Blaming agents for home-price run-up
Letter to the Editor
By Inman News, Wednesday, January 7, 2009.Re: 'Real estate wake-up call' (Jan. 7)
Dear Editor:
All that I can say is WOW! That article should be mandatory reading for anyone who wonders how the real estate market "tanked." I can't believe that a broker/owner would actually write something like that, and be proud.
I especially like the paragraph that starts "During the tween years, preparing a price opinion involved taking the last sale price and adding a big, random number …" and "getting our buyer clients a 'good deal' involved simply getting them the home -- writing the offer with the biggest number at the top."
Imagine if that were the philosophy of everyone in sales, your next car would be more expensive than the one that just drove off the lot as you drove up. Your next meal would be a buck more than the guy sitting next to you is paying, and on and on.
I always thought the job of a real estate agent was to counsel the client as to what the realistic value of a specific property should be, not contribute to the artificial run-up on property values.
Apparently some agents and brokers cared only about the bottom line -- theirs! These same agents and brokers now wonder why the public has negative opinion of "real estate professionals."
I saw it many times during those "tween years": agents driving up the price of a home to feed their bottom line without regard for hard statistics to back their position as to why a home is now worth 10-25 percent more than it was a week or month ago. I hope Kris Berg doesn't have any regrets when she sees her former clients going into foreclosure or unable to sell their "over"-valued home.
Nick Chucales
NMC Consultants
Westerville, Ohio
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Submitted by Emmanuel Scanlan on January 7, 2009 - 1:35pm.
Nick,
I read the article a slightly different way. As I read the article Ms. Berg was actually being highly critical of RE Agents operating during the "tween years". It appears that she basically stated that during 2003 - 2005 many veteran Agents may have forgotten why they were there and another million new Agents joined with the expectation of making money in their sleep.
She appears to be stating that with these current times the good RE Agents, whether veteran or new, will last through the turmoil but must get back to the reality of what being a RE Agent actually means. I found this a very refreshing view from a RE Agent.
Emmanuel Scanlan
PS Inspection & Property Services LLC
www.psinspection.com
TREC License #7593
Knowledge is power, but sharing knowledge brings peace!
Submitted by Mark Owens on January 7, 2009 - 2:12pm.
Yo Nick...Kris Berg's Article was outstanding.
The market during the boom was THE MARKET!!!
The Market is the Market is the Market is the Market.
The agents obligation is to get the buyer into the home at Market Value. If there are multiple competing offers, obviously market value was higher than asking price. Plus, The bank is going to say if it is worth it or not. Its easy to look back and say woops, but at the time the euphoria was what it was.
Realistically speaking if you made a living selling homes back in 2004 and 2005 I can't imagine you were running around telling your buyers..."Don't buy that one..Don't buy that one ...Don't buy that one ...Don't buy that one ...Don't buy that one...Gee how many homes would you have sold?
Submitted by Alex Zima on January 8, 2009 - 1:33pm.
Whoa! The key to rising prices was easy money as a result of the deregulation of the mortgage industry and loose appraisal standards. This allowed the market to expand into a bubble. No one camp engineered this, but as mortgages were approved easily, people flooded into the market artificially inflating values. The real villain is deregulation of lending. Agents were following the upward trend like everyone else. No one realized the foundation was as shaky as it was and the far-reaching global impacts it would have when loans were bundled into securities.
Submitted by Joanne Hodge on March 16, 2009 - 4:44pm.
The Market IS RIGHT.
And don't forget the sellers who insisted on listing their home $10,000 or $20,000 higher than the house next door.
In many cases, they got their price. There were several times I ran comps and counselled sellers to list at what the last house sold for, but they insisted on asking for more. You know what, they got it, too! And the property appraised at that high price.
Don't forget that many buyers got turned down a number of times when they made an offer at or below the asking price or even at a little above the asking price.
Many many factors drove this crazy market of 2004/2005.