Vatamin, Both Buyer and Seller in 94582

Does any of the RE pros out there, if he/she recommended buying 2 or 3 yrs ago, have the guts to admit that?

Asked by Vatamin, 94582 Fri Feb 20, 2009

he himself or she herself was simply wrong or at least was a little bit too aggressive at that time?

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Answers

86
My argument is that yes, the Realtor® is very different than the car salesman. And I say that with admiration and affection for the Realtors® here, especially JR.

The Realtor® represents him/herself as a Real Estate professional who should, by any common sense measure, know more about Real Estate than I do. But, you might say the car salesman represents himself as a “car professional” that knows more about cars than I do and earns a commission just like a Realtor®. Good point.

But here’s the difference.

I’m paying the Realtor® for his or her expertise and that Realtor® has a fiduciary responsibly to represent my interests. I’m paying someone who represents themselves as a subject matter expert; I’m paying for that expertise.

Many paid for that expertise and have a boat-load of negative equity and heartache to show for it. What you guys are saying in the face of that is, “How was I supposed to know? I’m a Realtor®. I just sell houses!”

It’s called “willful blindness” and it’s not a defense.

Just 12 months ago, just as it is now, it is obvious to even the most casual observer, let alone a “professional” that the real estate market was heading down. The plainest reasons:

1) Affordability
2) Foreclosure rates
3) Sales down
4) Supply up

It doesn’t take a rocket scientist to digest a few obvious facts and come to an informed conclusion. The conclusion in this case was simple and self evident; the market was heading for pricing declines that would quickly destroy the equity of new home buyers.

