Let's say he signed up for an in store charge account. If he can't pay, is it the store's fault for giving him the account in the first place?
Yes, I know there are predatory lenders out there, but come on...What it all boils down to is personal responsibility. If I buy a cup of coffee at McDonalds, I can reasonably assume it's hot and that I shouldn't spill it on myself.
If you are a buyer, it is your responsibility to be aware of what you're buying.
As a Realtor--The finance portion of a transaction is not my area of expertise, nor am I even licensed to offer financial or mortgage advice. I don't know how much money my clients make, nor do I know their credit scores. None of my business. I refer them to trustworthy mortgage planners, but I do not pretend to be involved in that process, nor would I want to.
So no--I didn't cause any meltdown.
The NAR is a hack organization, I think everyone realizes that -- or at least, hopefully by now realizes that. I've got a link below that leads to some of the 'scripts' they train agents to use. Sobering humor found amongst the search results.
That said, I still don't think you can blame agents across the board. Certainly a percentage of them (and I really don't know what percentage) spewed these NAR ramblings and got some clients in bad situations while desperate to pump up their closed transaction count. But on this board at least, somewhat hidden amongst the cheerleading squads, I've read some very honest assessments from agents that gives me some hope in the industry. Not a huge percentage, but they're out there. I don't think you can blame a profession across the board for this mess. At the end of the day, I still feel it was largely the consumer's fault for this fiasco.
I never said any of those glib lies that Bostonguys salesman said to him, but I don't doubt that he heard those things from his agents. I read or heard similar whoppers during the boom. Those lies made me cringe then and I spoke up and out against them. Warning buyers that homes prices were more likely to fall than to rise or even stay level cost me dearly in lost income during the boom, when some colleagues were rolling in dough.
Just as I was willing to predict the end of the boom in 2005, I an equally bold to predict an end to the bust in 2009. This time, it is costing me listing side commissions as I advise owners who are not needing to sell that prices should be better in a year or two, they are taking my advice and waiting to list.
It hurts that I am lumped in with the crack dealers, I feel the same righteous indignation at that insult that medical marijuana providers must feel.
So in part, I think Bostonguy has some valid points concerning a number of realtors. My guess is that with tough times, they are no longer in the business. There are some out there that still do not want to face reality, and realize that the market IS in a downhill slide right now. Prices are falling. When the median house price in Seattle is still 50% higher than it was just 5 years ago, things will adjust downward. I doubt that many people can say that they make 50% more income than they did 5 years ago (sports figures and bank presidents notwithstanding :) )
This is not to make a blanket statement and condemn the entire realtor industry though. There are MANY professionals out there who perform thier jobs ethically and legally. I know and have used some very good realtors in the past. All of these I feel privileged to still be able to call friends as well as business associates.
I do think that this era is a good opportunity for a wake-up call - a chance to review the industry, see what is right, and what is wrong, and make the corrections to make it better for the future.
Justin, you are right, it "takes more than one to tangle," so why shouldn't Bostonguy express his disdain for the disgusting agent/broker practices that take place -and took place- in the world of residential real estate. I.e, one of the tangible moving parts that caused the real estate crisis. Bostonguy makes a valid point about the ethics of real estate agents when he said to just look on the Trulia platform and you will find a ton of examples where agents are (still) steering buyers and sellers into buying and selling without answering the question(s) posted. You don't have to go very far to find real examples.
It is no secret there is a huge fundamental flaw in the way traditional residential real estate companies operate, a flaw that added to the real estate craze and crash that occurred from (but is not limited to) 2001 - today.
Ignorance and fear of change will ultimately be the demise of the "traditional" real estate agent/agency; That's just Business 101.
Anyway, great (healthy) debate! Keep it coming ....
Oh, except they can't say "this neighborhood has a lot of black people". Well, why on EARTH were they ever allowed to say "this neighborhood is going to go through the roof." They're not financial advisors. They should not be allowed to make forward looking statements - end of story. If you want to argue with me on this - fine... then you know what? Put your predictions in writing and if you are wrong - pay up. Now, let's see how many people argue with me.
Also, jt is too easy to become a realtor and people who do not beling in the profession are ruining it for people who do. In Nevada, 1/2 of them are ex-prostitutes (that's legal here too). And, they were great at it (naturally). And now guess which state had the biggest bubble burst in the country?
