Selling Poinciana One Property at a Time.

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There will always be a heap of blame thrown in our direction.  It comes with the territory as there will always be the few bad apples.  But... BB you have better perspective than many - we can only control ourselves and our own business.  Just do the best we can each and every day.  Let our own moral compass be our guide and let the chips fall where they may. 

Hi Bryant... The bottom line is and always has been that a home is worth what someone else is willing to pay for it (or if they aren't paying cash, what a mortgage lender says it appraised it for).  Market conditions set the price, REALTORS can simply advise buyers and sellers of what that price is... whether they listen of not is another story. 

Wow...all this time I had been deluding myself by thinking that I was one of the good guys!! Appreciate you setting me straight. (can I take my tongue out of my cheek now?)

I enjoyed reading your post along with the links.  What you say hits home with all of us I'm sure.  Thanks for putting it out there.

Makes me remember that a man who inherited a subdivision (about 200 lots) that had houses he did not own, but the land was leased to the owners yell and curse at me that it was MY fault his father's taxes were so high because I sold "all that crap" for too much money.  I'm just the broker, I didn't hold a gun to anyone's head and make them pay any price or buy a house at all for that matter.  None the less, he felt I was to blame.

Brian

I just wrote a post along those lines:  No Wonder Why They Think We are the Lowest of the Low. Basically, we get blamed for everything whether the market is good or bad.  And regarding the bubble, I think many of us felt like it was all going to blow up in our faces - but as you said, it was never the fault of realtors.  Consumers are going to do what they are going to do.

Market value is what a ready willing and able buyer is willing to pay for the property- in an arms length transaction. Not a direct textbook quote but close. We were not the cause. What I definitely hate now is the unrealistic real estate agents that are still listing properties in the 2006 price range- giving false hope to sellers, clogging up the market with properties that will not appraise for 30 percent lower than listed price. It just is not right and that too my friend is giving our industry a bad name.

Ahhh... Are you revealing another one of your light bulb moments?

Hadn't thought about it that way but nothing wrong with your reasoning skills! I remember a house: running comps, suggesting price and losing the listing to someone willing to go tens of thousands over my suggestion AND IT SOLD. I was also accused during that same time of 'buying a listing' whe I took it at the sellers price for 2 weeks AND IT SOLD FOR FULL PRICE. I knew then that we were headed for some weird times.

Your picture says it all. Yes, there are and were vultures out there, but they are and were not necessarily Realtors.

very suscintly put.  We all have to stop worrying about what will happen in the future and focus on the job at hand today.  The rest will take care of itself.

Oh, you are SO right, BB!  We do NOT control the market--we work in it and do the best job that we can for our clients.  As my dear Ninja coach says, 'I'm responsible for marketing your property; you're in charge of setting the price--I won't do your job if you won't try to do mine!'  I will say, however, that we do have to share with them the current market conditions and 'recommend' a price to them.  Some listen, some don't but, I've never declined a listing because they wanted to sell below my recommended price--I have when they want to list well above the market value!

I think we as Realtors will always get some of the blame and I think we deserve it because we are a part of "the Market".   Just a part though.  The good Realtors counsel Buyers and Sellers not to bid too high or put their house on the market if they don't have to move and the market is already saturated but, we're all not good Realtors.

Yep, I agree.  And I feel like you look on your previous post.

Bryant - No kidding.  We advise and assist and just try to help our clients get to the next level.  It is out of control and out of our hands.  (I don't see many "real" short sales, however...even though everyone is talking about them.  Banks aren't generally willing to give away their profits...especially when they can make "bank" on foreclosures...with the government's assistance).

I must admit those first two links do say that some are good and some are bad.  Unfortunately the bad ones are the ones that give us all a bad name.  Same as the legal profession.  We just have to know who we are, keep our own standards up and earn our own good reputations.

Exactly.  I always get a kick out of how the consumers trash Realtors thogh.  There sure are a lot of consumers out there who are guilty of behaving in the same fashion as the real estate professionals they trash.  

BB, looking at that eagle having a little rabbit appetizer reminds me that similarly the ingredients were out there that allowed us and others to enjoy some realty hasenpfeffer.  It takes a lot of ingredients to make a fine stew.  

No!  It was the bloody mortgage brokers!  We had telephone contact with appraisers and we encouraged them to lie and drive the price of homes up and up...

And that's why I can't talk on the telephone to appraisers anymore.