But 12 months ago you said, GTTB. And now you say GTTB.
~~~~~~~~~~~~~
John, you made me BLUSH!

I don’t see a lot of realtors continually say GTTB, even here. Some do, some don’t. It’s their opinion. You present a very articulate argument, but the one thing you are ignoring is the fact that none of us had a crystal ball. And many were sure things were going to pop soon during the first sharp price increase. I sure did. Where I live there was a large spike in the late 90s, then another in 2002-2005. I paid 200,000 for my house in 88, and when the value increased to around 350,000 practically overnight in the late 90s, I thought, well this is it, prices can’t go any higher, this must be a peak, at least for a while. What a surprise in 2002 when prices started shooting up again, and my house all of a sudden was worth almost 600,000! I for one thought in 2005, well this has got to be a peak—again—and low and behold, this time I was right. Now judging from friends of mine in Florida, real estate is cheap and pretty hot down there. How long before the cycle starts again? I don’t know, I suspect it will happen and some of those buyers are going to be sellers in the not too distant future.
3 votes Thank Flag Link Tue Mar 3, 2009
Charlene, I guess my gripe has nothing to do with "crystal balls" or "timing markets' or even Re agents making a living, or even a KILLING if it is ethical. One of the many services that agents tout to their respective clients, buyers and sellers, is the expertise in negotiations. They claim that they are their to give expert advice to ensure the buyer and seller, depending on which they have agreed to represent, will get the best price possible. Over the last 5 years,that has worked really really well....... for sellers. They have done a FANTASTIC job ensuring they got as much as possible (some to the tune of doubling their investment). My question is where was the BUYER representation? I hear stories of buyers having their agents tell them they must offer 10, 20, sometimes 30% more than the asking price!!! What? Where were the buyer's agents that said 'Whoa, whoa, whooooaaaa!!!! No client that I represent is going to pay that kind of money for a place that the buyer paid 100% less than that 2 years ago. My extensive knowledge and training tells me that real estate, while a good sound investment, only goes up an average of 4-5% a year. We'll offer them 10% more than they paid." Now you may say that other agents weren't doing that and they would have lost the sale. My answer: Why weren't the other buyer's agents doing that? Didn't they also have the fudiciary responsibility to ensure that their client paid the LEAST amount possible during the transaction? I have mentioned several times in this forum that, when it comes to buyer representation, there is absolutely a conflict of interest during every transaction. The more money your client pays, the more money you make. The answer to this conflict always seems to be "well we have ethical standards and I'd sure like my buyers to give me a referral." But as a buyer, I'd like a little more assurance that my agent is working for my best inerest than "You can trust me, I signed and oath and we all "pinky sweared" at the last NAR meeting." How about this? How about as a buyer's agent you get a 30% commission? 30% of the difference between the amount you negotiate off of the asking price? The asking price is 300K, you negotiate to 250K, and you get 15K in commission. This way the buyer knows you are working in the same direction they are.
3 votes Thank Flag Link Sun Mar 1, 2009
"It is always the right time to buy if you need a home." - Sue

This is what gives realtors bad names. To say it is always a good time to buy a house is grossly irresponsible. It truly speaks to how little you understand the market.

A home is likely the biggest liability you will ever assume.....what many are experiencing with underwater mortgages is largely due to the advice you just gave out.
3 votes Thank Flag Link Tue Feb 24, 2009
Yes I have. Here it is in my blog: http://www.trulia.com/blog/david_chamberlain/2008/12/this_fi…
This is the exerpt.
I have seen a number of posts that blame Mortgage Brokers, Lenders and Realtors for the current financial crisis. My goal is to clear up this commom misconceptions.

It is everybodys fault who has been involved in a transaction in which the buyer could not afford the home they were buying. It is the fault of every owner who can afford to pay there mortgage but chooses to walk away because values have dropped. It is the fault of every appraiser that values a home using three months of comps, of every greedy seller, of every uninformed buyer, every Realtor and Mortgage broker who didn't inform the buyer.There are more to blame and if you are reading this you are probably part of the problem.

I can point fingers at you but I will start by pointing the finger at me, I Sold homes before they hit the mls above listing price, I participated in multiple offers on a first day of listing. I have also negotiated a sale down 25% on the first day on the market.

I do whatever I have to to get my buyers into a home that they love and can afford. I do whatever I have to to get my seller the best possible price as quick as possible. One of my buyers has multiple homes in foreclosure and that is my fault, at the time I thought we were getting good prices and would be able to sell the homes within 90 days. I was wrong.

I started Real Estate in 1999 and home values were on the rise for most of my career, I hadn't seen the market crash, My main buyer had been doing this for twenty years an tought me most of what I know He is the one in foreclosure.

What I have learned is that real estate is a long term investment, it should be made on your income and the potential for future income. If it is a personal home you should buy it because you love it and plan to live there for a while. If you buy an investment property it should be because it is a good value as it stands and with a few exit strategies.

We are all to blame but now we must work together and stop pointing fingers. Is it a good time to buy: YES Could I be wrong: YES

http://www.floridadreamloans.com

Now can we move on to the matters that are pressing in todays market.
3 votes Thank Flag Link Fri Feb 20, 2009
William Staab said,
> “Everyday I am working for myself and like every
> other profession, Doctor, Lawyer, Dentist, Stockbroker
> I have the right to get paid for my knowledge and expertise.”

William, let’s take the example a step further. Doctors, lawyers, dentists and stockbrokers have a fiduciary responsibility to advise their clients to do what is best for the client, even if it results in NO SALE or NO SERVICE.

I can go and see my lawyer and tell him that I want a divorce, but he may advise me that such a route could prove both financial and emotionally draining. On his advice, I might not get a divorce. In that case, he gave me honest advice based on his professional experience which resulted in him not getting paid.

Now, if you’re my Realtor® and I come to you and say that I want to buy a house in Albuquerque and you DON”T WARN ME that median prices have declined 16.9% in the prior quarter (Trulia.com) AND supply is trending higher at an alarming rate AND sales have fallen off a cliff then you did not live up to your fiduciary responsibilities.

If you do give such warnings, and the buyer wants to buy, well caveat emptor. You win.

If you say that you’re not obligated to say such things then your contemporaries in the professional world are not “Doctor, Lawyer, Dentist, Stockbroker,” but instead, car salesmen.
2 votes Thank Flag Link Wed Apr 1, 2009
Sandra, Vatamin's tone is harsh but it is mostly in response to Realtors giving bad advise, he has a lot of valid points. I have probably disagreed with him most of the time but I still listen to what he has to say.
2 votes Thank Flag Link Mon Mar 30, 2009
My experience very much shadows Deborah's and JR's. I have advised many clients that we don't know what the future holds for us.

