Is it ethical for an agent to push their fiduciary into a home purchase by saying that, "now is the best time to buy a home"?

Asked by Charles Husen, Pleasant Hill, CA Thu Dec 9, 2010

This is something that has bugged the heck out me. It seems to have gotten worse.

I have spent the last 6 years trying to make my tax clients understand that historically home prices have gone far above historical fair value and to be very careful in the purchase of a home. As an accountant with a degree in economics I tried to explain that the numbers didn't work but if they really wanted a home just be aware of the consequences.

Some jumped into homes that are now underwater. The number one reason that they chose to purchase a home during the bubble was that they knew someone that was a real estate agent and he/she disclosed to them that "now was the best time in hsitory to purchase a home."

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139
Jack Flash, , Mount Prospect, IL
Thu Dec 9, 2010
BEST ANSWER
I suppose that depends upon intent of the agent, and what information the clients were given. First of all, the agent should be motivated only by their client's directives and wishes, and not by their desire to close a deal. But how do you know one way or the other if an agent is doing that? As for the information, if an agent gives the client factual information about historical sales, what harm has been done? And if that data supports that, given the current market conditions, the sale price they're considering is fair, would it be wrong for the agent to advise their client to buy the property? Then the property appraises out. So the mortgage company, satisfied, issues a mortgage. Who is to blame then if the property doesn't appraise out five years later?

You're absolutely right though. Home sales were, for a time, absurdly inflated. And now they're correcting. Hopefully we never return to the kind of idiotic lending practices that lead us into this mess. Corrections in the real estate market are normal. The correction we're experiencing now is as ridiculous as the run up that lead to it.
1 vote
Bill Arther, Agent, Punta Gorda, FL
Sun Dec 19, 2010
Charles, how about a different approach? Right now in southwest Florida you can buy waterfront canal homes with boating access to the Gulf of Mexico that were selling for $500k to $1million during the boom for $250k to $500k. Right now you can buy new never lived in luxury waterfront condos with fully outfitted docks that were selling for $500k and up for just $150k and up – often below the cost to build. Right now you can buy vacant lots that were selling for $60k to $100k for $6k to $10k. Right now, in Charlotte County Florida, there are more than 300 homes for sale for under $50k – many less than six years old. Right now, properties in many parts of southwest Florida along the Gulf of Mexico are listed for sale at prices not seen since the last millennium. Right now, buyers can be like kids in a candy store; whatever they want, they can find it here, and they can find it cheap. Right now, many buyers are getting financing at interest rates never before seen by their parents, grandparents, or even great grandparents. Although I would never tell anyone that any particular time was the absolute BEST time to buy, I do feel comfortable saying that RIGHT NOW IS A GOOD TIME TO BUY! I’m not an economist and I didn’t sleep at a Holiday Inn Express last night but I am a REALTOR and I am an expert in my LOCAL real estate market and like it or not I am more qualified to make that statement than you or your clients. Sorry, but that’s just the way it is here in sunny southwest Florida at this historical point in time.
4 votes
Mack McCoy, Agent, Seattle, WA
Fri Dec 10, 2010
You mean, Charles, the answer is absolutely "No, it is not ethical . . ." I, at least, read the question.

Actually, I think that posing the question, as asked, is unethical and perpetuates a myth that real estate agents talk people who otherwise don't want to buy homes into purchases, anyway.

As for "honest home valuation metrics," honesty is to be welcomed, creativity and originality to be admired, and if the tools provide value, then you are to be congratulated in their use and for any inventiveness on your part.

But I do caution the teacher: to a man with a hammer, every problem may look like a nail. If you start with the proposition that real estate agents are dishonest, and that only a moral and ethical person who happens to be an accountant with a degree in economics can save the home-buying public properly, don't be surprised if real estate agents are slow to jump into your lap, the better to hear bits of wisdom from the master.
4 votes
Bill Arther, Agent, Punta Gorda, FL
Thu Dec 16, 2010
Charles, based solely on your permutations and aggrandizations, I would venture to guess that it might be you that is different. How sad that you believe that you could only scare an agent into an honest conversation by dropping the “I'm an accountant with a degree in economics" bombshell. While I'm sure your mother is very proud, here in Florida it doesn't take an economics degree to hold an intelligent or truthful conversation.
3 votes
Mack McCoy, Agent, Seattle, WA
Thu Dec 9, 2010
- Problem is, most realtors are NOT economists or CPAs or market analysts. BUT … we ALL have opinions. What to do with those?

Even if we are, our opinions would vary. How to decide?

People come to us because they want to buy a home. We don't seek them out, we don't stop them on the street and sell them on homebuying; they don't read the blogs or go to real estate websites unless they're interested in buying.

Frankly, I see residential real estate sales as being somewhat dèclassè for an accountant with a degree in economics; and somewhat suspect as to the amount of attention given to the market in the field and on the ground.