In my circle, we all feel like WE (mortgage people) are the root of all evil...according to so and so.

Bryant, I too have been accused of creating the havoc in this real estate market.  I just wish I had the power that they believe I have.

Broker Bryant... 

I think folks give us way to much credit that we "control" the market.  Control?  I don't even control the cats in my house let alone the real estate market.  Sellers enjoyed the ride to the top, now the ride down, not so much. 

Thank you for speaking the truth.

I am with you on supply and demand.  HVCC is preventing appreciation currently and supply is low, demand is high yet prices aren't being pushed upwards since we are PUSHING people into homes.  Crazy existence we live!

It is absolutely just supply and demand, mixed in with a little bit of misinformation from the Internet. Gosh darn that zillow for telling people their homes are worth more than they actually are.

Our job is much more of an advisor and a marketer then a price setter.  In fact if you price them too high, nobody will look at it and if you price it too low you will get overwhelmed with multiple offers.  Not much has changed since the boom except that there are less buyers and that financing is harder to come by.

Evil or not, I see you were caught on the fabulous People of Walmart site recently, BB!  Check out the October 6th post (it's quickly moving back several pages) and tell me this isn't you?:)

Yes, it's true, Bryant, I am to blame. I always compel my clients to buy at the highest price possible, since every $10,000 in sales price means another whopping $300 in my pocket. It is worth blowing the whole deal for that extra money.

Cheers,

Robin

Bryant - The market always decides the price.  There have been/are some real estate agents who migh try to skew data in sales remarks, especially if they were the owner/agent or owned property in the subdivision.  A good appraiser can see through that.

I say you hit the nail on the head. It amazes me how many people think we have any control over the market as a whole. We work FOR our clients. And how in the world could we have forced people to buy houses at the extremely high prices during the most recent boom unless they the buyers were wiling to pay those prices.

I totally agree.  If a seller in this market is not willing to be reasonable when pricing their property, I sometimes walk away rather than dealing with all of the anger.  I had one lady come into my office one day, she shook her finger at me and said, "You Realtors have ruined our country."  I showed her the door.

No you have it wrong ... the LOVE of Realtors is the root of all evil!

Realtors aren't that bad. They are mostly poor salespeople and terribly undertrained professionals. They tend to be unreliable and unsophisticated but nothing more than any other American business.

Actually BB, it's the love of Realtors that is the root of all evil. And it was especially the appraisers who were doing the loving, and the lenders who were waiting in line for some more love... Oh yeah, and perhaps some willing buyers and sellers?

We can also predict the future too and read minds.  And now in my area, Realtors may be held responsible for homes that flood even though the home is not in a designated flood plain according to the feds or I'll go one better, not even near water whatsoever.

Tis exacty what I said lasst week...the market decides...more sellers are finding out ..albeit sometimes the hard way...WHO the market really is...!

Sybil - Ruined out country?  That's really ridiculous and ignorant to even consider that Realtors are capable of such.  Imagine the mess that would ensue if there were this many FSBO homes being sold.  That's almost laughable.

Well, Realtors have no problems bashing the banking industry for the bubble.  So why be upset when the favor is returned?

I mean, SOMEONE must be blamed for this.  We cannot blame the buyers (they are just innocent victims) and we can't blame the government (now that the chosen one is in office, they are infallible)

So, who's to blame?

No we are not to blame...... People are in dire straits and selling homes and their dreams......a lot of sellers have lost their pride as well as their savings....and still Realtors complain when they are asked to lower their commissions!!!!!! So, yes the consumer does not think very highly of "REALTORS"-

Your picture of the eagle eating it's prey is perfect.......If REALTORS want to get back to business and make a name for themselves then they will have to wake up and become a little more compassionate......instead of posts like this that just feed to those fat egos!!!!!!! 

The barrier to entry for real estate agents is very, very low.

Hence, the number of unqualified and unethical people in the business.

The mortgage world is being cleaned up with background checks, fingerprinting, testing, etc and it is time for the real estate world to do the same.

It seems that more and more people these days are quick to blame anyone for just about any problem in their life, whether it's real estate, credit card debt, or health issues.  It always seems to be someone else's fault that they spent, ate or drank too much.

Bryant:

When things go wrong (as they have over the past couple of years) people will place blame on whatever target is convenient for them.  Sometimes we are a convenient target.  But, really, that is too easy. Any educated person who really takes a look at what has happened will know that it is not the fault of Realtors, but of a number of factors that came together. 