If you need to sell in 2 or 3 years, you need to be prepared to take a potential loss. If you're buying with the intention of holding for 5 years or more, you stand a better chance of breaking even, or perhaps making a profit. But still no guarantee. Those people who purchased in 2005 are certainly not selling today for a profit.

I do not tell my clients that this is a good time or a bad time to buy property. I give them as much information as I can... they are also responsible for gleaning as much information as they can from other sources (newspaper, friends, family, television), and they get to make their own decision.

l do not accept John the Bruce's assertion that I choose to be "willfully blind". I counsel my clients to the best of my ability, but I am neither a mind reader, nor a seer. If I was, I'd be incredibly wealthy.

Yes, I advised clients in the 12 months (as John suggests) that the market was still trending downward. But when the client makes their own decision to purchase anyway (for whatever their reasons), I am not that arrogant that I would stand in their way and say "you are making a bad choice, and therefore I refuse to be a party to this transaction". That is not my decision to make, any more than I would tell them "this is a great time to buy, and you should buy this house right now"!

But, I too, will compliment John on a clearly written, calm dissertation of his stance. Thank you for that, instead of the common Trulia spittle-covered anti-Realtor diatribe. It's truly appreciated.
2 votes Thank Flag Link Tue Mar 3, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Thanks Deborah! You bring up another point, which I brought up a few posts down the line on this thread: it is the rare buyer who has asked for my advice—and taken it. Even the ones who begin a sentence with “I don’t know, YOU’RE the expert, what do you think. . .” all of a sudden DO know, and proceed to vehemently disagree with my opinion! I just sold to a buyer who approached every house we saw saying “Well in 5 years when we want to sell, we think this house will be worth more/be worth less, what do you think”. I have told them I have no idea what the house will be worth in 5 years. Then they’d tell me “you will be selling it when the time comes.” As if that is going to give me the data to form an opinion which has a 50/50 chance of being correct. I brought the same couple to houses that were in locations that I believe are extremely desirable as a second home (block from beach, deeded private beaches), that are priced phenomenally (foreclosed and hundreds of thousands below comps) and that I believed would be a good an investment at this time—and they wouldn’t get out of the car! They were second home buyers and bought what (judging by my experience taking second home buyers out) was a primary residence in it’s style and location, and since we are not in a high income area, they’re going to have a much harder time selling it at a profit than some of the other homes I suggested—that they rejected.
2 votes Thank Flag Link Tue Mar 3, 2009
HI John,

I agree that you presented a very well written post. I also agree w/ JR. Indeed, I did express opinions of concern about appreciation rates that were unsustainable. I warned buyers who were asking me to increase their offers 30K and more above list price. I warned buyers that the property might not appraise up. So much did warn a few buyers about the risks, that they heeded the risk and did not go forward in that bid war. Down the road, they blamed.......you guessed it.....:ME! When prices continued to escalate, they blamed me for their lost appreciation. Had it not been for my warning, they would have bought. I did not tell them not to buy. I did ask them to evaluate for themselves why they were willing to increase their offer and suggested they not let the emotional hype of bid war encourage decisions they would not otherwise make. I also had a highly educated finance buyer tell me once, "We know we are buying at the top of the market, but that's OK. We know we might actually lose money on this purchase, but it's time for us to buy a home." Their property tripled in value after their purchase, and still is way more than double in value today when compared to their purchase.

Dxxxmned if you do and Dxxxxmed if you don't.

I don't tell people it's a GTTB, but I do hold steadfast with an opinion that for some, it's the right decision to buy now. And, for some, it's the right decision to sell now. For others, they may be better off as spectators, not participants.

I speak often about the long line of stupidity. There were plenty in the train who did not realize the time when the tide would turn. If so, holders of these notes may have likely sold them off sooner, and not been stuck holding the worthless paper.

There were many who, a few years back, said, "This simply can't continue. .....Who will be able to afford to buy a house if this keeps up?" But, in the year that followed after that, prices went up again.

No one I knew talked about an economy that would experience the pain that we see now. But, many......talked about the appreciation pace could not continue. But, who knew when appreciation would halt. Predicting that in 2002 was like trying to predict a bottom right now.

Since no one knows the top or the bottom until you are past it, why would anyone, how could anyone expect Realtors to identify that exact point?

I do say hats off to John for a very good post. And, I agree....JR writes great content.

Deborah Madey - Broker
Peninsula Realty Group NJ
2 votes Thank Flag Link Tue Mar 3, 2009
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
I’ll be the first to say that a fool and his money had no right being together in the first place. Further, I concede that the blame has to lie mostly on the shoulders of negligent buyers.

That being said, I think the Realtors® continue to be very dismissive of their professional responsibilities. I think the popular argument here is that the Realtor® is just a salesman that is out for him/herself and as to the buyer, well caveat emptor.

The question is: is a Realtor® any different than a car salesman?

My argument is that yes, the Realtor® is very different than the car salesman. And I say that with admiration and affection for the Realtors® here, especially JR.

The Realtor® represents him/herself as a Real Estate professional who should, by any common sense measure, know more about Real Estate than I do. But, you might say the car salesman represents himself as a “car professional” that knows more about cars than I do and earns a commission just like a Realtor®. Good point.

But here’s the difference.

I’m paying the Realtor® for his or her expertise and that Realtor® has a fiduciary responsibly to represent my interests. I’m paying someone who represents themselves as a subject matter expert; I’m paying for that expertise.

Many paid for that expertise and have a boat-load of negative equity and heartache to show for it. What you guys are saying in the face of that is, “How was I supposed to know? I’m a Realtor®. I just sell houses!”

It’s called “willful blindness” and it’s not a defense.

Just 12 months ago, just as it is now, it is obvious to even the most casual observer, let alone a “professional” that the real estate market was heading down. The plainest reasons:

1) Affordability
2) Foreclosure rates
3) Sales down
4) Supply up

It doesn’t take a rocket scientist to digest a few obvious facts and come to an informed conclusion. The conclusion in this case was simple and self evident; the market was heading for pricing declines that would quickly destroy the equity of new home buyers.

But 12 months ago you said, GTTB. And now you say GTTB.

Buyers were operating under the assumption that market actors were performing in-line with their contractual obligations to those persons paying them – buyers and sellers. Agreed, there is a long line of stupid in the whole thing:

• The Realtor® told me this is a good home in a good neighborhood at a good price.
• The appraiser says that the home is worth the (inflated) purchase price.
• The underwriter says it’s fine that I make $40K a year and the note is for $800K.
• The hedge fund keeps buying the securities written against the notes.