All that is fine - residential real estate sales is home to people of varying backgrounds, from education to finance through art and architecture and building and design.

But, at the beginning of the day, when the office doors open - if you don't think that today's a good time to transact business, then maybe you should take the day off.
3 votes
Mack McCoy, Agent, Seattle, WA
Fri Dec 17, 2010
Charles, I might also suggest a read of Emily Post - the old manners are the best, and one of the gracious ways to end an evening is to allow your guests the last word.

However, I don't think we're done insulting one another!

- And in the end, whether you label yourself as an advocate and I label myself as a consultant or salesperson isn't of material concern.

That's absolutely correct. Although, I would suggest that the term, "consultant" implies that you're not so much a broker as someone who gets called in to provide advice during a transaction. For years, I was licensed as a "salesperson," recently, that license has been changed to "broker." I know that I'm not entitled to a fee for any professional services other than brokering property!

But. A while back, a fellow that I had passing acquaintance with stopped by an open house, he worked at Boeing, I asked about his daughter, and she was working on an education major but had gotten a summer job at an independent tool / hardware shop. He was really proud because she was doing a great job showing people how to use the tools properly, so that when they bought them, they'd do what they were supposed to do. I think that's similar to what many of us do with homebuyers - we find out how they want to live in a home, and work to find a home within their budget that does the best job of satisfying that need.

Also, and this will surprise Charles, we work through the numbers - we use arithmetic, or refer them to a lender - so they our buyers are prepared for the market place. It's not our call whether they should move from a $700 monthly rent to a $2700 monthly mortgage payment, but we know that we don't have a satisfied client if they get sticker shock after they've fallen in love with a house.

Still more. Many of us sell passion. Intellectually, we know the box is just a tool for living, but at least my satisfaction comes from working with passionate people who love things - who will love their house, who will love their life in the house. Ownership has its costs, and I am one person who is glad that I was able to own my own home through this bubble than be a renter.
2 votes
Alan May, Agent, Evanston, IL
Fri Dec 17, 2010
The First Law of Economists: For every economist, there exists an equal and opposite economist.
The Second Law of Economists: They’re both wrong.
2 votes
Mack McCoy, Agent, Seattle, WA
Fri Dec 17, 2010
Jim, the real estate "industry," like every sainted endeavor, deserves a certain amount of castigation here and there, but I don't think we need to be a punching bag for every self-sanctimonious blathering fool that wants to take swipes at us.

BBB is right, we sell houses, and it's a good thing to do. It's a service that's in demand, that serves the public well, and it's an honest and ethical way to earn a living.

Economists on the other hand, oh, don't get me started. If you laid them end to end they wouldn't reach a conclusion. Milton Berle: An economist is a guy who knows a thousand ways to make love, but he doesn't know any girls. And, in my last jab at the noble profession of economics, what hath modern economic theory wrought? Look around, and then hug the nearest economist in thanks.
2 votes
Bill Hays, Agent, Cardiff, AL
Thu Dec 16, 2010
I think there are some apples and oranges getting tossed into the middle of all this. CPAs to me are a professional service provider like an engineer or architect or lawyer. The provide their professional service for an hourly fee (with exception of attorneys working on contingency).

Real estate agents, if you strip away all the glamour and glitter, as has been pointed out, are sales people. As I mentioned 75 or so answers ago, there is no coincidence that the California DRE issues "Salesperson's licenses." It's a whole other spectrum from the professional services category.

So, for me, the answer to Charles' boiled down question is no, there isn't a conflict when you cut out all the smoke and mirrors and accept that Agents are sales people. Package it however you like, but in the end, if you are an agent, you are retained to sell a product. While many agents today may balk at that concept because it puts us in the same category as car sales, TV sales, etc., it's what we do. HOW some or many do it - by making useless statements designed to entice buyers to jump in the pool, is another story - but should be expected and will continue as long as people will listen as it is a sales technique. It doesn't mean that you, Charles or I have to do it or for that matter even agree with it, but it is part of the world of salesmanship.

So it absolutely makes sense that some one who has a background in a professional service, hourly fee for service structured environment would take issue with those techniques. But in the end, they are an approach that is just not going away - nor will the commission pay model simply because people aren't going to pay a dime to talk to the car sales guy, the TV sales guy, or the home sales guy. It's a payment upon sale of the product model.

And as Charles has perhaps inadvertently illustrated by the response to his question and comments, there is a large contingent that will fight to keep it exactly the way it is - sort of like longshoreman unions at the docks. For many, it is a very personal and somewhat emotional issue.

