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I myself am a Realtor, but have been noticing an increasing amount of hostility directed towards me in emails from clients who have asked for my services in assisting them locate property. I have tried to overlook this as a sign of people taking their frustrations out on others due to the deplorable economy we are now faced with. However, it is really depleting my self esteem. I of course would never show property to these folks for fear of placing myself in further danger, just curious, any other Realtors out there experiencing this, and if so, how are you dealing with the hostility from those you are or were trying to assist?
Possibly your frustration as a Buyer could solve the riddle as to why some clients are now backing out of purchasing real estate, and instead choose to take their frustrations on those who are trying to assist.
Agreed, which is why I was inquiring for more details on the matter.
First, let me say that there's no excuse for anyone taking their negative feelings out on another, especially a professional. Not everyone is civil.
But I will admit, I am an angry buyer. I am frustrated, and considering backing out of the process altogether. I am politely honest with my agent about this, yet we continue to creep forward in the buying process, with this understanding.
I could write a page about it (I did, actually, but deleted it).. but I'll sum it up by saying: Considering the price changes I'm seeing, it doesn't seem like sellers & agents appreciate how risky it is for first-time buyers to buy property right now, at the early stages of a global recession, at a time when no one understands how new national lending standards will affect prices across the board.
I see empty homes on the market for 300 and 400 days without price adjustments. I see homes come on the market and sit for 30... 60... 120 days. No price changes. They expire, they are relisted at the same price. So it is frustrating, knowing good and well that the market will not bear these prices. That represents a risk to the buyer.
How do agents come into play?
I think there's the perception that that they played a key role in building the bubble, and profited on what became the financial crisis. Just as important is the perception that they contribute to the fantasy of the V-shaped housing recovery, any day now, any day now. Plus I don't think it is too harsh to say that y'all's national organization, the NAR, is out of control. Despite all this, though, I recognize the value of a good realtor, and I decided that it was important to use one.
Thank you for your input. Many people blame Realtors in general for building the bubble, however, it was the market itself that did so, not Realtors. Back in the days when demand exceeded supply, there were bidding wars further driving up prices. Builders then began overbuilding, based on what they perceived as an endless supply of buyers. The market has now corrected itself, or is in the process of doing so. Supply is now exceeding demand, which is bringing prices down. Also we now have foreclosures entering the picture, further driving down prices, and unfortunately home values for the rest of the neighborhood. I don't think it is fair to blame Realtors for either a Buyers Market or a Sellers market, a market has it's own characteristics, brought about by many factors.
As for your frustration with housing prices, please keep in mind that everything is negotiable. If you find a home and truly love it, then go for it. Have your Realtor do a CMA, that will give you a clear picture of the fair market value of the home and the community. Have you been pre-qualified yet? Are you having trouble obtaining a mortgage, is this adding to your frustration? There are many good mortgage products out there at the moment, albeit one's credit, income and work history will determine which one is right for you. Interest rates are at their lowest, so now really is the best of times to buy. I still say that buying is better than renting over the long haul, and my biggest fear is for those who rent from independent owners, may be paying their rent, but is the owner paying their mortgage? I have been reading horror stories of renters being evicted, not because they haven't been paying rent, but because the owner defaulted on the mortgage, and unfortunately there is no oversight to prevent this.
I have lived throughout the country, and my opinion is not just based on this area, it is an overview. However, we should be thankful that NC has not fallen like other states in property values and foreclosures, and is still viewed by the Mortgage industry as a Class 1 ranking, meaning it is a far easier state to obtain a mortgage in.
At the moment there is so much out of our control as Realtors, we are taking the blame for things we did not create, and if one were to look at the big picture, I would place the majority of blame on the mortgage companies and the lack of regulation in this industry. It is frightening to think these folks handle all this money, with very little oversight. Now that they are being studied with more scrutiny, we are hearing how mortgages were packaged for investors, and some people can't even get loan modifications, because their mortgages have been distributed and re-distributed. Gone are the days when you get a mortgage, and it stays with the original company. We were told that that was the norm and not to worry. And how about pre-payment penalties? This is just another way for the mortgage and banks to make money.
So my friend, I am glad to hear you have enlisted the guidance of a Realtor, but I am asking that you look at the big picture.
What is your beef with the NAR? I too am not thrilled with this organization, and am required to pay dues with very little representation.
How would you suggest we improve this industry?
Thank you for your input. Many people blame Realtors in general for building the bubble, however, it was the market itself that did so, not Realtors. Back in the days when demand exceeded supply, there were bidding wars further driving up prices. Builders then began overbuilding, based on what they perceived as an endless supply of buyers. The market has now corrected itself, or is in the process of doing so. Supply is now exceeding demand, which is bringing prices down. Also we now have foreclosures entering the picture, further driving down prices, and unfortunately home values for the rest of the neighborhood. I don't think it is fair to blame Realtors for either a Buyers Market or a Sellers market, a market has it's own characteristics, brought about by many factors.