Letâ€™s remember if you would not have been qualified for your loan would you have been in this mess today? Did you have 20% of your hard earned money in this deal? If you would have been required to, I would imaging that you would have done more of your homework up front instead of at the back end and found a qualified respected Realtor that was not in busness for the short term. Maybe you should take your experiences and be an advocate for responsible agents. How about becoming one your self and set the example for others. I have known many successful entrepreneurs that have built successful businesses from experiences like yours.
This would be a more productive use of your time and frustration. Only one persons opinion.
No, real estate is too disorderly and corrupt to have ever been infiltrated by prostitutes, and if it had been the customers would not be so disappointed afterwards.
First, I am not under water at all (yet). However, the opportunity cost of me buying this home vs. renting (which I *should* have done is unknownâ€¦ could be 100k). And, I earned every penny the hard way â€“ never a stock option, never an inheritance. Most of my education was paid for by fellowships.
To be clear, I am blaming the crack DEALER and not the crack manufacturer. They are both responsible, but the dealer is the one who sidles up to you and convinces you to do something you should notâ€¦and even convinces someone who knows better using very slow, deliberate, processes of manipulation like an abusive boyfriend (do you watch Oprah?). No lender ever showed anyone a house. No lender ever established a relationship with you and made you feel like sh*t for 2 weeks when you went to rent after a month of looking at 40 properties that you knew were overpriced.
I can't read all the replies... but Denise, us braniacs do use insulting terms - sorry to shock you and your grandma. Maybe I can repay them my tuition by selling you my place - do you want it for what I paid? No? Why not? The market never goes down, Denise.
And then 2 posts higher, I get: "your an idiot." Come on, Mike... it's "YOU'RE an idiot" (with an apostrophe) not "Yourâ€ (which is possessive). And no, bushwacked, I am not a McCain supporter...which I am not even sure has any relevance to my opinions at all. Why donâ€™t we stick to the issues?
By the way, I don't think I think the lenders are immune. All of the focus in on them, but the media WILL turn on you the same way that they turned on all of the stock brokers during the dot com bubble...and so will the regulators. It wasnâ€™t a huge backlash because broker-free online accounts put the blame on the buyers. However, *nobody* blamed margin allowances given by e-trade and other brokers. Just because you are given margin doesn't mean you should USE your margin to buy 10000 shares of pets.com (that your broker may have convinced you to buy).
If you donâ€™t understand how derivatives and CDSs work, then I canâ€™t help you understand why they are mostly not responsible in this post (in isolation â€“ had realtors & lenders not done what they did to inflate the market) What Warren Buffet says about derivatives is not gospel. Berkshire Hathaway has tons of them on their books (unsecured too).
I have worked with 3 realtors in my life and those comments and quotes are the amalgamation of all of them from 2003-2008 (in my post in the "answers" section). I do not think they are all the minions of satan, but a few are pretty bad. I even hired one to sell my place who made a â€œbattle planâ€ of all the lies we were going to tell to dump it. I politely ended the meeting and she left. Was I shocked? No. Just reinforced my feelings. When my listing expired, you would not BELIEVE the things that realtors were saying who called to get my listing. It was VILE, manipulative, and completely unethical â€“ and YES, I am going to use all of those words. I donâ€™t have the space to repeat the quotes. Again, reinforced my feelings. I had 2 insane b-tches who actually said â€œare you sure you want to wait a year to sell and lose that much more money?â€ as if she is in the position to make that comment. Then, another one said â€œwell, where would you have moved if you sold--- and donâ€™t you STILL want to move.â€ Uh â€“ yeah but I canâ€™t really lose more than 100k selling this placeâ€¦and thank you for reminding me my lifeâ€™s goals and dreams have been completely ruined! Itâ€™s been like this ALL WEEK from the bottom feeders trying to get my listing. One is worse than the next. Iâ€™ll tape the next one and post a link since you all seem to think realtors are saints.
Also, note that I replied below and made it clear I know realtors do not do appraisals.
Now I will end with this (And hopefully end for good. I am happy to have sparked some anger - but I guarantee you it's only 1/100th of what I am dealing with right now as I am living with my parents while trying to sort out this mess):
David Lereah, former chief economist of the National Association of Realtors (NAR), distributed "Anti-Bubble Reports" in August 2005 to "respond to the irresponsible bubble accusations made by your local media and local academics." Among other statements, the reports say that people "should [not] be concerned that home prices are rising faster than family income", that "there is virtually no risk of a national housing price bubble based on the fundamental demand for housing and predictable economic factors", and that "a general slowing in the rate of price growth can be expected, but in many areas inventory shortages will persist and home prices are likely to continue to rise above historic norms."