I was sort of bummed that Captain Kirk or whatever he was pulled his comments because I think they did reflect how some agents truly feel. It has been interesting seeing the different perspectives and emotions that emerged from a pretty benign question.
2 votes
James Deskins, Agent, Worthington, OH
Tue Dec 14, 2010
>>There are many people, professions and entities to blame for this mess including, but not limited to the buyers themselves. <------ mouthful

BTW, I also tried to tell buyers not to do 80/20's and interest-only loans. Buyers, if informed properly, are grow-ups, too. They made their own decisions.....
2 votes
Linda S. Cef…, Agent, Franklin, WI
Mon Dec 13, 2010
Charles,

Now that you've explained yourself a little better, I understand why you feel how you feel. In fact, I'm actually on board with you regarding some of your last statements. There are many people, professions and entities to blame for this mess including, but not limited to the buyers themselves. There are some here that will not agree with me, but I have to be true to myself and my beliefs and when I saw young buyers thinking about 80/20 splits, I did advise them correctly as I know many agents tried to no avail.

I thought of them as my own kids and advised them as though they were. I explained the difference in the fixed rate versus the variable rate loans. And every time I heard a loan processor tell my client, "you can always refinance", my hair went up on the back of my neck. I quickly explained to my clients that there is a possibility that you may not be able to refinance and if you are unable to do so, this is what you will be facing. Some listened and some didn't.

I believe that greed has become the American Green Monster and I think we are all in for a very rude awakening. However, I am not a dooms day kind of person, nor do I have that mentality. I believe there is always hope. And I think if we can get people to stop being so frightened, use common sense, don't spend above their means that just possibly we might be able to turn things around.

As an economist, you of all people are well aware of the domino affect that leads to the total crash. And I know things are much more serious than they have ever been in my 57 years, I do believe all is not lost. I am going to continue help that buyer get in a home if that is what they wish to do. And I am going to continue to make sure that they are fully aware of the type of loan they are getting and consequences of that loan. Although that is not my job, that is what I do.

I just met with my own financial adviser yesterday and he is starting a Master Mind Group for his top professionals in his network. He told me that I was one of the first on the list due to my ethic. He purchased his first home from me and told me that no one took the time to explain the process to him and that is why he chose me.

There are many, many agents out there that work as I do and it was them that I was defending.

As an economist, you will agree that if we all decide to stop making major purchases such as cars, homes, furniture etc, then the manufacturers will have to reason to manufacture the goods. Without the orders the manufacturers will have to lay off even more people.... more unemployment and so on. Be frugal, yes! Do your homework, yes! Don't spend money foolishly, yes!

But for heaven's sake, don't crawl in a closet and curl into a ball. Fighting is what made this country great and we need to fight back to keep it great.

Okay. I'm done. I'm getting off the soap box.
Web Reference:  http://www.lindacefalu.com
2 votes
Bill Hays, Agent, Cardiff, AL
Mon Dec 13, 2010
Charles -

You are so baiting Mack with the "less than normal comment" ...coming from an accountant!!!

Chances are he can't help himself and won't be able to resist. I feel his insights bring color to the trulia discussion and he usually does a good job supporting his perspectives. I commend him and others for being willing to contribute their thoughts as they expand mine.

I think you get out of this site what you are looking for. It would appear that you asked this question looking for a debate. You got it. I come here to gain perspectives and ideas beyond my own....and from you and others, I have found that as well.

Thanks for the other websites. I will check them out. I guess I look at the whole now is the time to buy thing as something similar to so many agents claiming they are the #1 top producing (fill in the blank here). You just start to ignore it, because so much of it is marketing noise.

And the noise is never going to stop....here is 2 more, beautifully unsubstantiated and recently posted on Trulia voices by agents.

"BEST TIME TO BUY! iF YOU HAVE ENOUGH CASH TO MAKE IT HAPPEN THEN GO FOR IT!!

GOOD LUCK!!"

"I do think it is a great time to buy. Will prices go down, no one knows. Interest rates are fantastic and that makes it a great time to buy."

What kind of advice is this? WORTHLESS! But it isn't really advice - it is hype.

One thing for certain - you will sell more houses with the above hype than saying it isn't a good time to buy....

I relate to what you are saying though Charles in your role as a tax advisor - a consultant of sorts. I come from a field of professional service consulting myself. I asked a similar question in October because I was so tired of hearing mindless statements about buying.

The thought that struck me here is what is the difference between which direction you push a buyer off the fence? Is it ethical to push someone into not buying something? Because you feel pretty strongly that it isn't a good time to buy....isn't that just the other side of the coin?

As a professional. we have to shift from that advisor role to a facilitator of the process. We can provide a buyer with information, but ultimately do not hold the key to their kingdom. If they want to buy, they are going to buy with you or they will go with someone else who, like a pull string doll, is saying, "NOW is the time to buy!"

For me, it's a time to save $$ and make the most of what I have.

BeachBrokerBill
DRE#01775528
2 votes
Alan May, Agent, Evanston, IL
Sat Dec 11, 2010
If you're looking for a literal answer to your question... (ahh, there's the accountant in you)... the answer is "No, it's NEVER okay for an agent (Realtor or not) to PUSH their 'client' into purchasing a home.... using ANY tactic."

