real estate insider trading (?)
A few years ago, I was house shopping. I wanted to stay in the same neighborhood if possible, I really liked the laid back community and my walking route was great. I noticed a particular house was vacant, and the property was still maintained quite well.
After about a year, there were notices on the door. I was curious and hopeful that it might be going for sale, so I called the #’s listed only to be told there’s nothing they can tell me. At this point I was hopeful it would go for sale soon. I continued my daily walks noticing the house everyday and hoping I would get to buy it.
Then one day about 7:30a.m. as I rounded the corner, there it was! A For Sale sign was in the yard and I was thrilled! I immediately texted the real estate agent and this was her reply:
“That house actually has multiple offers on it. I showed it as well. I would love the opportunity to help you.”
A few weeks later the SOLD sign was attached to the For Sale sign and it still sat vacant for several months. Approximately one year later a work truck is parked out in front of it and over the next couple of months work is in process.
Out for my walk, I round the corner and there’s a For…. RENT sign in the yard by the same company (Coldwell Banker) that had it for sale! I called the real estate agent wanting to know what was going on, did Coldwell Banker sell it to Coldwell Banker or just decide to keep it and rent it? I never got a straight answer from her so I researched myself. Here is what happened as I observed the property and as confirmed with the property tax records which are public information:
Coldwell Banker put it up for sale with the local Coldwell Banker owner/broker as the listing agent.
One of their real estate agents “DL” bought it.
Coldwell Banker put up a sign For Rent with the real estate agent “DL”.
(My call to the real estate agent.)
Coldwell Banker sign comes down and up goes “L” Investments Rent Sign.
A couple months later, the property is rented and is now “L” Investments rental property.
My problem with the entire scenario is it reeks of real estate insider trading. Not that there is such a thing, but if there was this is it. A property for sale, an agent with the listing company buys it, does the title work to move it to his investments company, and now it’s rental property.
What’s bothering me is the entire real estate market is going the wrong direction. It seems everyone thinks they can make money off rental property. In addition to their personal home, they buy another home, then seek to rent it. They really can’t afford 2 mortgages and the upkeep of both, so the rent is then inflated to cover the 2nd mortgage and any possible repairs, and or maintenance to the 2nd property.
THEN, the true real estate businesses take notice that a similar property they rent for $1,000 per month is being rented for $1,500 WHAT? We can’t have that! So they inflate their rent to the “going market rate” of $1,500. NEVER MIND that it’s completely unnecessary to raise it to that price! But, hey, after all it is the “market rate”.
Result: RENT IS HIGHER THAN HOUSE PAYMENTS! <– which is absolutely ludicrous!
Rent is so high there’s no way to save $ to possibly buy a home and you’d better have some room mates to help share expenses.
Does anyone else remember when the whole reason you rented was so you could save some money? How many young families are struggling because someone wanted to make an extra buck on a rent house?
Does anyone else see a problem here of say maybe a feudal system on the horizon?
(If you are unfamiliar with a feudal system – please research and educate yourself.)
It frustrates me and makes me feel helpless.
At the same time any change starts with the individual.
(NOT the government. If you think passing a ton of laws/legislation is the way to stop greed from the Corporate CEO to the individual living on the street, I feel bad for you because you’re seriously misinformed. Greed is not a legal issue, it’s a moral / ethical heart /emotional issue. If people are afraid what they have, however large or small, will be taken from them, they will figure out how to keep it, period. Oops, I digress which is quite usual for me.)
Since I am an individual and not a real estate company I will not buy a 2nd house and charge exorbitant rent in order to cover the 2nd mortgage and the upkeep that is really not in my budget either.