It was taken down off the NAR website but copied to Wikipedia at the link below.
I don't know what kind of REALTOR you have come across....but I take offense to you classifying us as "vile, unethical, glib and smarmy. My grandmother always told me this: People who insult and slander do so, because they are not intelligent enough to get their opinion across in an intellectual manner. Hope your parents weren't the ones paying for your "Hardvard" education......if they did.........they should try to get their money back.
Realtors exist to complete and close transactions. You can't blame them for doing that job. If someone is dumb enough to believe motive lies elsewhere, caveat emptor.
I believe I have met some of the same Realtors you speak of. So, I have a question for you. Why is it when Sears or Wal-mart or the local car dealer has a big 50% off sale everyone races down to purchase their goodies. But when wall street or a house is on sale everyone thinks we are going to die?
Wouldn't you agree that this is one of the best markets we have seen as far as price and rates and terms, in way over 8 years?
There are very little ethics in business: my bank does not charge me a certain percentage to borrow money because it is ethical, they charge it to make money, as much as they can. Ditto for when I purchase a CD they are not paying me interest because its ethical.
Its unfortunate that more buyers are not skeptical of appreciation or value claims, but the fact is they are not. We cannot regulate claims made by housing sales people any more than those made by airplane salesman, boat salesman, clothing salesman, insurance salesman, and any other type of commissioned salesperson.
If the market had jumped 22% in the Hamptons instead of dropping no one would be discussing whether this gain should be shared with the broker.
Caveat emptor: Beware of bondo.
There are three things that I think are important to point out. 1st, Realtors do NOT make loans; and unless we are talking about Clientâ€™s that have contractually hired us to represent them, we do not make specific lender recommendations. I do make lender recommendation to my â€œClientsâ€, and I stand by every recommendation I have ever made. 2nd, Realtors are not appraisers, and do not make any certification of value to the bank, lender, or underwriter. Appraisers do that, are unrelated third parties hired by the lender, not the Realtor. 3rd, housing value move according to the simple economics of supply and demand. Always have, always will. Realtors do not have the ability to â€œcreateâ€ the market.
Again, I understand your frustrations, because these are very challenging times. But please try to refrain from inciting anger and hatred. We still need to move forward together as a society. Discussions on how to improve the process or how we can put safeguards in place are healthy. Finger pointing and accusations are not.
Realtors are there to help client make informed decisions. A good Realtor will assist their clients to make responsible decisions around buying and selling, and help them to achieve the goals that the client has set. And that is what we will continue to do for years and years to come. While it may not be the easiest time to sell right now, it is an incredible time in our history if you are a buyer or an investor. And we are there as always to provide critical services to the marketplace.
Oh before that - Yes, John I know appraisers do appraisals - not realtors. If realtors did it, this crisis would've happened 5 years ago. However, appraisals are based on comps that are in a market that was inflated by - you know who â€“ realtors pushing buyers to buy more than they should be! I am not denying the underlying psychology of wanting to outdo your neighborâ€¦ but who poured gasoline on the flame of that psychological motive? Also, just how many times did lenders magically appraise a property for whatever the realtor convinced the buyer to pay? It was all a big incestuous mess. John, the credit card ads you are receiving (as well as the home equity offers) are always subject to final approval â€“ even if they say â€œpre approved.â€ Anyway, the vast majority of the debt on Wall Street was due to bad mortgagesâ€¦in addition to refis. However, refis alone wouldnâ€™t have made this happen..and I'm low on space.
Kevin, I am not suggesting the "profession" (if you can call it that) be eliminated. The comp structure, culture, and ethics, need an overhaul. Lenders didn't get behind people and push them into homes.
Ok moving on:
When I asked my realtor, "Isn't there too much supply in this area for the number of buyers?"
-- Answer: "There will always be buyers -- In the future, most people will own two homes! Also, the city never runs out of buyers -- maybe some far off suburb would. We could barely keep houses on the market last year."
What about the fact wages are not going up but home prices are?
-- "Wage increases don't matter when interest rates are so low. All that 'really matters' is what you pay each month...and since rates are this low, you can afford a lot more."
What about if interest rates go back up?
-- "Well, then everyone would be in trouble, so you know 'they' wouldn't let that happen" (possibly the worst answer of them all... rates actually cannot go up - and we're going to end up like Japan who has had a 0% interest rate for 10 years and people are STILL prisoners in their own homes.)
What if it gets harder to get a loan and there are less buyers?