It is interesting that you call falling prices "unfortunate". Most realtors have this same perspective that falling prices are "bad', and rising prices are "good". Doesn't that show an industry-wide bias toward seller's interests? I know that it doesn't inspire confidence in me as a FTHB, it makes me concerned that these prices are like a "wish list", not what the market will bear. The fact that homes aren't selling just reinforces my concerns.
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As for your frustration with housing prices, please keep in mind that everything is negotiable. If you find a home and truly love it, then go for it. Have your Realtor do a CMA, that will give you a clear picture of the fair market value of the home and the community.
Isn't a CMA an analysis of comparable sales?
How does a CMA adjust to sudden, drastic shifts in demand? Say, $30 trillion lost in global stock markets, 1.9 million jobs lost, along with a change in lending standards and a near-collapse of our financial system?
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Have you been pre-qualified yet? Are you having trouble obtaining a mortgage, is this adding to your frustration? There are many good mortgage products out there at the moment, albeit one's credit, income and work history will determine which one is right for you.
I have no trouble with my mortgage. They are willing to lend me far more than I want to borrow, and with unbelievable terms.
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So my friend, I am glad to hear you have enlisted the guidance of a Realtor, but I am asking that you look at the big picture.
How so?
I feel that it is me who is looking at the big picture. I don't think I should pay for the artificial appreciation of 2001-2007. I'm happy to substitute numbers which extrapolate 4% annual appreciation from older, 1970's-2000 prices.
My contention is that it is agents do not look at the big picture. Just because prices are down 5% or maybe 10% since their peak, that means it is a good time to buy? Didn't the bubble inflate them by more like 25-50%?
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What is your beef with the NAR? I too am not thrilled with this organization, and am required to pay dues with very little representation.
How would you suggest we improve this industry?
I have several beefs with the NAR. Basically they cannot be trusted. Others can explain it better than I can:
And on a local level, our regional realtor's association pushes for regulations which further degrade local water quality. Coastal development rules, coastal stormwater rules, pressuring to overuse sewer lines.. it is a long story.
I think your problem is the fact that you seem to want a 50% price drop overnight. Yes, the real estate bubble ran prices up pretty quickly, but it wasn't over just one year - it was several. It takes at least that long, if not longer, for prices to come back down. You simply cannot rationally expect that the majority of home sellers can afford to come to the closing table with a check for $100,000 to pay off their mortgage because the value has crashed. People in that situation who HAVE to sell are more than likely going to be forced into a short sale (which are dicey as we all know) or are simply foreclosed on. That's just the reality -- you aren't going to find many sellers who can afford to sell at the price that you think they should. Real estate is a 2-way street, and simply "dropping the price" isn't cut and dry. Obviously this situation is bad for both sides - sellers can't sell for the prices that buyers want to pay, and buyers won't pay the prices sellers can afford to sell for. I don't know what the answer is.
I think your problem is the fact that you seem to want a 50% price drop overnight. Yes, the real estate bubble ran prices up pretty quickly, but it wasn't over just one year - it was several. It takes at least that long, if not longer, for prices to come back down.
50%? 15% would be extremely optimistic. We've seen 5% so far this year.
The Wilmington MLS says that prices went up 13% in 2004, and 20% in 2005. Every other year of the 2000's had reasonable appreciation of 5% or less.
You're right, though, I expect a long stagnation of sales, where only motivated buyers are willing to negotiate.
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You simply cannot rationally expect that the majority of home sellers can afford to come to the closing table with a check for $100,000 to pay off their mortgage because the value has crashed. People in that situation who HAVE to sell are more than likely going to be forced into a short sale (which are dicey as we all know) or are simply foreclosed on. That's just the reality -- you aren't going to find many sellers who can afford to sell at the price that you think they should. Real estate is a 2-way street, and simply "dropping the price" isn't cut and dry. Obviously this situation is bad for both sides - sellers can't sell for the prices that buyers want to pay, and buyers won't pay the prices sellers can afford to sell for. I don't know what the answer is.
The last thing I want is a seller who needs to bring money to the table. I don't even mess with them.
Most houses I'm considering were last sold in the 1960's or 1970's. A handful were last sold in the 1980's and 1990's. A few are flipped houses, bought somewhat recently in a foreclosure, for $125k-ish. My prospects are mostly empty houses, which had mortgages of $25,000 - $75,000, and are paid off.
If these sellers, as a group, don't have flexibility in price, then nobody does.
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