And yet the little guy was supposed to be absent the day that all these highly educated professionals were served the retard sandwich? There is plenty of blame to go around, to include these stupid, overleveraged buyers.

More to your question – the market actors that said it was a good time to buy 12 months ago will continue to say so in the future. And we’ll still be here to remind people how wrong they were then and how wrong they are now.
2 votes Thank Flag Link Mon Mar 2, 2009
It is a horrible time to buy for 95% of situations. Prices are headed down. Rent is much cheaper.
2 votes Thank Flag Link Wed Feb 25, 2009
Hi Vatamin,

In 1993, a friend of mine came to me in absolute misery because he home that he paid $354000 for was worth 175000. He asked me then if he made a mistake and i told him that his mistake would be in walking away if he did not need to. Instead I advised him to pay down the principal $100 a month if he could and to just hang on. He did just that and over time paid off his home. At the peak of the last cycle his home was worth over $1,000,000 today it is worth approximately $600,000 which is still well above his original purchase price. My point is that there is rarely a bad time to purchase if you are buying within your means. There is however, less than perfect time to sell. And while we should be responsible in our acquisitions, we should be doubly strategic about when we liquidate them. After all a loss is only realized when you sell at the wrong time.

Good luck and great fortune.

Frank Spencer
2 votes Thank Flag Link Fri Feb 20, 2009
What's the point.................

Some posts just should not be dignified with any type of answer.
2 votes Thank Flag Link Fri Feb 20, 2009
Well said David, The RE Industry needs to be concerned with who the consumer blames, they are your income source. Many blame you for being involved and it doesn't matter if that's true or not, it just matters that currently that's what they think. Pointing fingers everywhere only provokes the same response anyone has to someone denying guilt for something, it's all counterproductive...

If the consumer continues to feel that the industry is more involved in denying any blame, and continueing to operate under the same " BUY, BUY, BUY" they remember from the last few years, then continue to expect mistrust and a questioning of your value. Remember they see you blame the lenders, while at the same time you're recommending they talk to one because they are experts. They see some of you crying out for looser loan standards to promote buying, and in another thread blaming loose standards for the problem. They see you say you didn't influence the buyer then, and watch you try and do it now......They see you...
2 votes Thank Flag Link Fri Feb 20, 2009
Hello Vatamin....I certainly understand your frustration concerning your question. You are the one that has all the "guts" to even ask a question such as this....A very valid question I might add. I purchased a second home myself 2.5 years ago...So you can imagine that as a real estate professional, I'm in the same boat as many of the other milliions of home owners out there.

If you would have asked me or most any other R/E professional if they recommeded purchasing a home 2-3 years ago, we would not have hesitated to say YES! of course! With home prices DOUBLING and TRIPLING in most areas, it was a great time to buy 2-3 years ago.

And if you speak to any home owner who sold a home 2-3 years ago, you will soon hear them say they made a boat load of money from that sale.

Did I believe home prices would eventually fall...YES, of course I did. Home prices could never have kept rising as fast as they did at the rate that they did without pricing average home buyers out of the market.

If you were to ask me did I believe we would be in this big heap of a mess right now? Absolutely not! I guess I was too naive in the faith I had in the regulators to ever believe they would allow something like this to happen to the America I love.

So depending on who you ask, it may or may not have been a good time to buy 2-3 years ago. But many home owners who did buy at that time, who purchased for the sole reason to have a home to call their own to raise a family and live in for comfort and not so much for short term gain..It still is a great investment for them. As when the market changes for the better...(And any true American knows that we'll fight our way out of this mess victoriously), these same people who purchased a home, like myself, 2-3 years ago, if we can just hold on, buckle down and ride the storm and not follow the herd mentality...We'll be just fine.

Sorry for the lenghly response. However I thought your great question deserved a straight forward answer.
Web Reference: http://www.alqamarmalik.com
2 votes Thank Flag Link Fri Feb 20, 2009
Look at this great Realtor ad from 2006. They actually claimed it was a "GREAT TIME TO BUY!!!" as usual. http://www.realtor.org/home_buyers_and_sellers/buy_now_ad

You will not find one active Realtor that will ever actually tell you that you should wait or rent. I do not really see what function they serve in the transaction of buying a home.
2 votes Thank Flag Link Fri Feb 20, 2009
What?! I don't think I get your question. So you are asking if a Real Estate agent has the guts to admit that they thought it was ok to buy a home 2-3 years ago? Why would they not admit that? It really is not the RE agents faults that the housing market is the way that it is now. Its unqualified buyers buying homes they could not afford and lenders lending money to people who they knew could not afford it. THEN the people and lenders getting interest only or adjustable rates. Its the 100% financing people were getting and lenders were giving. It is the "no documentation needed" products. So there are many more things out there that should have the "guts to admit" they were wrong. Not just the RE agents.
2 votes Thank Flag Link Fri Feb 20, 2009
"Administrator,"

If you're going to plagiarize from Wikipedia, you should at least give a citation and a link. Here's where you were quoting from.

http://en.wikipedia.org/wiki/Fiduciary_duty

And, to round things out, you should have included the following, also from the wiki entry. Notice my use of quotes.

"In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests."
1 vote Thank Flag Link Thu Apr 2, 2009
John: Now, if you’re my Realtor® and I come to you and say that I want to buy a house in Albuquerque and you DON”T WARN ME that median prices have declined 16.9% in the prior quarter (Trulia.com) AND supply is trending higher at an alarming rate AND sales have fallen off a cliff then you did not live up to your fiduciary responsibilities.

JR: Only if you’ve hired the agent as your buyer’s agent. If he’s the seller’s agent, he has no fiduciary duty to advise you you may be making a bad investment. He doesn’t know anyway, unless he can see into the future. Besides, you’re a smart guy. You already know prices have declined.
1 vote Thank Flag Link Wed Apr 1, 2009
"1) Affordability
2) Foreclosure rates
3) Sales down
4) Supply up "

These problems will stay aorunf for years - continuing to make prices fall more.

Nevertheless, every REALTOR will ignore that and say it is a great time to buy.
1 vote Thank Flag Link Mon Mar 30, 2009
JR said: Do you want to sell or not.

Is that the same as saying, "Do you want to sell or stay?"
~~~~~~~~~~~~~
My personal favorite is "is it the data you believe is in error or does it not meet your expectations". Then shut up an listen to the "uh, er, um, errr .... um well...." as long as it takes to hear a real answer. :)
1 vote Thank Flag Link Mon Mar 2, 2009
But read through most of these posts and you will find agents that say that when they represent a buyer part of their service is to negotiate for them the lowest price possible. If you do not claim that as part of the service then "no harm no foul".
~~~~~~~~~~~

Why can’t they claim that as part of their service? When you are working as a listing or broker’s agent your job is to get the highest price for the seller, if you are representing the buyer your job is to negotiate the lowest price possible. What is difficult to understand about that?
1 vote Thank Flag Link Mon Mar 2, 2009
JR....just sales data? As in comps? Is that all?
~~~~~~~~~~~

