It is hard to imagine or understand, but not everyone trusts real estate agents or Realtors. According to a Harris poll, 20 percent don’t trust us at all and only 7 percent trust us completely.
As an industry we shoot ourselves in the foot when it comes to being trustworthy. Examples include the press releases and other information from the National Association of Realtors (NAR). NAR is a huge trade association and exists to promote our industry. As such, NAR likes to put a positive spin on buying real estate.
In the land of NAR it is always a great time to buy real estate. The truth is it isn’t always a good time to buy real estate, not every market is the same, and not everyone who can buy real estate should be buying real estate. In recent months NAR has started telling consumers that real estate is local, which is true.
Some real estate companies and agents like to make general statements, which are misleading and breed distrust. One company had signs up all over town advising buyers not to miss out on this great buyer’s market. It sounded like a kind of cheap salesman’s trick — they were saying, "Hurry and buy now before they are gone." They also give their agents seasonal marketing materials with messages for every season outlining why it is the best time to buy or sell real estate.
Instead of just publishing numbers and statistics, as an industry we like to put a special spin and paint a rosy picture of the housing market. The general public sees right through it. We are treating them like idiots when we take the numbers and weave them into a fairy tale that ends with: They bought real estate and lived happily ever after.
We should be saying that real estate has appreciated but past performance is no guarantee of future appreciation, and that there are tax advantages to home ownership, emotional advantages, and we all need a place to live. When I am asked if it is a good time to buy, my answer is and always has been the same: It depends.
For people like me, it is a good time to buy and sell real estate. Owning a home that is almost paid for has advantages. It could be sold quickly, because it could be priced for 2008, not 2005. The proceeds could be used to buy another home, and as a Realtor I know where the bargains are and how to negotiate a deal.
For my neighbors two doors down who bought a townhouse three years ago, it is a bad time to buy real estate. They would take a loss if they sold, as it is worth less now than when they bought it and townhouses are the hardest type of housing to sell in my market. I would advise them not to sell, and if they have to leave for some reason they should consider renting it out.
As an industry, when we make general statements to promote sales we are not promoting sales — we are instead breeding distrust. Do we expect consumers to trust us when the foreclosure rate has gone through the ceiling and we are still telling buyers that now is a good time to buy? Apparently, for some who bought it the last couple of years it was not such a good time to buy, yet we still repeat the same old message. It might really be a good time to buy real estate, but it depends.
Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog. Boardman will speak at Real Estate Connect in San Francisco, July 23-25, 2008. Register today.
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