Sybil:

That is amazing.  I am glad you quickly showed her the door.

Wow!  We've finally climbed up the ranks to join used car salesmen and ambulance chasing lawyers in the upper echelon of worthless occupations.  There is one other positive that has become of this - we can now swim in any shark invested sea without worry - because sharks extend professional courtesy by not eating each other...oh wait, Realtors do.  What am I talking about?  STAY OUT OF THE WATER!!!

Unfortunatly there were mortgage brokers out there that bullied appraisers and wanted them to inflate prices.  Trust me.  I hear plenty of phone calls to know first hand.  Of course, I did not have my realtor holding a gun to my head when I signed the dotted line.  READ people!  and if you can't understand your mortgage docs, bring someone who can! 

Hold up now!  Don't think you realtors are entitled to all the blame.  Simply insert mortgage loan originator any place you see realtor and it works just as well.  Remember someone had to provide the loans for the houses that all you evil realtors sold!  :-)  The loan products were available and if a borrower met the lending guidelines, we had to offer them the product or face discrimination issues.  As a loan originator, I would really like to see more support for one another between the real estate agent and the loan officer.  The biggest challenge I face right now is agents that think it's still 2007 and we can close loans in 2-3 weeks or less and that the underwriter is the new Satan.  The underwriter is our new best friend.  They are the ones with the bulls eye on their backs that are providing a safety net for the rest of us.  It's not the sale that you close next week that will bite you, it's the one that rears it's ugly head a few years down the road.  Don't you want to know that time was taken for it to be handled properly.  I want us all to sleep good at night!  There's enough to worry about.

Great points, Bryant.  To hear some talk, it's amazing we can sleep at night.  I find, however, that I sleep quite well after a day working my hardest for my clients to help them reach their (realistic) goals within the confines of the current market.

So the perfect storm is created by a single cause? So easy to blame the facilitators rather than those making the decisions.

http://activerain.com/blogsview/1272590/new-housing-bill-will-force-loan-modification

Look at how many Realtors support the new regulation of BANKS and look how many blame BANKS.

Yet, when the table are turned...

REALTORS(R) created the bubble and we are the reason the bubble burst.

Wow... and to think.... I thought it was all of us lender's faults.

The good book says, MONEY is the root of all kinds of evil.  Realtors, buyers, and society in general all fall prey to this universal truth.  And you don't have to be religious to know that.

simple.....supply and demand. What are you new?

Did you see the recent study that showed the most and least prestigious jobs in America?  Realtors ranked as the least prestigious on the list.  Firefighters ranked as the most prestigious.  My husband happens to be a firefighter, so I guess we balance each other out.  :)

Amen -  Adam Smith rules still in his Supply and Demand Theory -  We've been saying this a lot - but in today's market it rules!!  Thanks for the thought provoking post.

Bryant, i really enjoyed your post.  having just been in real estate under 2 years, I never experienced the bubble - only the remains of the market where sellers still believe that THEIR house is better than the identical comp down the street that sold 2 weeks ago.

My best analogy to illustrate that realtors DO NOT control the market is this:  I compare listing a house to fishing.  Now I love fishing, but sometimes it can be frustrating.  Sometimes you fish for a LONG time and never get a bite (house sits, sits, sits on the market with no showings/offers).  Sometimes you get a bite on the line and start trying to reel it in (you get showing/second showing/offer and you work it, hoping this buyer won't slip away, fail to qualify, etc.).  Sometimes, if you're having a really great fishing day, you catch the big one (well-qualified buyer who closes on time and everyone is happy).

To take the analogy one step further, sometimes my fishing expedition is frustrated by people on the other side of the pond throwing in bait for the fish.  The fish obviously swim to the other side to eat the free food (me losing listings to discount brokers, or short sales/foreclosures lowering market value for the other folks in the neighborhood).

I never understood why people and the media believe that realtors want to sell at the highest price in order to increase their commission.  I always want the LOWEST list price the seller will agree to, and I always educate my buyers on market value for a home so that they don't over pay for a home.  Maybe it's just because I'm a newbie!

Initially my reaction to the blog is to side with Realtors(r) , however, why not address what really happened rather than duck the issue and be so quick to shift all of the blame onto others.