No. Sales data as in all sales data: comps, number of homes for sale total, number closed total number under contract total, months of inventory, etc. First part of presentation is market overview, second is my marketing plan, third is pricing of your house. First part helps them determine if they want to be one of the EIGHT or NINE houses is the entire town that go UC in a particular month or one of the 591 that go unsold. It's simple. Do you want to sell or not.
1 vote Thank Flag Link Mon Mar 2, 2009
JR.....what data do you provide to your buyers and sellers to help them make an informed decision?
~~~~~~~~~~~~
Sales data.
1 vote Thank Flag Link Mon Mar 2, 2009
they are just a bunch of salesmen whose blood of life has depended on every buying and selling of houses.
~~~~~~~

Well, duh. That's right, we're salesagents who put roofs over our heads and feed our family by putting buyers and sellers together to sell houses. We are not financial advisors.
1 vote Thank Flag Link Mon Mar 2, 2009
I don't recommend anything to my buyers or sellers. I provide them with data and allow them to draw their conclusions from that data. They all seem to think they know more than I do anyway and usually have to learn for themselves that my data is correct, their expectations are in error.
1 vote Thank Flag Link Mon Mar 2, 2009
Yes I hope you read the article Vatamin, He does not blame the people he does business with, he blames himself.
1 vote Thank Flag Link Mon Mar 2, 2009
NAR and ethics - you must be joking !!!
1 vote Thank Flag Link Sun Mar 1, 2009
GDN, No$, Dan your Realtor bashing is boring. If you don't like ALL Realtors then don't use them. At some point as a buyer you should realize that it is you who makes the investment, it is your money, it is your decision. If you make a bad choice that is your fault. You should have hired an economist to see where the economy was going, Realtors are not economists. Realtors sell homes.

