest we will not see a tsunami of foreclosures and/or the Feds will pass laws preventing them for a short time. Some banks like WF have extended the protections until 2022. I suspect they learned a lot from the last round and are not eager for a repeat, unless the feds step in to bail them out again.

I guess we'll find out!
 
I'm waiting for a sea of foreclosures, since every house for sale in my area has sold right away for WAY over what they should. I was looking for houses a few years ago.

If I could have financially, we would have gotten a decent $275k house. That same house over the past 18 months is so far out financially, it's just discouraging.

Actually, the house we rent was for sale for about 3 weeks at $295k. It sold last summer for $415k. 🤢
 
In his syndicated "Real Estate Mailbag" Q-and-A column, the late Robert Bruss warned repeatedly that sellers should realize that in many parts of the US a full-price offer meeting your requirements is legally considered a binding contract. Just before the 2008 crisis, the market was overheated. He mentioned then that some sellers were receiving full-price offers and actually had the nerve to make a counteroffer demanding more money from the buyer. He warned about the risks of lawsuits over this nonsense. Then came the crash and it all stopped.

Apparently sellers can get away with games in some states, but not others. The question comes up, if you're the seller and you reject a full-price offer giving you what you want, exactly why were you placing the house for sale in the first place? Why waste your time and everyone else's?

The big performers in real estate historically have been the coasts, most of the big metro areas, and a handful of hotspots. The hotspots can change. The rest of the US mostly has not seen the crazy pricing we're discussing here. Years back my brother's ex-wife bought and sold several years later a house in Texas near Waco for under $100,000, and the sale was after repairs and improvements. Some markets just aren't doing well.

Observation: drive through some rural areas in much of the country and you'll see lots of abandoned properties with crumbling houses and old business buildings. I see this in Southside Virginia and northeastern North Carolina just an hour's drive from the hot Virginia Beach market. Often that rural land can be bought for a song from the county for unpaid taxes. Reality in many areas is a far cry from the $1 million starter homes in the insane markets.
 
If I offer to sell something at a certain price, and someone shows up with a qualified offer, cash, etc. at that price, I think I'm legally obligated to sell it. Otherwise, I can expect a lawsuit. And if the prospective buyer is a member of a protected class, probably a civil rights violation. I'm just saying it's risky to list something too low thinking/expecting a bidding war.
I doubt someone is going to hire an attorney just to fight the home seller. A smart buyer will move on and use the funds on another home.
 
There's a reason it's not common. Because it would be foolish to play this game. MOST people grasp that. Lawsuits, fines, paying commissions for default, etc. are obvious reasons.

It is very common, but only in very hot markets. You would have to have quite an incompetent real estate agent to list way below market value in areas where multiple offers are not likely to happen.
I have seen in done in Canada, California and Texas and I'm not even in real estate lol, so your statement that it is not common is simply based on your perceptions, not facts.
 
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