Without a doubt their were many, many players in the Mortgage Meltdown debacle including but not limited to: Sellers, Buyers, Realtors(r), NAR, mortgage brokers, appraisers, builders, and yes, Wall Street that glibly parceled out the Mortgage Portfolios to eager buyers.

But I cannot erase from my mind the memory of all of those Realtors(s) who cashed the numerous out-of-town and out-of-state Earnest Money checks from naive and greedy investors who had never met the Realtor(r), visited the project or asked questions about the compentency of builder who, just before the bubble burst, was raking in huge profits akin to a Mall Jewlery Store.

Let's be frank, many of the Realtors(r) in this scenario sat silent counting their lucrative commissions while their more  aggressive associates made unsubstantiated bold promises to "roll" or "flip" pre- construction Condos or homes in be Florida, Arizona or Nevada. Why?  To insure that the sale went down and to hopefully harvest even more commissions when the client wanted to sell the property.

It all worked for a while until someone pulled back the drapes of the litte man manipulating the levers in Dorothy's Emerald City in the Wizard Of Oz.

Many of us must shoulder some degree of responsibility and from the Realtor(r) comments about this blog they don't see it that way. To them the whole twisted, sordid dynamic was, well, "just beyond their comprehension or control". They were merely .. "order takers" doing thier job by helping to faclitate the inevitable.

And don't forget NAR with its 1,000,000 Members that was a major influence in pumping up the bubble.

I don't hold Realtors(r) anymore resonsible than many of the other players , however, to take the position that they were as clean as fresh driven snow is to me frankly embarassing for a so called group of "Professionals".

Blaming Realtors for the current housing market is like blaming the REPO man who takes your car after you haven't paid your bills for 6 months or the salesman who sold you the car.  Nobody wants to take personal responsibility for their own purchases.  If a bank called me up today and offered me a million dollar loan to buy a luxury home I wouldn't take it because I know that I can't afford the house.

What people were doing during the peak was gambling.  I take a loan I cannot afford with the intention of selling the home a few years down the line to pay off the loan and pocket some profit.  Unfortunately, it was a gamble that did not pay off.  That does not make the Realtor at fault.  It was a gamble people took and in gambling there is a risk.

Hey; I used to be in the auto business.

At least we're all not standing in front of the office waiting for an "UP" and getting sneered at.

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Boy, you hit home today.  So many realtors in the business today are getting blamed for the market.  We never set the prices, nor did we cause the market to drop.  I still list and sell, mostly short sales and foreclosures. When the market comes back, we'll change our marketing plan and continue on with our business.

Realtors are seen as overpaid and a necessary evil. Until Brokers take the reigns and start having expectations and demand accountability from their agents, nothing will change.

Car salesmen are not considered professionals, yet we rank below the. The root of all evils is a Realtor's association that gives the designation to anybody with a real estate license and a checkbook. If they required a certain min number of sales per year, you will see how quickly our image would improve...

See my blog on this topic...

You are so right on--back to the 60's!  We do what we need to do just like anyone else holding a job.  I completely agree with what you said and I love it.  Thanks for the great comment!

This bubble was not created by Realtors....The bubble was a result of all the funny loan programs such as OPTION ARM, ARM, SISA, NINA, NO DOCS, ETC ETC. They were created by the GREEDY LENDERS AND DISHONEST POLITICIANS that drove the market beyond reasonable standards.Too much lending with no safeguards....This is happenning today in a much larger scale. TOO MUCH GOVERMENT BORROWING WITH THE FEDERAL RESERVE PRINTING MONEY AT LIGHTNING SPEED ! Our national debt is no longer serviceable. The DOLLAR may COLLASPE and no longer be the currency for international transactions. This would lead to a much larger meltdown than what we have today. With much HIGHER TAXES from Obama's programs, we need to hang on to our wallets and STOP INSANItY. WE ARE LIVING IN VERY chaotic times. The national debt is no longer SERVICEABLE. BEWARE !!!

I agree with some of the others; Realtors tend to mostly get the blame. I must say that "some" deserve it, but like any other profession there are good and bad in every profession and the consumer should take note. I really amazes me that the stats tell us that around 80% of people purchasing or selling a home will hire the first agent they come in contact with but when it comes to getting a flu shoot they want ten differant opinions.

Laughing...if this isn't a case of the pot calling the kettle black.  They think everyone has the same power to "set" pricing as they do.  They probably figure we can change our balance sheets to reflect what we would "like" to make as well!!!

