Lend real estate consumers an ear
Realtor Notebook: Roadmap to Recovery
By Teresa Boardman, Tuesday, December 2, 2008.
Editor's note: Inman News has embarked on the "Roadmap to Recovery," an editorial project that seeks to engage our readers in a discussion about the future direction of the industry. Click here for more information.
There isn't a thing I can do about the economy or about the current housing market. In some parts of town it is grim, and I am not insulated from the suffering of my friends, neighbors and clients.
There will be a recovery one day, but I don't know when that day will be, and I need to continue to make a living. There is no doubt that we will see big changes in the real estate industry. It has been changing at a rapid pace during the last few years. The business model I am working under did not exist three years ago, and I have been inventing it as I go.
To me, a recovery will look like a more balanced market between buyers and sellers and a slight appreciation in home values each year. A market where entry-level buyers are not priced out of the market and credit is available to those who are creditworthy. Recovery won't look like the peak during the housing boom years.
There is someone missing from the conversation as we discuss the viability of existing business models, the impact of recent government actions on the housing market, and the use of technology in running our business and marketing our services, among other topics.
Consumers are missing from the conversation, but they are having conversations just the same. All too often we steer the real estate industry discussion toward ourselves. We have a big role to play, but buyers and sellers have a much bigger role, and the economy is the stage we all play on.
The truth is: Consumers don't care how our industry fares or how much money we make. They are more concerned with how much money they have to spend, and just want to buy or sell houses. As agents we need to listen to our clients and learn what we can do to best serve them.
Right now buyers are afraid to buy. There is buying going on, but it is as if buyers have lost site of what homeownership is all about. They are worried that buying a home is a mistake, and they are worried about job loss.
Sellers have more tools at their disposal than ever before and can sell their own home without a Realtor or with limited assistance from a Realtor. Some sellers have little or no equity in their home, making for-sale-by-owner a more attractive option than ever before.
As a Realtor, I need to look for the best ways to serve these buyers and sellers, and I need to figure out how to make a profit in the process. It has not been easy this year. Short sales and foreclosures take a lot more time and work and result in a lower commission than traditional home sales do. With more than 35 percent of the local listings in some stage of foreclosure, they are unavoidable.
Not all of my listings sold last year, and on average listings stay on the market a lot longer than they used to and are more expensive and time-consuming to service.
At the same time, business expenses and brokerage fees have gone up. Brokerages need to make a profit, but there is only so much they can take from agents. They need to listen to their customers -- the agents -- and learn how to serve them and make a profit.
Our conversations about the Road to Recovery can't be just about Realtors and brokerages and technology -- they have to be about consumers, too.
Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.
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Submitted by Lenn Harley on December 2, 2008 - 4:40am.
Right on target. The consumer is the key to recovery and, as of today, the consumer is completely absent in the scenario of the "fixers"; Treasury, HUD, Fannie, Freddie, Fed, SEC. Only the FDIC has even voiced proposals for any relief for the victims of the perfidy perpetrated by the cabal of Wall Street and the Regulators and Oversight Committees in Congress.
We have, IMO, witnessed a monumental failure of government of such scale that it will affect the national economy for decades to come.
Worse yet, it just got started.
Lenn Harley
Optomist
Submitted by Dave Grote on December 2, 2008 - 6:11am.
Yes, it will come back around. First and foremost though are"jobs" and job security. Not "just" jobs but well paying jobs.
How much does a worker have to make to support a family and a home (including keeping the property up)while living there? Where are those jobs?
We as Realtors can make big mistakes by putting our clients in their "Dream Home" on a wing and a prayer, while we take our cut. This will come back to haunt us as an industry. I believe it already is.
We will have to work for what we get now by renting, leasing, etc. to our clients to supplement our income. It will be awhile before we have people waiting at the door when we open the office, to have us assist them in buying their "dream home" and/or investment property.
Dave Grote
Concerned Realtor, Property owner, Investor
Submitted by DiAnne Arnette on December 2, 2008 - 6:47am.
Yes, the business has definitely shifted more or less in the different areas. WE always need to be listening to our clients and have their concerns and their voices in our minds. The issues here, in our area of Texas where the market is relatively strong but off from last year, is that people are worried. With high concern comes the failure to act. They are afraid if they buy now that they will see prices still drop. They are afraid if they try to sell, they will take a big loss. "We have nothing to fear but fear itself", seems like a good thing to remember right now. Let's remember that people still have a real need for housing services.
There are REALTORS getting out of the business at a fast pace and there are sellers and buyers who need and want to act. At this time, it requires that agents be the most professional, truthful, and talk with each client with the most caring attitudes and ears. I have always had my creed in place to put the client first, tell the truth, and then let them make their decisions. Whatever they need, is what I will try to give them. I find that they appreicate and still want that kind of service.
Yes, there are sellers who are trying to sell homes themselves. However, with all of the tools at their disposal, it is still a time intensive and disjointed activity that most sellers find hard to accomplish without help.
I believe that REALTORS offer a true value that is hard to replace even in a changing environment. WE must keep our servant's hearts and offer true caring services.
DiAnne Arnette
REALTOR/FORT WORTH, TEXAS
Keller-Williams Realty
Submitted by Robert A. Hulme on December 2, 2008 - 7:48am.
The consumer is the key to bringing our housing crisis to an end. But they are having a hard time as we are. The consumer is working hard to make a living, the time constraints that the consumer has in making his/her own business successful is strained, they need a Realtor to assist them in working through the transaction process now more than ever. Realtors need to understand that they have to give added value to each transaction so that consumers trust and rely on us to help them be successful as well.
Robert A. Hulme
Realtor, GRI, e-PRO
Prudential Utah Real Estate
www.UtahCountyRealEstate.us
www.UtahCountyHomes.ws
801-885-2586
Submitted by Deede Wockenfuss on December 2, 2008 - 9:23am.
Deede Wockenfuss
CybrSold Concepts
A Frugal Virtual Real Estate Company
480-248-9500
http://www.CybrSold.Com
With their loss of equity in their properties and loss in savings and stocks, buyers are not going to have that 'big' downpayment that they SHOULD have had when purchasing their current home. With homes costing only about 50% of what they were in 2005, the risk of property continuing to deteriorate is much slimmer. With this in mind, smaller downpayments by credit worthy buyers should be encouraged, with PMI insurance. Allowing these buyers to make their purchase with smaller downpayments should help our market recover.
I am not in any way suggesting that investors or non residents be allowed to put less that 20 % down. To invest in real estate, investors should at least 'break even' with their rent and expenses. This can only be accomplished with a larger down payment.
Also, the mortgage industry must 'reign in' the 'backdoor' compensation to loan officers after funding the loan. ALL compensation to brokers, including after funding compensation, should be legally on the HUD1. How many buyers would balk before closing if they knew that their loan officer was getting 20K after funding in addition to the fees that are on the HUD1? REASONABLE compensation for ALL should be encouraged and be completely above board.