It seems that some consumers believe Realtors created the current housing mess by selling too many homes.

It isn’t quite that simple, but they state that we sold too many homes for too high a price and now the buyers are stuck with homes that they can’t pay for and that are declining in value.

It seems that some consumers believe Realtors created the current housing mess by selling too many homes.

It isn’t quite that simple, but they state that we sold too many homes for too high a price and now the buyers are stuck with homes that they can’t pay for and that are declining in value.

True, I have sold some homes and I even go out of my way to meet people who want to buy homes. I look for people who want to sell them, too. It is very rare to meet a seller who wants to list a home for less than the price I recommend, but it has happened.

It never occurred to me that I could be doing something wrong or, worse yet, something that might hurt someone else. I did help people purchase homes that later declined in value. I also helped people buy homes that they could not afford. Someone helped me buy a home in 1989 that is worth less today than it was in 2005. I wish I could remember her name. Did she sell it to me?

What consumers are not seeing and I am not reading about are the Realtors who are going through personal foreclosures. I know a few agents who cannot stay current on their mortgage payments and some that are in foreclosure. Others want to sell but they can’t because they owe more on the home that they could sell it for. Doesn’t that sound familiar?

Realtors are faced with a kind of triple whammy on this. They bought homes during the peak when they were making enough money to afford them. That is why it was a peak: because many people bought homes at the same time, including Realtors. Then home sales went down, followed by a decline in home prices.

Let me show the math for a Realtor who bought a home during the peak:

Home value minus "X" percent plus sales volume down by "X" percent (less income due to fewer sales) plus average commissions down by "X" percent (less income due to lower home prices) equals "Ouch!"

So maybe my math doesn’t make sense, but I am trying to make a point here. Realtors are not immune from the ups and downs of the housing market, and they buy houses, too, and usually represent themselves.

There aren’t any numbers on how many Realtors are facing foreclosure. If I were to guess — which would be just wrong, but I’ll guess anyway — I would say that it is likely that as a group Realtors have at least the same loan default rate as the rest of the population.

As long as I am guessing, I’ll suggest that it could be higher than that of the general population because it used to be so dang easy for us to buy homes and we had so many opportunities to do so. Most of us like real estate.

Most Realtors are not going to mention that they paid too much for a house and that they were tricked into buying it by the listing agents’ marketing materials and the National Association of Realtors’ proclamations that it is always a good time to buy real estate. Who would want to work with an agent like that?

Besides, they didn’t pay too much in 2005 — they owe too much on them in 2008. There is a difference. Why did so many people, including Realtors, buy homes in 2005? Who sold all of those Realtors those homes that they paid too much for?

Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.

***

What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×