We should NEVER push our clients into doing anything. It's our job to show them the facts, (inventory, pricing, comps), and allow them to arrive at their own decision. Once they've decided that they want to buy or sell, that's when we come into play, and assist them in that process.

Period.
2 votes
Joan Braunsc…, , Morris County, NJ
Sat Dec 11, 2010
Mack, the reason why I disagree with you is because RE agents have been blaring its the time to buy for years now and obviously that has not worked out in a lot of people's best interests and has been disastrous for some.

It may be great time for some to buy. Maybe not a great time for others. Lets agree that it should be looked at on a case to case basis and that agents crowing its a great time to buy for years now has not reflected well on the RE profession.

Its okay to say that interest rates are (were) at record lows. Its okay to say that its a buyer's market in most places because inventory is so high and prices have continued to come down in many places. I can't imagine anyone who is interested not knowing at this point anyway. The rest is up for speculation. For various reasons, some markets may still face high inventory and declining markets for the next year, two or even three. Unemployment and underemployment may (probably will) still be an issue. There are a lot more indicators pointing to the economy still struggling in the next several years than not and although no one would be happier than myself if I was wrong, I still think that is a realistic forecast.

Its not as if I am feeling joy that things are not all rosy and wonderful. I have a real need (who doesn't??) to pay my mortgage and put food on the table. So many people are struggling and suffering out there. There are obviously people who are doing just fine and in a great position to buy. However, there is no way that I would presume to make a statement that now is a great time to buy, generally speaking.

Like I said and you quoted "Please let just stick to being realistic, cautious, enthusiastic within reason, as knowledgeable, honest and ethical as we possibly can be."
Repeating over and over a general statement that now is the time to buy still strikes me as irresponsible.
If you choose to disagree, and obviously many do, so be it.
2 votes
Michael Young, Agent, San Francisco, CA
Fri Dec 10, 2010
Well, I guess we're sort of in agreement that the statement is irresponsible and hardly convincing.

Upon further thought, if the statement opened to further detailed insight, such as "Now is a good time to buy because Interest rates are at their lowest point in 30 years, even though the economists believe prices are going down," I don't think it's all that bad.
2 votes
Myra Gouger, Agent, Las Vegas, NV
Fri Dec 10, 2010
Realtors don't force anyone to buy a home. People choose to buy a home because they are seeking a new home. During the boom years, I had lots of people whom I sold and lots of people whom I did not sell. None of us - you included, Charles, had a crystal ball. Markets go up and markets go down and have done so since there were free markets to go up and down. Since you call yourself and economist, you might want to read some of the books that have been published since the 17th century about the rise and fall of economies. A interesting read is also the one about the Tulip growers in the 15th or 16th century Holland and the speculators who were trying to make everyone submit to their high prices. Overlay it to today's problems and substitue real estate for tulips and it sounds just like the housing bubble that burst in the US. In short, people buy and peoople sell. For everyone who got in at a high price, there is another someone who sold at a high price. One got lucky getting out; the other unlucky getting in. Timing is everything. I am guessing that you don't do the books for the ones who made all sorts of money getting out at the high!!!
2 votes
Robert Nowak, Agent, Chicago, IL
Fri Dec 10, 2010
I do believe it is entirely inappropriate to post your ethical dilemma in this forum. I know many agents that did purchase at the top of the market and are now in foreclosure. You are implying after the fact that all of us should have know we were at the top of the market and soon people would be walking away from homes they can no longer afford. This is simply not the case, the entire situation was created by lenders who made loans to people who could not afford a home. The banking industry created a demand for homes that could not be sustained.
2 votes
Mack McCoy, Agent, Seattle, WA
Thu Dec 9, 2010
Charles, I flat out don't believe you. End of story.

- The number one reason that they chose to purchase a home during the bubble was that they knew someone that was a real estate agent and he/she disclosed to them that "now was the best time in hsitory to purchase a home."

I wish we were that persuasive. We would have gotten Osama bin-Laden to surrender, and brought peace to the Middle East.

The number one reason that they chose to purchase a home, in my experience, was because they were earning good money, could obtain financing, and wanted to settle down.

They were often able to obtain financing because the financing mechanism - the free market - broke down.

But, stop. Stop right there. Nobody, not a single person in the Free World, bought a home thinking, "it doesn't seem to make any sense, but the guy in the mustard-colored jacket told me to buy, and I must obey."
2 votes
Bill Hays, Agent, Cardiff, AL
Fri Dec 17, 2010
@James - BTW, I think we are on the same page in terms of HOW we conduct ourselves. And in the end, whether you label yourself as an advocate and I label myself as a consultant or salesperson isn't of material concern.
1 vote
Bill Hays, Agent, Cardiff, AL
Fri Dec 17, 2010
@Charles - your not the victim here. And "You all" didn't think the snide comments were funny. And you can't close the thread unless you delete it. I would suggest you don't delete a thread that has been in some respects helpful to illustrate diverse viewpoints. If you want, you can not respond any further.