Christina Henley, GRI, CRS, CFS, CDPE

Broker/Owner

Solid Rock Realty

I'm glad someone is taking it for the team! Thanks!!! =P

I just love it. Like a seller sets the price and then if someone says it is too high.......is the seller supposed to say " You are correct,even though we have three buyers lined up to purchase at #300,000,I just do not feel comfortable and let's sell it for on;y $200,000" The REASON why this began in the first place was banks and other lending institutions givng money away they didn't have to people for homes they didn't need. Period.There was a REASON the school security guard received jumbo loans of 400,000+ on a salary of $25K on a salary he lied about and a bank that accepted it as fact.

Great post and great picture. 

Do you ever think about our forefathers thought pattern when they chose the eagle as our National bird?  I mean, the eagle is known as an opportunistic predator that scavenges and even steals food rather than killing it on its own, other birds do not like the eagle.  Hmmm... opportunism...capitalism...government giveaways...??? 

Just something to ponder.

It really isn't much of a challenge to become a Realtor or a Mortgage Broker.  The educational requirements are low and if you haven't been convicted of a crime...you're in!  If either one of these professions required a four year degree in business or finance and had a test as difficult as that for a CPA or securities professional, I think we would see the faces of these industries look very different.  Fred Glick is right when he says the barrier for entry is very, very low.  You may not get rid of the unethical this way, but you sure can get rid of the unqualified, hit and run hacks out there.

Thomas and Ben both hit on good points.  There are many Realtors out there that put the love of money above their client's best interest.  It happens every day.  NAR ALWAYS puts the interest of Realtors above the interests of consumers, and at some point, that is really going to come back and bite them.  We are not here to set market prices, but we have a responsibility to protect those who do not fully understand all aspects of the market, and many agents fail in that regard.  We need more professionalism, more ethics, and more caring if we as agents ever want to change our public image.

I just love your posts....

RE: Your picture says it all. Yes, there are and were vultures out there, but they are and were not necessarily Realtors.

Leolinda sums it up best, although the picture is not one of a vulture, just a vulture-like creature known as our symbol of freedom, the American Bald Eagle. Very ironic too, and very symbolic of the real roots of this problem, also the roots of most of our problems, the 654 +/- people that make up our national government. They pass laws that seem fair to them without ever thinking through the reprecussions and end results. Not everyone should own a home as they think. It is not the answer to give equal portions to every single citizen. What does a father reap if he sows everything a child wants into them? Not everything a child wants is beneficial to them. It is up to the father to decide. Our re-founding fathers have decided it's best to give everybody a hand out, not a hand up. It's the roots that dictate how the fruit comes out. Our roots are bad and our fruit is bad. All Realtors can do is try to clean up the mess within the rules of the game.

It can become better, take an ax to the root the very next time there is an election, follow your heart not your head and let's return our nation to it's rightful owner... God. Then the Blessings will return

There you have it Bryant.  You are right once again..

Brian

I wrote a post about sellers being unrealistic and not using the full capabilities of their Realtor: Selling Your House...Not the Sentimental Value this is not the Realtor's fault, but someone has to be the brunt of the blame, and heaven forbid that the seller will admit that they were wrong. 

In response to Kevin's reply; The stats for Texas is a 78% failure rate of the Texas real estate exam the first time. That's not to say that there are "less than ethical, moral or intelligent" Realtors that just test well. I run into them every day. First day out of the shoot and their canon of ethics goes right out the window.

Fort Worth, TX www.starstatehomes.com

If you truly know or understand how the selling and buying is engaged, then go out there and teach the public how it all comes together. Lots of you, Realtors, try to act like attorneys at RE and mortgages brokers on steroids at the same time. Stick with your profession and leave the rest to others. Keep your mouth shut if your client is asking about a survey and have the question re-directed to a responsible professional. Realtors, we try to be everything at the same time. Realtors, JUST STICK WITH WHAT YOU KNOW period. It is those Realtors, "know it all", that have given us a bad name.

I know that you mean for the title to be tongue in cheek but I take offense to the title. I actually agree with everything you say in the post and I enjoy your posts, but I really think that it is inappropriate to have a title like this that gets picked up by Google and implies that the post will bash our profession. Sorry to be a "negative nellie" but we really need to work on finding ways to enhance our profession and stop finding ways to allow people to add to our already bad reputation. I just can not let posts like this go by without comment any longer.