The value of a home today is speculation, the value of a home tomorrow is speculation, arm yourself with the best information available and make a decision, the Realtor, Mortgage broker, Lender, Title company, Appraiser, do not, did not force you to do anything.

Maybe there should be a disclosure similar to when you buy a mutual fund" Past performance doesn't guarantee future performance.

The consumer sets the pay arangement with the Realtor not the other way around, If you want to use flat fee or rebate agent you can.
1 vote Thank Flag Link Sun Mar 1, 2009
The "Pro"'s days are numbered. They all claim some kind of expertise in forecasting the market. However, they have no clue and it finally got shown. If they want to just drive people around and hold open houses and make little posters and take pictures, but they claim to be "Experts" in the "Market[place]" of RE.


However, NONE OF THEM WILL SAY THAT NOW IS NOT A GOOD TIME TO BUY BECAUSE PRICES ARE GOING DOWN!!!!
1 vote Thank Flag Link Sun Mar 1, 2009
Sue - you take the cake for the most ridiculous of arguments - how does holding an opinion contrary to yours amount to not holding American values ?

Sad, sad .. illustrates why people have a poor opinion of your profession.
1 vote Thank Flag Link Thu Feb 26, 2009
GTTB,Gdn contrary to popular belief people do need a place to live and someone owns that house that they live in whether it is them or a landlord, all houses are owned by someone. That means they were "bought".

GTTB where did you get your statistic from.

Debate is great but just rambling off some random information is useless.
1 vote Thank Flag Link Wed Feb 25, 2009
It is always the right time to buy if you need a home. If you are buying an investment property, that would be a different question and might I ask you if you thought it was the right time to buy stocks 2 or 3 years ago? Purchasing a home is different. You are buying a place to live, a place to enjoy when you come home from work, a place to relax. Your question, a bit cocky, certainly shows that you do not hold these simple American values. So, did I recommend to anyone that it was a good time to buy? I certainly did and I do not regret it one bit as my customers are still in their homes, and they are still enjoying living in and being part of the community. (Check out my testimonials on my website and you will see newly sent messages from past customers and clients who purchased 2 years ago and are still thrilled with their homes)
1 vote Thank Flag Link Tue Feb 24, 2009
OK Charlene

Administrator, Mortgage brokers are the agent of the borrower. It is our job to get them the best rate at the best terms. Our payment agreement is with them and fully disclosed if any money is coming from the lender. If they do not have enough money to pay our fee then we can get it from the lender. But our obligation remains the same.
1 vote Thank Flag Link Sun Feb 22, 2009
Charlene: " Unscrupulous mortgage brokers (redundant phrase, I know) are the real reason this entire economy has gone to hell in a handbasket. Hey, they were the one's writing loans..."

Mortgage brokers don't write loans, underwriters do. They work for the lenders.
1 vote Thank Flag Link Sun Feb 22, 2009
Of course they were aggressive. That's how the incentive system works in real estate. They will be aggressive in good times and they will be aggressive in bad....the only thing that changes is the sales pitch.

The concept of how a buyer's agent gets compensated for representing you is absurd. The more money you pay for a house, the more they get paid. Shouldn't it be the opposite? Shouldn't they get paid more based on how much they save you?
1 vote Thank Flag Link Sat Feb 21, 2009
Charlene, if all realtors acted as you're describing the industry wouldn't have the reputation problems it now has. Problem is, very few act your way. "Now is a GREAT TIME TO BUY" is commonplace. Even the NAR has no problem spewing that line, complete with "chief economist" shills forecasting rosy pictures. For some reason realtors have been charged not only with ensuring transactions close, but churning homes as much as possible to keep grabbing that 6% sliver.

The most frightening is the "great investment!" line I hear all too often. Realtors aren't economists, investment advisers or asset managers. At best, they can assess the value of a property *at that moment in time* with a smaller margin of error than the average person. They can't forecast down the road any better than a flip of a coin yet try to sell "investments" to people -- massive, non-diversified "investments" to the average household, mind you -- leveraged 5-1, more recently 30-1 and not too far back negatively amortized to boot! It's downright crazy.

I've no problem with someone expressing their opinion, but when someone claims to be a "real estate pro" and "expert", then give that opinion in the context of "long-term investment" with an obvious conflict of interest, it's a dangerous mix. A realtor's skill set is navigating the rather complex waters of a real estate transaction -- it's not pretending they can offer a reliable investment vehicle for the public.
1 vote Thank Flag Link Fri Feb 20, 2009
Vatamin, I can hear your anger, even contempt, in your post, for realtors, and I'm sorry for that. I really am. But you've asked a BIG question, with many facets, and I'm not sure where to go first in addressing this.

I can only speak for me, but the only time I'm aggressive in real estate is when I'm negotiating for my buyer or seller. I have never and will never try to talk someone into buying or selling (as if I could). I have been aggressive in pitching a FIT when a lender tried to give my clients an adjustable rate mortgage, and I'm a persona non grata at the local credit union because of it. I do not have one single buyer right now who is in danger of losing their home. That's because I circumvented the buying frenzy to get down to brass tacks with my buyers about what they needed, what they wanted, what they could afford. If you do your job as a realtor, the first thing you make your buyer do is get qualified, and then work ALL the numbers with them. Not just about what the bank will lend, but what they can afford. Even in this market, right now, where lenders are skittish and conservative, a buyer client of mine was approved for a $120k loan. But we did her numbers, and she really can pay no more than $90k for a house. And let me tell you, I had to pound into her head her new lower price range. Am I doing my job? I think so.