-- "Since I've been a realtor - it's only been easier to get loans. You just can't believe what things they come up with now to get people into homes. You'll always be able to get a loan."
What if the ARM readjusts?
-- "Then just refinance!"
Do you think rising gas prices are going to hurt the economy
-- "Oh that's hardly a factor - that makes people want to live in the city even MORE. And, gas prices will come down again"
It's amazing that I drank this kool aid. It makes me sick that I did. And it makes me sick that people are blaming bankers who have nothing to do with this...at all. Generals, who are not on the battlefield, have nothing to do with the fact that soldiers rape women. Generals run the show at large and make the dirty work done by the sodiers possible.
Now on a board like this, no realtor would admit that they parroted the exact quotes I have listed above - but you all know you did. In fact, I can probably just go in the archives of this board and FIND these quotes.
So, I have another question: Did you ever feel even a twinge of guilt when you put someone into a mortgage for a 1 bedroom condo that was $2800 a month who worked in a job for an airline or some other tanking industry (and where rentals are $1500)? Just curious. Do realtors feel guilt? Or are you like psychopaths who can't feel those emotions?
It's too bad the 700b bailout is being put on all of the taxpayers and not squarely on realtors where it belongs. And it's too bad the bailout won't work for 10 years either - if it even does.
I am just sickened by the blame game that hasn't reached its accurate target...because people are afraid to point the finger at you - loud, middle-lower class, uneducated, brash, carnivorous, vulture psychopaths. So, just point to "elitist" wall street types who you don't know and whose job functions you don't have enough brain cells to understand. Nope, this time (my favorite new label) "joe-6-pack" got screwed by "joe-6-pack" (or jane-6-pack)... not by anyone from Harvard. The big corporate scandals that have occurred are also 1-time, highly isolated events that take out huge companies (Enron started with 1 small fraud in 1 accounting statement and it escalated from there - mostly within a group of 10 people).
THIS time, every realtor in every city in the entire country carried out the same crack-dealing lack of ethics for the past 8 years. I can't WAIT until the media catches on. They're still too scared of you - but academics are not. The psychology of the realtor / buyer relationship has already been explored in academic journals (similar to cult leader / follower dynamics) and it will start to trickle into the mainstream... hopefully soon.
I'm not a realtor, but am a RE investor and in the mortgage business. I think realtors are not totally innocent with all this, but I honestly think they are less than 20% of the overall problem. I'll leave it at that.
If you're a home buyer, why are you so irritated? Its a GREAT time to buy a home- even if the mortgage rates have gone up a bit lately... Thanks and good luck,
How about houses from Wal-mart? CostCo? They know value.
Houses sold by financial advisors? They know credit and interest rate impact.
Government agents? The IRS? They know tax issues.
Postal workers? They know where houses are, how to find them.
I'd like to hear more about the 1/2 of Las Vegas RealtorsÂ® that are ex-prostitutes.
Funny. I was just thinking; who takes the longer shower when they get home? A prostitute or a RealtorÂ®? Thereâ€™s a joke in there somewhere, I just can put it together.
Great thread, by the way.
Now with the other half... the new buyers... well they meet with the mortgage officer before meeting with the realtor, the loan officer tells teh buyer what price they should buy in and gives that paper to the realtor to find a house in that price range. Hey i know mr buyer that you only only afford a $100,000 house but you know what, we can get you an 80/20 loan, get you in for no money down, you will pay interest only for 2 years and well refinacne you then when your house is worth double anyway. hey 2 years is up, your payment of $1000 a month is now $2300 a month and oh yeah, dont forget those taxes we didnt escrow of $400 month. Hey im mr buyer, i put no money down. i am out of here.
Some buyers knew what they could afford, some should have known, some had no idea because they were swindled. Some were tricked, some were duped and some looked the other way. if the banks had just stayed with the old fashioned guidelines to approve a buyer for a mortgage we wouldnt be having this conversation.
As well as there are alot of people who once could affors their payments, through no fault of thir own they lost their jobs, their business or such. They are truely deserving of a bailout as the big wig crooks. lastly there are the tenants who are making there monthly rent payment and the landlord is not using the money for the mortgage, they as well deserve some help. But stop giving money to wall street
I am curious as to why you chose an adjustable rate mortgage instead of a fixed rate? With interest rates as low as they have been over the past few years, it seems to me that a fixed rate loan would have given you a little more security and some peace of mind.
The other question I have for you is whether or not you are considering selling at this time? Just like the stock market, you don't want to sell when the stocks are down! However, if you are looking to invest, then buy now!