Re:#69 OK, I guess I was wrong, God says it's the Realtors! That's funny Dan.

And with one client, we must have submitted 10 offers by now, all way over asking with lots of downpayment.... and we are still without a house.  Right now, for Marin / Sonoma county, where my client is at is a strong sellers market.  So, multiple offers abound.  Where will the market be next Spring or even this winter we don't know, but that's where it is now.  We can only advise to the extent of what we know.  

Well Bryant I hate to 1upya but I'm a contractor aka ripoff artist, con man, scam artist, etc. Life is but a mere perspective of what our society portends. Unfortunately we are living in a very cynical era where everyone in any walk of life is bad in one way or another. Thanks for feeding me fodder for my next post rant. Keep on selling!

I don't think we have to worry about it...Realtors are to be blamed anyway...from a missing toilets to a $50k above asking price, LOL! I think we need to get used to this type of criticisms.

Are Realtors to blame? Yes, partly. Just like the lenders are partly to blame, the buyers are partly to blame, the appraisers are partly to blame, Wall Street is partly to blame and so many other parties are partly to blame.

Your little write-up is just a faint whine...and by the way we've all heard this song before. You played a part, now get over it and stop counter-whining to all the other complainers. I can't even believe someone is still writing crap like this, let alone that somehow ActiveRain saw fit to waste a featured blog spot on it.

...and Ben Giodorno is right...Realtors are seen as overpaid, although I'm not sure about the necessary part. Most agents are over paid. Real Estate needs greater barriers to entry, so the 70% of Realtors who are completely retarded will be forced to find work that more closely fits their abilities.

How is it that a teacher with at least a 4-yr degree who is doing something as important as educating our children is only get paid $40,000 a year, but someone who is a high-school drop-out can take some online hours and a simple test (yes, I've taken it) and then get paid twice that amount for doing minimal work?

Roll into the office at 10am, drop by the water cooler for some BS'ing at 11am, place an ad or two in the paper, post a blog online, take a 2 hour lunch and then show a couple of houses. Oops, you just stumbled into a sale and got paid 3 months worth of a teachers salary...congratulations, you rock! And don't tell me that it's not easy for a retarded Realtor to make $80k a year, just like it's easy for a skilled Realtor to make $200k plus a year. I've been around Realtors my entire life and I've seen it all first-hand. Egocentric, whiney, over-paid lot that they are.

I realize that there are some great Realtors out there, but YOU ARE THE MINORITY. Chances are, if you're in Real Estate and you are reading this, you are most likely NOT THE MINORITY!

Well written Bryant! Like you, my sellers always wanted more than what I reccommended. In fact, during in the past 17 years of selling real estate here in the Orlando area, that's always been the way, the sellers rarely want to list the home at market value, they always want more. One of the more difficult parts of our jobs as Realtors is convincing our sellers to list at a marketable price.

Let's not forget those investors, they ruined our market here in Central Florida by speculating, buying and building too many homes which of course created all that excess inventory. 

I remember reading articles saying that REALTOR's selling their own homes sold for higher than the customers listings.  The reason given was that customers homes were price lower in order to sell quickly to collect a commission.  That does'nt sound like a way to drive up values even if it were true.

I can assure all of general public, I am no rich man!  I have always done what I felt was best for my client.  If I do, then what is best for me will follow.  Sure, there are bad apples in ever career barrel, but why should that take the entire industry down?  A majority of us are honest men or women providing a very important function, no different then any other professional service.  The truth is people who make a mistake due to thieir own ignorance or greed, will blame others for their mistake any way they can. However, shame on the Real Estate Representative who knowingly steers their clients to the "best deal" of the moment for the sole purpose of making that sale.  Those "so called" professionals may not last long but continue to degrade the reputation of this fine industry and the people who consider this their career. 