Two to three years ago? I never recommended one way or the other about the climate. I did not then nor do I now have a crystal ball. I did look at the home prices in my market, and wondered how many here could actually afford these prices. Even in our little rural market where appreciation on standard housing has ambled along at 3-5% annually forEVER. We started getting a bigger bump in 05 as buyers from out of state came in, who'd sold their houses in California or Maine or Florida, and would pay whatever price for a house; they could afford it because it was about half what they sold their old house for, and was a better house. Some of them never even got an appraisal. I thought that was crazy. I can't tell you how many potential sellers I talked down from that nonsense, and how many listings I lost because of it.

Which brings me to the next point that you need to hear, and which you're probably not going to like: I learned early on in real estate that Agents do not set the price, no way, no how. Sellers, even, do NOT set the price. BUYERS set the market price of a home or piece of land. Market value is what buyers are willing and able to pay. Do pay. the sold home/price becomes a comparable, and then other listing prices are set from there. That's the system, and as flawed as it may be, it's the system. Are there agents out there who told their clients, BUY THIS!? You can make a quick buck! I'm sure. But not here in my market. Not me. Mind you, I'm not saying I've never failed at my job, but I take very seriously my charge to protect my clients.. I guess I'm a bit insulated because of my market, but you have to know that there are agents out there who do try to do the best they can. Who try to protect, try to be reasonable. My faults? I wish that I were more of an economist. I wish that I had been better able to put together the rising prices, the easy money, the corporate greed that would cause people to lose their jobs, which rendered them unable to pay their mortgages. I didn't. If I'm around for the next cycle of this, I will.

And so now, here we are, again, when people bought at the height in 05/06, paid $320k for a house, (I didn't sell it to him; he bought it from the developer!) and his neighbor lost his job and sold cheap, or the builder with a house down the street who was carrying too many notes sold a house for cost to get his 2k/month interest only loan off his debit sheet...that house becomes a comp in the market, and here we go, down. Suddenly, that $320k house comps out at $250k, and my seller is $70k upside down. They bought the house as an investment, because they too wanted to participate in this wild profit center, but had the bad luck, or the lack of vision, or lack of education or crystal ball, or the inability to not be swayed by the developer, to not pay too much. I understand that. Hey, they could afford it then and hadn't a clue where the market was going. But since then, the husband has lost his job, and they're borrowing money from dad to pay the mortgage. They've gotta sell. What will they sell for? What comparable is this house going to become?

I remember a 20/20 show last year where in Florida, some condominiums had been flipped four times before the condo was ever built. This was my biggest eye opener. Who's to blame for that?

I would wager that just as all of America has learned in this, so have realtors -- the ones who give a damn, anyway. It's the affordability factor that makes real estate. It's the economy and job security that makes or breaks real estate. We have all been subjected to failure of foresight.
1 vote Thank Flag Link Fri Feb 20, 2009
Everybody is buying, I am writing one offer a week. The smart ones know it is a great time to buy!
0 votes Thank Flag Link Thu Apr 9, 2009
Billy, don't be a hero. Let me say this about that!

Again, a fiduciary has little if any bearing in your example cited below. A material misrepresentation by a Realtor is where a fiduciary breach comes into play. The idea of a fiduciary relationship having bearing on a realtor’s ability to opine is inconsequential.

I have been quoted often. Go to UTUBE and type in "Tide Talking Stain" for example.

Here’s a speech I gave a while back –

And so, my fellow Americans: ask not what your country can do for you -
ask what you can do for your country.
1963 Administrator
0 votes Thank Flag Link Fri Apr 3, 2009
William,

I read your response with interest and it would appear as if the crux of your position is that Albuquerque is somehow magically insulated against the national housing downturn.

But, you’re right. One quarter’s of data showing a median price decrease 18.4% does not a trend make. It’s really just the beginning of the end.

And you say that prices go down by 20 percent every winter? Huh?

It’s not prices that go down during the “typical” winter sales season as you posit. In a normal market, it’s just the number of sales that decrease. In a normal market, prices do not go down by 20 percent every winter. But, this isn’t a normal market now is it?

I never said you should tell your clients not to buy; but I believe it’s your “professional” obligation to tell them what the market trends are. The obligation to your buying clients is to tell them that prices went down 20 percent last quarter and, given the outlook on employment and credit, equity evaporation is just getting started.

To ignore the data is to keep you, and your client’s, heads in the sand.

You do so at your own peril.