@James - Was stuck in traffic and had time to think about your post - need your further explanation - What does fiduciary responsibility have anything to do with whether your are a salesman or not? They would seem to be two separate issues. HOW you conduct yourself as a salesperson ties into fiduciary responsibility and agency regardless of who you represent.

I appreciate that there is a segment of real estate professionals that refuse to see themselves as sales people....we're consultants, advocates, advisors, etc. but, I think if we look into our kingdom phylum genus specification, we find that we evolved from being middlemen, optioneers, and speculators. NAR was created to eliminate abuses and create cooperation between salespersons.... Sorry James, but I have come to conclude that I must embrace my heritage.
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Fri Dec 17, 2010
Actually Charles, FYI -- in order to really close this thread , you, as the original poster, can DELETE the question, thereby closing the thread - otherwise, it remains open to further comments for as long as others care to continue commenting.........it isn't "closed" just because you say it is.

That's just how it works here.

By the way, I have not attached (myself to) you, nor have I attacked you......
1 vote
Linda S. Cef…, Agent, Franklin, WI
Fri Dec 17, 2010
Charles,

By the way you worded your original question and now your last statement, I'm getting the feeling that you are purposely inviting controversy. Could there be a little monster in you that secretly loves to argue?
1 vote
Bill Hays, Agent, Cardiff, AL
Fri Dec 17, 2010
@James - Why would an agent say something along the lines of "now is the best time to buy" if they weren't trying to attract buyers? It is all over Trulia. I can provide examples if need be.

In CA, the agent representing the seller is the "listing agent", the agent representing the buyer is the "selling agent." Both sides are in sales. I don't think it cuts both ways as you describe depending upon what side of the fence we are on. I have lost several buyers to other agents who make outlandish claims (like "I have inside information!" or " I will get you a deal!") and cater to the buyer's greed and then hose them. From my view, they out sold me, and the buyers got what they deserved for being greedy and stupid. But as has been pointed out, they are adults and they make their choice. They are not the elderly Charles has spoken of who get taken advantage of by financial predators.

I feel the distinction is HOW you sell on the buyer's side James. I don't tell people now or anytime is the time to buy - and I represent mostly buyers and do a damn good job at it. When I go through homes with clients, I show them features they might not notice and I candidly show them drawbacks they might not notice. That is my sales style. If they are interested in a home, I run numbers that most agents wouldn't show them so they have a solid idea of how they home is priced relative to the market and can do a very good job estimating where the real price point is. And to some people's disappointment, I have an economics degree and candidly, it comes in really handy to have that educational background along with many years of real estate investment experience.

"Now is the time to buy" resonates with someone who is already in mindset of thinking the same thing. A buyer's agent saying that and the concept of agency seem unrelated to me. Help me understand what you are saying.

The one thing that gets really old on these threads is statements like, "If that's what you think, even if the buyer is your client, I wouldn't send a buyer to you." You don't know me or how I conduct my business, and I don't need your referral. There is absolutely no need for those types of uneccessary comments.

@Charles - I have been waiting all day for a series of "How many Realtors does it take to screw in a lightbulb?" jokes. Have you found something better to do with your time? :-)
1 vote
James Deskins, Agent, Worthington, OH
Fri Dec 17, 2010
>>Economists have forecast 9 out of the last 5 recessions.

hahahahahaha

Guys, again, stop being so hard on Charles....you have to remember he's coming at what we do from a different angle and he's a new agent (he said so).

Charles, one thing you have to remember (as do a lot of people): folks who buy homes are adults. They're big boys and girls making big boy/girl decisions. Not only that, but because of the internet there are volumes of information out there on anything. Do Realtors sometimes influence others' decisions? Yes. But ultimately all of us as adults are responsible for our own actions. This country has gotten off-track by adopting a mentality of blaming everybody else for our own problems. And I'm not addressing situations where agents/lenders were unethical. In a standard transaction buyers make their own choices based on the information that they gather. The consequences that befall them are solely a matter of their own choices. Check out my blog page here if you want more thoughts on who is responsible for the state of real estate. I wrote a posting and just re-posted it last week.

http://therealhomebuyersadvocate.blogspot.com/2010/12/what-r…
1 vote
Bill Arther, Agent, Punta Gorda, FL
Fri Dec 17, 2010
Is it ethical for an accountant to push their clients out of a home purchase by saying that, "now is never the best time to buy a home"?
1 vote
David Cooper, Agent, Los Angeles, CA
Fri Dec 17, 2010
"As an accountant with a degree in economics" Bernie Madoff sure figured out the "fiduciary" responsibility of the accounting profession. Or was it the accountants at the SEC? You should also be proud of the accountants at Goldman Sacks.
Hey, Charles, why don't you take the "inventory" of your accounting porfession before you start making judgements on mine.