Oh yes... I wish I had all the power!  Finger pointing usually points at the wrong direction!!! :-) 

From a comment regarding the picture.  The picture is not that of a Vulture, but the American Eagle.  Bryant, interesting choice here. It wasn't the common Scavenger waiting, sitting back on its prey to weaken before swooping in for the kill ... it was the typical American that did so. It started out slowly, then picked up steam. It was the "I'm gonna' git more than the other guy" type if mentality or a "me, me, me" attitude. With an Administration that was simply the grease to a squeaky wheel, and our attention diverted towards something else (the Iraq War), it soon became an all out free-for-all where one system supported the next and it just got worse and worse until ... bang!  The bottom dropped out.  There was simply no one at the helm regarding oversight. From the Politician's, Federal oversight, Lobbyists, Lending Institution Executives, secondary financial markets, mortgage broker, real estate agents, appraisers, sellers and buyers ... all fed off each other. Then when something went wrong, we started pointing fingers at everyone except themselves, searching for a scapegoat to blame. Largely, that's what's wrong in America today - people, in general, don't take personal responsibility for themselves, but are more quick to put blame on someone else.

We are all to blame. Even when we try to tell the buyer or seller otherwise, what do we do?  We give in to their wishes b/c we don't want to "lose the sale," right?  If you don't say yes, the other guy down the street will, so it might as well be me!  It's like the health care industry where we see a commercial for some drug that's telling us we need to rid of ... say ... heartburn and give it a fancy name like Acid Reflux. The next thing ya' know, that person's calling their Doctor asking them to write a script, the Doc doesn't comply, patient really wants it, goes to the next Doctor that will write it up!  No industry is immune because it's plain and simply human nature ... person greed, person gain ahead of the other person. 

Dog eat dog.  Survival of the fittest.  To the Victor goes the spoils.  

It's (unfortunately), plain and simple human nature.

BB,

If I had only read the first four short paragraphs I would commence to chastise Realtors for trying to hog all the acclaim for the Bubble! :)  However, we all know that there are not enough pointable fingers on both hands!! Congrats for another feature post.

"There are many Realtors out there that put the love of money above their client's best interest."

If I had known that Real Estate is the only industry where that happens, I never would have gotten my license! 

And for those who are saying that "the barrier is set low," I think you mean that the "bar" is set low?

Bryant! I guess you can blame your guilt on too much Vodka in your orange juice. I for one have never felt evil in what I do. I am stuck on the fact of "Truth, Facts of Life, and Market" drive buyers and sellers not my greed or my lazy bank account. Sellers and Buyers, are very much aware of the markets, they make their own decisions based upon the needs of their family. I also think as many of your respondents do that Lenders, Banks, Mortgage Brokers ect ect got dirty with all this the situation was inevitable and created by the Fed and irresponsible lending and unrealistic credit worthyness. We are the ones who had to explain it all and make excuses; because our lifes depend on it.

Love it, love it , love it.

The title was excellent and the content hit the nail squarely on the head.

Keep up the good work

Leander

Love it, love it , love it.

The title was excellent and the content hit the nail squarely on the head.

Keep up the good work

Leander

It is always funny how we so often get blamed for whatever decision buyers or sellers make.

In 2005 and 2006 we used to do CMA's for buyers and they would offer more than the CMA and then would get a counter offer and come up even more. The home would not appraise and the buyer would come up with extra cash. We would raise our concerns but they knew better than us and would say this or that economist on TV said house prices would never decline because we are in this new world economy.

Of course today those same economists who said housing would never crash are saying we are at the bottom, or the bottom will be next year or whenever. Some are now saying if the $8,000 tax credit is not extended for first-time buyers then the market will again decline with values going ever lower, others are not so sure. Others say the stimulus plan will make housing recover. Sorry, but I have trouble believing those that are so wrong so often.

We are now blamed for the loans that buyer's took out and cannot pay. However, many buyer's go to their lender to get their pre-approval letter. The buyer tells us they can afford the home easily, gets the pre-approval, and the lender when we ask say this buyer is very solid. We now find out that they got a liar loan and that is our fault.

Today, I see buyer's getting 100% USDA loans, borrowing the money to make their escrow deposit and find out that they only have one months mortgage payment in the bank saved up. On top of that the seller is paying the closing costs which is really being rolled into the mortgage as a higher sales price. I sit down with these buyers and discuss with them my concerns but they decide to go ahead anyway. If they lose their home, again it will likely be our fault.

In 2005, we had a real estate lawyer speak to us about financing and how to avoid legal pitfalls as a Realtor. He told us that it is best not to try to pre-qualify buyers ourselves, but instead just have them go to a lender to get us a pre-approval. He said it is not your job to determine who can afford to buy or not, that is the lenders job and there are standards for each type of the hundreds of loans. He also told us that Congress was even considering making it okay for illegals to purchase homes and we should not get involved in that. He also said that community organizations were suing banks for not lending to low and moderate income buyers and that Congress wanted more loans to be written to these groups, and that we could find discrimination suits brought against us if we tried to determine who was a qualified buyer or not. It has been in the back of my mind since, let the lender do the qualifying.

