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The worst of 2007: a buyer's agent's view

Posted by Rona Fischman  December 10, 2007 05:36 PM

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As a buyer's agent, what was the worst part of 2007?

The ongoing spin from my trade association, NAR.

The exploding number of "buyer's agents" out there who don't get it about conflicts of interest.

Staging and over-staging of homes for sale.

But the worst of the worst was the flip-side of what was best:

Falling prices and the death of subprime mortgages brought financial woes to many people. Those who over-reached -- whether of their own volition or by being encouraged by someone out to make a buck -- were hurt. Since the beginning of the run-up, mistakes washed out in the escalating market; if someone overpaid by 10 percent, they were even or ahead a year later. When the market went down in 2006, owners fell behind by what they overpaid plus 5 percent, or so, each year. If they bought with an ARM and/or at subprime rate, their rate adjusted up, their place is worth less, and they could not refinance it. In many cases, they also could not sell without taking a loss. There are people losing their homes and their credit. Those hurt were disproportionally working poor and working class, minorities and women.

The slow-down in demand has been hard on many people, including the real estate and mortgage industries. There are good people, as well as bad, out of work.

Those most badly hurt are those who were just making it. If you are inclined to help at this time of year, consider an anti-poverty agency. I am particularly fond of CAAS, which does tenant advocacy and eviction prevention. Think about it; there are always people worse off than you are!

So, what else fits the category “Worst of 2007?”

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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6 comments so far...
  1. Here's something:

    Sales fall through because the SELLER doesn't have their financing in place.

    We're trying to figure out what to do currently with a closing that was supposed to happen tomorrow that is now postponed or cancled while the seller figures out how to pay the bank the $56,000 they owe.

    Posted by shawnna December 12, 07 01:18 PM
  1. Yes, Shawna is right. I missed that!
    The presence of short sales is one of the worst things in 2007. Sellers not only lost their down payments and costs, but needed to bring money in order to "get out" of their home. Short sales are tragic for the seller's finances, but can also cause problems for the buyers of the home.

    Lessons for the future
    For owners:
    Don't borrow long-term against the equity of your home. Home equity loans were designed to help people over short-term cash-flow issues or for improvements. People have been using them as spending cash or to clear credit card debt. I know there are some short sales because of low down payment and adjustable rate mortgages as well; we may see more of these as time goes by.

    For buyers:
    Don't buy with a small down-payment and an adjustable rate loan. We are in a declining market, this is risky cash management.

    If you are buying a distressed property, instruct your attorney to check on the cost of the "pay off." Your attorney can clue the seller's attorney in, and hopefully, the seller will be ready to close on time.

    Posted by Rona December 12, 07 02:26 PM
  1. Rona,

    By calling the "spin" in the NAR article negative I believe you are playing directly into what the article refers to as "over-exaggerated negative coverage on the housing conditions." While you are tasked in this section to report to areas beyond Boston and its immediate suburbs, you are not bound to ignore them completely. Your coverage at times fails to provide the commentary that these consumers and homeowners deserve to hear. You are bound as a REALTOR to provide all relevant data, and it seems that this space is dedicated more to the bad news than it is to the good news. While it is more convenient for your position as a buyer's broker to champion a crash, it does not play in communities like Back Bay, Brookline, and many others where the news is good and the market is strong.

    Posted by Greg Kiely - Brookline December 15, 07 11:06 AM
  1. You have a valid point that there are communities that are stable and rising. But they are few and far between.
    My position as a writer is to report what I see. My position as a buyer’s agent is to evaluate each house, in each community, one at a time, for my clients. (It is sort of like the Patriots concentrating on one game at a time. I hope I can do as well as they can!)
    I am willing and interested in seeing your stats as you finish them. I am attempting to be fair, so bear with me.
    Readers, am I off-base by not talking about how well some communities are doing?


    Posted by Rona December 15, 07 06:33 PM
  1. shawnna, did you close on the house?

    Posted by Ted December 22, 07 07:56 PM
  1. "Readers, am I off-base by not talking about how well some communities are doing?"

    If you care about your credibility at all, you should continue calling it as you see it. NAR has severely damaged the image of the entire industry by not being honest. Agents that can be depended on to not sugarcoat the truth will prevail in this market. Those that don't are ruining their reputations...trust me, it gets around.

    Posted by Bette D. Farm January 1, 08 09:27 AM
 
About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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