-John
0 votes Thank Flag Link Thu Apr 2, 2009
Statistics compiled from December 08-February 09 showing a decrease of 18.4% does not a trend make, considering that always happens during the slow winter months. But the original question is someone who bought a home 2-3 years ago not in December 08 has not scene a decrease of 18.4%.

If you continue reading in the paragraph of the statistics you quoted the median home price in Albuquerque has increased by 33.3% in 5 years with only 2008 being the only year it decreased by 6%.

So are you trying to say that in order to be fiduciary to our customers we should tell them not to buy a home in the winter because the prices drop?
0 votes Thank Flag Link Thu Apr 2, 2009
William,

You’re right. I was off with the 16.9%. It was actually down 18.4%. Don’t believe me? Here’s the Trulia market summary. Don’t let the pesky numbers get in your way of your f-e-e-l-i-n-g-s.

http://www.trulia.com/real_estate/Albuquerque-New_Mexico/mar…

So, since you didn’t address it, I assume that you’ll concede that you are nothing more than a car salesman because you wouldn’t warn a prospective buyer about the market conditions above?

As to your nit-picking point, I will concede that I haven’t personally met a doctor that gives a free consultation; but I do know they exist, especially when it comes to elective type operations like plastic surgery. Lawyers also consult for free many times – I hear ads on the radio proclaiming it all the time and I have personally experienced it.

Good luck,
-John
0 votes Thank Flag Link Thu Apr 2, 2009
@John the Bruce

No John median home prices have NOT fallen here by 16.9% they have actually increased in my area by 5.7%, when is a better time to buy a home according to you when they are going up or when they are on sale by 16.9%

I have never met a Doctor who gives a free consultation, but have you ever heard of a Realtor that charges for an office visit?
0 votes Thank Flag Link Thu Apr 2, 2009
I love taking shots myself when deserved - but Dude . . .sounding like your looking for love in the wrong place. Its all good brother, breath, relax...its all good!
0 votes Thank Flag Link Wed Apr 1, 2009
But read through most of these posts and you will find agents that say that when they represent a buyer part of their service is to negotiate for them the lowest price possible. If you do not claim that as part of the service then "no harm no foul.


Representing that you negotiate the lowest possible price for a home is not wrong it is your job as a Realtor to be looking out for the best interests of your client, negotiating the lowest price based on your experience and knowledge of the information and the houseing data is your duty as a Realtor!

John you said:

I’m paying the Realtor® for his or her expertise and that Realtor® has a fiduciary responsibly to represent my interests. I’m paying someone who represents themselves as a subject matter expert; I’m paying for that expertise.

Many paid for that expertise and have a boat-load of negative equity and heartache to show for it. What you guys are saying in the face of that is, “How was I supposed to know? I’m a Realtor®. I just sell houses!”


While in some parts of the country that may be true in our area there is no boat-load of negative equity. With the low interest rates and stable local economy in our area this is a great time to buy a house. Every Realtor cannot answer on a macro level what was done in Yuba County or other parts of California and such because we are not practicing there. You can call us actors or unprofessional or no better than car salesman but I am very glad you are not my client, but what I do have is a long list of clients that know that everyday I am working for them. Everyday I am working for myself and like every other profession, Doctor, Lawyer, Dentist, Stockbroker I have the right to get paid for my knowledge and expertise. I have been talking on my blog about the down turn in this economy since February of 2007 with the failure of the first bank in December 2006. Many of us and my colleagues here do provide a valuable service to the clients they serve and I would be happy to refer my clients to them. But my original response to Vatamin's question remains the same YES! 2-3 years ago in my area it was a good time to buy a house and it still is in my area, with the lower interest rates probably even better, but although prices are not going up 10-15% a month on the homes here that is a good thing for the new home buyer not a bad thing.
0 votes Thank Flag Link Wed Apr 1, 2009
0 votes Thank Flag Link Tue Mar 31, 2009
http://rismedia.com/2009-03-29/the-price-is-right-78-of-firs…

Haven't you RE Pro's figured out that Vatamin is just trying to trash Realtors? Look at the history of his posts, his negative attitude and how long he has been on this "Mantra".
0 votes Thank Flag Link Mon Mar 30, 2009
Alan,

Good points. Many of us stand by and watch our clients make decisions which we think are not in their best interests, even to the point of shooting themselves in the foot. A not so uncommon statement made by a Realtor to a teammate or broker might be, "I am trying to so hard to save them (client) from themselves."

Clients often dismiss our advice and make decisions, as buyers or sellers, in strategy, positioning, etc. The Realtor has a duty to obey, and a fiduciary. In an effort to uphold both duties, we advise and then follow the directives of the client.

Deb
0 votes Thank Flag Link Tue Mar 3, 2009
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
Good answer John the Bruce.
0 votes Thank Flag Link Mon Mar 2, 2009
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