David Cooper
davidcooper@lasvegaswinner.org
1 vote
Alan May, Agent, Evanston, IL
Fri Dec 17, 2010
Economists have forecast 9 out of the last 5 recessions.
1 vote
James Deskins, Agent, Worthington, OH
Fri Dec 17, 2010
>>Milton Berle: An economist is a guy who knows a thousand ways to make love, but he doesn't know any girls.

hahahahahahah

Mack, I wish I were old and wise like you. Unfortunately, I'm neither. Keep 'em coming.
1 vote
Alan May, Agent, Evanston, IL
Thu Dec 16, 2010
Arguing without words is just fisticuffs.
1 vote
Joan Braunsc…, , Morris County, NJ
Thu Dec 16, 2010
Bill and Charles:

Charles you had to have known you were going to push buttons by posting your "question" the way you did. You state certain things as fact which I am sure you realize are anything but. Even pushy agents can only push so far and I doubt that is a very effective sales tactic for anybody and this statement: "The number one reason that they chose to purchase a home during the bubble was that they knew someone that was a real estate agent and he/she disclosed to them that "now was the best time in hsitory to purchase a home."" is just plain silly.
Just as silly as Bill: " I don’t know anyone who has ever said “now is the BEST time to buy” since unfortunately that nonsense is posted all over this site, maybe even on this thread.

The way I see it is agents have a responsibility to do right by the people who are looking to them for help in a huge purchase in their lives. Agents stating that this is the best time to buy isn't particularly responsible since I think we would all agree that who are we to say whether its best for all buyers (or even necessarily any buyers)? At the same time, as others have stated, agents simply don't have that much power over their buyers. It just makes agents look like we are only out for our self-interests.
1 vote
Joan Braunsc…, , Morris County, NJ
Thu Dec 16, 2010
Agents using contracts to convert customers to clients is their business. I just take issue with the statement that an agent won't be as professional with a customer as they will with a client.

I have never done business any other way. My buyers are customers which means when they buy a property through me, its because they choose to, not because they signed a piece of paper obligating them to. There is a certain sense of pride that comes along with that.
Regardless, anyone who comes to me to use my services will be treated the same and that includes being treated professionally. A contract doesn't make me any more or any less professional.
1 vote
James Deskins, Agent, Worthington, OH
Wed Dec 15, 2010
>> If a buyer wants counsel and wants someone to negotiate diligently on his or her behalf, then they need to go with exclusive agency agreement..

Exactly.

That being said, I think the Captain still has a bit of a skewed perspective.

Looks like the Captain's answers have disappeared....sigh....That's o.k., there was too much negativity in them anyway.
1 vote
James Deskins, Agent, Worthington, OH
Wed Dec 15, 2010
El Capitan, the difference is that you have "customers," as you keep calling them, and I have "cients." My guess is that you don't distinguish between the two and that's why you just "sell homes." Sorry, I am not on the level of a car salesmen, mostly because I don't work for sellers. My job is to provide fiduciary service to my buyer-clients and I am obligated to by state law and by my own sense of responsibility. Again, some of us assist people and others are just salespeople. Guess you are just salesperson. If it works for you, great. But if you're trying to dump a property on one of your buyer-clients you better be careful. If you only work with customers then more power to ya.
1 vote
Dan Chase, Home Buyer, Texas City, TX
Wed Dec 15, 2010
I am confused by one simple thing. It is one simple question I have no answer to.

Do most realtors and real estate agents understand they are handing out pure nonsense or are they not understanding the true situation in real estate when they make such statements?

The answers to this question is bad on both sides.

1 If the agent truly does not know the truth how can they be trusted to help me?

2 If the agent is so filled with deceptive marketing gimmicks how can I trust them to ever be honest?

When I see the same foolish statements over and over again I am questioning if they are not understanding the truth or are just using marketing skills to lie often hoping for a commission from that known incorrect statement.

Is this truly a question about being ethical, or about agents being ignorant, or about them being liars?
1 vote
Greg Lyles, , Atlanta, GA
Wed Dec 15, 2010
Weird. My answer just disappeared. Anyway, Captain, it is not about you and what you want - it's about the clients and their wants and needs. And if it means telling a client not to buy and losing a commission, then so be it. It's good karma - it will come back to you.

If you are not doing well in this business, we can certainly understand and empathize. It's a tough business and tougher times, but sacrificing your integrity and reputation for the sake of a dollar may help you realize short-term income, but it will greatly diminish your long-term earnings potential. And that's from a broker who's sold about $430 million in his 27-year career.
Web Reference:  http://conradlyles.com
1 vote
Lisa Cannata, Agent, Falmouth, MA
Wed Dec 15, 2010
Well you know the old saying about opinions. The truth is that's all it is. How could we REALLY know when the best time to buy a home is. The funny thing is I get asked that question over and over again. I could easily say now is the best time to buy a home. However the real answer is I do not have crystal ball, I don't know where the bottom is and won't until after we've been there and I can only say that prices are good and interest rates are historically low.