I am sorry that you had such a bad experience with your realtor(s) in the past. In Texas we have a Code of Ethics which states plainly that a Realtor is not to make any guarantee regarding a property's future value. I would suggest if you need a realtor in the future that you interview several agents, as well as, ask your friends, family if they know a realtor they would recommend to you.
In the meantime, I'd be glad to help answer any questions you may have that could help you with your situation.
San Antonio, TX
to anyone that did not want to buy the property. Blame....for this curent melt down must also be put on the
buying public..who believed in the American Dream of owning a home and making a profit, as much as they could get, the RE MKT was on a high ride for years and the buyers/investors jumped in with both feet, eyes wide open. The buyers must take responsiblity for the properties they bought and the loans they signed for...greed had something to do with it..dont you think..or do we turn a blind eye to the full truth ?
The responses offered by his agent were irresponsible and ridiculous- read them.
Blaming REaltors for the housing meltdown is like blaming the stockbrokers.
I have a client, an attorney, Chief Legal Counsel for community colleges, and he told the story of a classmate of his from law school. This classmate got a mortgage to buy some investment property. The lender said, "just sign and date the bottom, we'll take care of the rest".
My friend said "You did what? You're a lawyer!"
I watched buyers (not mine) purchase homes with "stated income, stated assets", zero down. It was not their idea...the lenders had loans like that. The lenders offered those loans because Fannie Mae and Freddie Mac would buy them. Fannie and Freddie were told to expand the number of people that could buy homes...that would be the senate finance committee (Senator Dodd), and House (Barney Frank...his boyfriend was the CEO of Fannie Mae).
Mark my words...heads are going to roll.
I have never known a home buyer, we call them prospects, who could be held back from buying the house they want. If you think there is something an agent says that brings a sale about, you are in a cartoon world. Every home that is purchased is "over-priced, needs work, has flaws and issues, is a risk" but for the buyer's price, they will take it. Getting in over their head- many resist having to be pre-approved by a lender and having their credit scores determined and have to be coaxed to reveal the obvious information a seller needs in order to decide to take their property off the market.
Were you frightened by a realtor in the womb, maybe? Loose a deal or two? Where's the rationale for an agent having anything to do with the banking crisis? Once we negotiate a deal, it is turned over to specialists to make a legal contract, assess value, determine faults, inspect for structural risks etc. and sometimes wiggle out of the deal. The agent receives nothing for time spent.
I am going to charge you a fee for my work from now on.
The best market you've seen in 8 years? lol (x10,0000000000000000000000000000000) That is the most blatantly one sided view of our economy I have ever seen. You are speaking from an investors perspective, not the perspective of the American people. Distressed sellers..foreclosures..failed banks..job loss..bankruptcy....how is this the best market you've seen in 8 years? You're Wal Mart Wal Street analogy alone reveals a whole lot about where you are coming from. See, a sale at Wal-Mart is a basic selling principle, a trade off between profit margin and volume. A "Wal Street" sale, however, has more to do with peoples credit & livelihood vs. a small minority of big pocketed investors who, perhaps in the same way you mentioned it, view this housing crisis like a BIG OL' SALE.
Keep in mind, I am a short sale expert and I believe that short selling properties to investors is a great way to stimulate our economy and save/make everybody lots of money. However, you need to understand that lots of people ARE "dying because of Wall Street." Comments like that can be easily misconstrued and may cost you lots of business, especially with educated buyers. Might want to clarify where you are coming from next time. Comments like that make us look greasy and profit centric.
Instead, many buyers had real estate agents new to the industry, agents to whom the loose ratios and lend to- a- pulse practices were their reality.
You'll recognize them when their name appears in the paper with a house in foreclosure, because they bought into the whole idea, too- I think that the assumption that they were in "cahoots" or manipulative in an evil sense is affording too much credit.
Bostonguy, it would appear that perhaps you dealt with someone newer to the industry- at least, I hope so.
These (with no or poor English) folks are hair stylists and manurists who make minimum wages plus tips and yet there were coaxed into buying 500K to 750K homes few years ago.
And now their houses only worth 299K or less because I have checked at the County tax records.
But you being a Harvard graduate (MBA) and you let the slick RE fool you.... :)
I don't know what to say...............
Live and learn, I guess.
So the lenders aren't the ones to blame for the housing crisis? lol
So what are you suggesting? Eliminate this profession and allow homeowners to wheel & deal on their own? Sure that'd be great, FOR ATTORNEYS!