Special to the Deadline Newsroom
© 2007 By Dena Kouremetis
As a regular media contributor to real estate issues for consumer consumption, I know I don't have to go into statistics to make my point on this topic. Numbers about the real estate "depression" are screaming off every page of every newspaper across the U.S.
As a member of both the press and the real estate industries, however, I feel I must express myself regarding the accusation that it's the media that is breaking the backs of the average Realtor.
Wherever I go I hear agents lamenting the "bad press" being doled out that is making consumers terrified of buying or selling homes until the "slump" is over.
I wish everyone would just take a moment to ponder a few things.
The press reports the news -- which means anything NEW happening in any industry. If homes in Indiana, for example, have not suffered through foreclosures or depreciation from the housing and lending debaucles, that means that it's business as usual in Indiana and no news is good news. Why should it be reported?
Real estate professionals may be held just as responsibile for the current sub-prime fiasco as lenders, since their role is to be an advisor as well as a representative to their clients. Why?
• Real estate consultants are the ones who must at all costs, point out the small print to their clients that the lender may gloss over in explanations.
• Real estate consultants are the ones who can advise and disclose, by questioning their clients, if they are about to get into an investment that is way over their heads.
• Real estate consultants are the ones who should be painting worst-case scenarios for an adjustable rate loan's monthly payments. What if the house DOESN"T appreciate? What if the borrower's income DOESN"T go up? What if their credit scores are not enough to permit them to refinance when they have to?
I may be thrown under the bus by a lot of my peers for writing a piece like this, but it's like the sound of fingernails scratching a chalkboard to me to continually hear people maligning the press for what is happening out there. Real estate professionals gleefully collected milions of dollars in commissions in 2004-2005, when multiple offers were rampant in many areas. But when they knew their clients could barely afford the monthly payments on these homes, I really wonder how much counsel they offered to the people who made those commissions possible.
At the time, the real estate industry was clamoring for creative financing so that people who made average incomes in places like the San Francisco Bay Area could buy million-dollar-plus homes, obviously betting on fast apprecation, refinancing when they had to, or turning it for a quick profit. Those same consumers, whose incomes may not have increased significantly since then, are finding that their mortgage's fixed-rate periods have ended or are ending soon and something must be done in order to keep their homes.
True, many of the larger, more corporate real estate companies used "market conditions advisories" when presenting paperwork to their clients, but I wonder how seriously their agents took these important disclosures when advising their clients.
No one has a crystal ball, of course. As Realtors, we must lay things out before our trusting clients and let them make their own decisions. Housing is still one of the best investments around, since God won't be making any more land. And it's a tangible investment that -- no matter what -- you can live in it as long as you can make the payments. Like the stock market, however, this is an investment that can fluctuate in value. Any stockbroker would tell you to diversify and save money for a rainy day,
So to all those real estate professionals who dutifully looked after the best interests of their clients, then, I salute you. And for those who rode the last big wave without making sure people knew what they were getting into, I hope this is a lesson that is difficult to forget.
Just stop blaming the press for what you may have helped to create.
• "Media Bashing and the Real Estate Market" Copyright 2007 is reprinted here with permission from Dena Kouremetis.
• Dena Kouremetis is a licensed California real estate broker, a homebuilder sales trainer, author and columnist.
• Hear Kouremetis' "Uncharted Waters: Navigating the Purchase of a New Production Home," an educational podcast series about buying a newly constructed home.
• Media Bashing Rebutted
• Housing Mess Not Media Made
• Savvy Consumers Don't Shoot The Messenger
Editorial Content Is Intellectual Property • Unauthorized Use Is A Federal Crime
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