So ethical wrong doing? I think not. Overly opinionated? Maybe. It's a tough spot to be in as buyers look to us for advice and while we know the market today and what's right for now I don't think it's fair to hold us over a barrell for changes in the market that will occur in the future. There is no way for Realtors or anyone else in the world to know or have this information.
1 vote
Greg Lyles, , Atlanta, GA
Wed Dec 15, 2010
Seriously. Let's keep the conversation civil. If you don't agree, that's fine. Everyone is entitled to their opinion, but the name calling is out of line.

Remember, the public reads this stuff too. Is that how you want to be perceived?
Web Reference:  http://conradlyles.com
1 vote
Maggie Weiss…, Agent, Seattle, WA
Wed Dec 15, 2010
In my opinion, the ethical (and reasonable) responsibility of the realtor is to educate their client on market conditions in the area that they are looking. That means, historical prices, market swings, interest rates, etc. It is the responsibility of the buyer to look at the information and make their own financial decision. I don't push and I do not get in between the potential buyer and the lender. That is their business and a decision they will have to make together.
1 vote
Bill Hays, Agent, Cardiff, AL
Sun Dec 12, 2010
Adding fuel to Charles' question on ethics....

http://www.trulia.com/blog/BeachBrokerBill/2010/12/if_the_ma…
1 vote
Mack McCoy, Agent, Seattle, WA
Sat Dec 11, 2010
- Please let just stick to being realistic, cautious, enthusiastic within reason, as knowledgeable, honest and ethical as we possibly can be.

Joan, that doesn't preclude blaring that Now Is A Great Time To Buy.

I'm not sorry that we're not going to agree on this, but I think that this is a good time to buy, and it would be unrealistic, unenthusiastic, ignorant, dishonest, and unethical to not announce it to anyone within earshot.

And I still maintain that if you think this is a bad time to buy, it is as dishonest and unethical to work with buyers as it is for a lung surgeon to host cigar nights.

I know your burning desire on this issue is for the real estate industry and its practitioners to say that, maybe buyers should wait. Well, maybe they should - I'm not willing to insure them if the market goes against them. But I do think that in that case, our sellers - the people that we are in contract with to sell their homes and have an obligation to avoid actions detrimental to them, should be offered the option of re-listing with a more enthusiastic broker.
1 vote
Joan Braunsc…, , Morris County, NJ
Fri Dec 10, 2010
Exactly Linda. That's my point. Why the heck do agents repeat the "BUY NOW!" over and over? What is the point of that?
1 vote
Joan Braunsc…, , Morris County, NJ
Fri Dec 10, 2010
Michael, as accurate as your point is, why do agents keep on saying "NOW IS THE TIME TO BUY!"?

Of course buyers aren't going to flock to their local RE offices and bang down the doors demanding to buy now based on that sales pitch.

So, why do so many keep insisting on repeating it over and over? What's the point?
1 vote
Michael Young, Agent, San Francisco, CA
Fri Dec 10, 2010
I'm going to try something...

"Hello All Potential Buyers! NOW IS THE TIME TO BUY!!"

Charles: I'll let you know how many inquiries I receive and how many of them buy a house through me.
1 vote
Greg Lyles, , Atlanta, GA
Fri Dec 10, 2010
Wait another 2-3 years to buy. In the meantime, see my post at http://www.trulia.com/voices/Home_Buying/Is_NOW_really_the_t…

and again, do not trust the opinion of anyone on this site, including me, until you have done your own research and can substantiate what you are being told.
Web Reference:  http://conradlyles.com
1 vote
Vallery & Pa…, Agent, Federal Way, WA
Fri Dec 10, 2010
Charles,
I think it is a valid question. I would like to think that I had that much power. I can only affect the people that I am working with and not an entire nation. We, as Realtors, only work with local buyers. I can only tell the people that I am working with what the current market looks like and what the home they want to buy is currently worth. I have no idea what their home is going to be worth next year or five years from now. I can only show them the historical data and they have to make their own decision.
Nobody from CBS or NBC called me to ask me if it was a good time to buy, but they seemed to report that it was. My local news here in Seattle said that the local market was in a steep downfall because prices were .6% down from the previous year. Nobody in Washington DC called me to ask if they should do the first time home buyers credit. Looking at the historical data that was probably one of the worst things that could have happened. I can send you the graphs if you like. Foreclosures are only ten percent of the current market here but they seem to be drivning the other 90%. I think it is because our nation media likes to spread news about the 10% and not about the 90%. All I can say is that historically Real Estate has out performed the stock market
1 vote
David Jaffe, Agent, Arlington Heights, IL
Fri Dec 10, 2010
It is up to each individual to make the decision to purchase a home. It is important to remember for most buyers this is a long term investment (more that 5-7 years). It is up to the Buyer to do their homework and decide if the time is right to buy, and if the equity they will earn when the market turns around.

