Home For Sale: Fully Furnished; Concubine Included

It is said that home is where the heart is, but usually home and heart don’t sell as a package deal. However, desperate times call for desperate measures, and one Ms. Deven Trabosh—who apparently lost her dignity with her equity—is selling her house and her hand in marriage as a package deal. It’s like Indecent Proposal meets the Amityville Horror.

Because the story is so sensational, Trabosh has been getting plenty of coverage on the offbeat news waves, and I hesitate to give her any added attention. I’d rather write about the economic impact of recession on the sex trade and plastic surgery industries, but Ms. Trabosh represents both subjects nicely, as seen in this Boston Globe article. Most coverage of this debacle has made it out to be a human interest story, portraying this woman—in her own words—as “a Princess Lost in America” with a fetish for European men, but it is far more compelling to view it in terms of a different kind of interest: the return on investment for any sap who decides to play house with Ms. Trabosh, or—as I like to call her—the Trabesty.

Florida’s real estate market has been one of the hardest hit in the country, and now may be the best time to buy property as a long-term investment. With so many foreclosures available, is it really a good investment to buy a luxury home at more than the full asking price? The Trabesty listed the home at $340,000 on a traditional real estate site, which is already somewhat steep for such a saturated market, but then she upped it to half a million in the house/harpy package deal. Apparently, she thinks she’s worth roughly $160,000 dollars. How...generous.

We can only assume that most interested buyers will be interested mostly in the Trabesty’s tangible assets, which were described in the article as “Barbie-esque” though they are more appropriately labeled “Barbie-qued”. Over time, these assets can be expected to depreciate significantly, require high-maintenance and all without any hope for resale. It is true: Like all “alternative investments,” buying Ms. Trabosh’s claw in marriage may offer benefits that can’t be put in monetary terms. But so can investing your money in deserving, investor-driven charities instead of buying a shot with an opportunist who may just divorce you and take “her” half of the house in a matter of months.

Any lonely fellow who contacts the Trabesty—and they do—is advised to conduct full and proper due diligence. I recommend seeing if she can be leased before committing to buy, and I certainly recommend a pre-nup to go with this aging pin-up. Trabosh says she is offering a fairy tale come true. I’ll certainly agree that the story is "grim", but will she find Dunce Charming? If you believe in fairy tales, her character is more likely to end up in the oven than at the altar.

The REX Agreement: Capitalizing On America’s Real Estate Pessimism

Unsure about whether your home may see much appreciation over the next five years, and looking for some liquidity on your home equity? Then a REX agreement might be the solution for you.

What is a REX agreement? What it boils down to is an exchange of cash today for a share in the future appreciation (or depreciation) of your home. Let’s look at an example:

Say your home is worth $1 million today. You decide to take a payout from REX of $100k in exchange for a 40% stake in the future change in value of the home. Without getting into the more complicated parts about how REX structures their agreement to share in the appreciation or depreciation and get their original funds back, let’s consider three different options for sales price of the home after five years.

Sales Price	Gain/Loss	Homeowner Share	REX Share	Homeowner Gross	REX payout	Homeowner Net
$1,100,000	$100,000	$60,000	$40,000	$960,000	$100,000	$1,060,000
$1,000,000	$0	$0	$0	$900,000	$100,000	$1,000,000
$900.000	$100,000	$60,000	$40,000	$840,000	$100,000	$940,000

If the homeowner sells for a larger amount, REX will keep a portion of the upside. If the homeowner sells for a break-even price, then the homeowner has been able to use the original $100k payout without any costs other than origination fees for the REX agreement. If the homeowner sells for less than the original appraised value, then REX will actually lose a portion of the original $100k payout it gave to the homeowner. In other words, REX only gets paid (other than a return of their payout) if the homeowner makes money.
While these scenarios may sound enticing as an alternative to using a loan, there are some other key factors to know about the REX agreement:

• Appraisal value – REX’s appraisals will likely come in lower than the bloated appraisals we’ve come to expect in the past. REX requires 6 comps, twice the number of most residential appraisals, and is much more particular about ensuring those comps are actually good comparables for the property.


• Owner occupation – Thinking of using a REX agreement to take some cash out of your home to go buy a new house? That’s a no go. Part of the agreement states that you will continue to occupy it as your primary residence.


• Closing costs – Although REX started with few closing costs, typically paid by REX, they will begin charging a 3% origination fee within the next few weeks.


• Home values – For the deal to work for REX, your home probably needs to be worth $350,000 or more. The average home price that REX has been funding is about $750,000, which is one of the reasons it has only ventured into 6 of the higher-priced states (California, Washington, Oregon, Illinois, Florida and Massachusetts). There are other states that REX anticipates coming online before the end of the summer, including Colorado, Connecticut, Rhode Island, Maryland, Virginia and New Jersey.


• Five year timeframe – The REX agreement includes penalties for selling your home before five years have passed. The penalties are steep during the first year (25%), declining by 5% each year after that. After five years there is no penalty, but REX still shares in any gains in the home’s original appraised value.


• Amount of equity – You’ll need to have at least 25% equity in your property, based on the REX appraisal, in order to qualify. REX will provide a cash payout of up to 13% of the value of the property, which would put the total value of liens on your property at a maximum of 88% (75% in loans and 13% in REX’s payout).


• Inflation – With a timeframe of a minimum five years without penalties, inflation could likely add value to the home (even if the true inflation adjusted value of the home doesn’t change). In that scenario REX would be entitled to share in their portion of that gain.

On another interesting note, the big money behind REX & Co. is AIG. They are not only a major shareholder, but also the institution providing the bulk of the financing for the actual REX agreements. That ought to say something about what the “smart money” thinks about where the market is headed.

MyMarketware.com: The FSBO'S Answer to Marketing Real Estate

Marketing was once the FSBO’s biggest obstacle, but one company, MyMarketware, has developed MarketSites to help sellers overcome this obstacle by creating individual home listing web pages for a property.

Whereas other sites list several properties in particular cities, neighborhoods or even streets, MarketSites allows the seller to send buyers directly to their property. View a sample MyMarketware page here. Sellers can upload up to 100 photos of their property, embed audio and video podcasts, change SEO settings with Meta descriptions and keywords and add RSS functionality to their page. Users can also customize links to their page, and modify their link dashboard within their user accounts, allowing them to be reused for future listings:

After paying the flat $39 fee, sellers can create a URL using the physical address of the property, which is a helpful tool for out-of-town buyers who may not know the area in which they are looking to buy.

Listings are syndicated by some of the bigger seller sites like

Trulia, Craigslist, Yahoo and Google Base.
For more information and updates on the site, visit the MyMarketware blog.