As a real estate professional, I offer guidance to my clients "not pressure into buying". You comments make our industry sound we are in it for a fast buck... not true.

David Jaffe-SRES, CDPE
Realtor-Coldwell Banker
1 vote
Linda S. Cef…, Agent, Franklin, WI
Fri Dec 10, 2010
Charles,

If your question had ended there, I would have answered differently. The fact that you ended you question/comments with, "The number one reason that they chose to purchase a home during the bubble was that they knew someone that was a real estate agent and he/she disclosed to them that "now was the best time in history to purchase a home." is what I addressed.

As for your question without the comment, the answer is absolutely not. It is unethical to push a buyer into a home for any reason and it is not up to us to determine for that individual whether or not it is the best time to buy. But I believe if you read through the many threads posted by myself and other agents, you will find that no on is advocating that.
1 vote
Bob Lilley, Agent, Pleasant Hill, CA
Fri Dec 10, 2010
Real Estate is unusual in that it is more than just a financial investment - it is also a place to live your life.

If you believe that real estate prices are way too high and may come down more than they already have - and I wish you luck with that argument - then clearly the financial incentives are not there for you.

As a tax person, you are certainly aware that a real estate purchase investment unusally comes with substantial income tax deductions and an investment component that you do not have with renting.

Obviously, a potential buyer should be cautious when they hear that "we are at the bottom of the market" or "prices are sure to go up". But caution is also advised when told "prices are way too high" and "we are headed for another crash".

Real estate is an investment that tends to performs over time. In the past 50 years, that time has included the brink of nuclear war, a protracted war in Southeast Asia, an oil embargo, the impeachment of two Presidents, and two very serious financial crises.

Advise is cheap on both sides of this argument and usually worth every penny. The truth is that no one knows if we are at the bottom or the top of any market.

Any investment comes with risk - that's why it is called "an investment". But investing in Real Estate has shown to be, over time, much better than a stack of rent receipts.
1 vote
Linda S. Cef…, Agent, Franklin, WI
Fri Dec 10, 2010
Very similar to another ongoing thread. Mr. Husen, I respect that you have a concern for your clients beyond getting "the paycheck". But, really...........what you are saying is that it is the real estate agents fault that they are under water? I cannot think of a more ridiculous statement.

As I believe Mack has stated several times, buyers come to us to find them a home. It is not our responsibility to make sure they can afford it. They are adults and should do their homework before making such a huge purchase. It is amazing to me how many of these adults don't even know how to balance a check book let alone understand what they are signing.

Which is why I always take the time to make sure that they fully understand before jumping in. I have taken the time and my own money to show people how to budget their money - something that should be taught in school!!! And in some cases, I have had the displeasure of saying, "I'm sorry, but you don't have ENOUGH MONEY RIGHT NOW." Most of those people have stayed on budget; paid down their debt; cleaned up their credit and so on.

For me, being a real estate agent is about far more than collecting a pay check. It is truly about helping the person who longs to own a home get that home eventually, regardless of how long it takes.

And lastly, you stated, "Some jumped into homes that are now underwater." I wonder who is to blame for that? I worked with buyers who chose to IGNORE my advice and go forward with creative financing that I knew would get them in trouble. They did it because they didn't want to wait, not because an agent talked them into it.

Please, let's stop this blaming of real estate agents for the mess that people are in. Don't you think the buyers had some accountability?
1 vote
Tim Moore, Agent, Kitty Hawk, NC
Fri Dec 10, 2010
I think Realtors are a lot like a cab driver. You just get in his cab and ask where is a good place to eat, he gives you his opinion and you take it for what it is worth because he may have more knowledge than you do about that since you assume he knows the local area more than you do - that's why you ask. If you ask him to take you to The Hilton to eat and he knows full well that it is a mediocre place he still takes you there because you hired him to do it. We as Realtors are something like that. I am asked about the buying potential and who the hell am I to say "It is an awful time to be buying, are you crazy"? I would never think to do that because I might be wrong, would any of you? Being a Realtor for 24 years has allowed me to see more than one or two cycles in the values of homes in my market area, does that give me the right to form an educated opinion? I think it does. If I ask a stock broker his opinion do I expect him to give me his best guess? Yes I do. Do I know for sure it will be correct? No I don't and I feel the buying and selling public should feel the same when they ask me my opinion. Ask me my opinion and I will tell you based on my knowledge and experience, not because I need a new car this year. If a buyer asks me to get him that house, I do it the best I can with interests in mind.
1 vote
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