I had my doubts then as I do now whether the buyers can truly afford the home they are buying, but they have been approved by the lender and the standards set out in the government (taxpayer) backed loan programs.

And unfortunately, many buyers and sellers do not believe it is our business to know their finances. Though we can ask many questions they often do not tell us the truth or the whole truth. How many buyers say the home will be their primary residence and later we find out that they really bought it as an investment home. And how many sellers tell me they are current on their mortgage, they owe $150,000 on it and their taxes are current. I then do some research and find they never paid their taxes, they are four months behind in their mortgage and they actually owe $230,000. How many buyers have told me their lender said they are pre-approved to buy a $300,000 home but then I find that when we get them pre-approved they can really afford a $100,000 house. I can only advise them based on what I know, and if that information is incorrect then my information will not be the best advice.

With buyers and sellers I have always shown them the trendlines and statistics on what the market is doing. I never try to predict what will happen in 6 months or next year, or whatever period of time. I let them know what direction the market is presently going, but as I tell them how housing economists said the market would never crash back in 2005 and 2006, when it started to decline they said the decline would be minimal. Later in 2007 they expected a recovery in the first quarter of 2008, but when that did not happen they said the market would recover later in the year or in the first-quarter of 2009. There were very few that predicted any decline, much less 30%, 40% or even 50% declines. They have now come out with multiple predictions with new ones replacing the old ones when it was obvious that those were false. Eventually, they will be right with one of their predictions and will likely write a book about how they correctly predicted the low in the market and when it would rebound. And we will forever see them on TV as the one to listen to, until they are once again wrong.

My recommendations are always based on statistics and trendlines. I tell them the prices were declining by 3% per month during these months, 1% per month during this period or are currently stable or increasing. I will show them what has happened in the past three months, the three months before that and so on. I also tell them I cannot tell them what will happen in the next three, six months or any specific year. I do not believe anyone can predict that. After all who predicted that the Bush administration would spend hundreds of billions to bail out the banks and that Obama would extend that and would actually take ownership of auto companies. Who would predict that we would have a $787 billion stimulus plan, and what the effect would be? And of course the administration said if it passed we would not go above 8% unemployment and yet now we have 9.8% unemployment. We only can tell if a prediction is good or not after we see the actual results.

My job is to sell my listings and to get my buyers the best deal possible. At the same time I can advise them and voice any concerns I may have, but I cannot force them to sell, not sell, buy or not buy. If I am honest with them, they are the decision makers, and I do not accept their blame if they make the wrong decision. Now if I told them the market was going to increase 5% next year or decline 10% over the next year, I should be held responsible for that, but I do not tell people those things.

I thought it was MORTGAGE BROKERS who were the devil!!!   In this whole mess has the media ever ONCE asked where the personal responsibility was for the BUYERS who were sure they were going to make a million buying and selling homes?  For years I heard stories about people contracting to have  condos in Florida built, then selling them before completion and making as much as $200,000 on the transaction!!!  Now you can't give those condos away because of the cost of insurance.  But even without the hurricanes, there has to be some kind of sanity.  I felt stupid that I didn't jump in...I was too scared of losing the money I had saved for years and years.  Now I feel thankful I wasn't a part of it.  My husband used to ask me why I wasn't making as much as some loan officers I was hearing about.  I replied that when my borrowers asked me about pay option ARMS I fully disclosed, and most of the loan officers I worked with sold the payment without full disclosure.  Now I am happy that most of my buyers are still in their homes with a fixed payment they can afford.  There is something to be said for sleeping at night and being able to look people in the eye.  The day I can't do that will be the day I leave the business.

The masses are only happy when we get their job done quickly! Appraisers are running scared!!! (I believe they may have sustained some whiplash injuries due to this last decade of sales!)  Just sold one I listed $45,000 over an independent appraisal before we listed it, got two offers above list price and the buyers FHA appraiser  came in at$60,000 above that first independent appraisal... Go FIGURE!

Unethical greedy Realtor + unethical greedy lender + greedy seller + irresponsible buyer = conspiracy to commit failure.

If you're not in this equation, there's no need to defend yourself.  ;-)

One of the biggest reasons for the housing boom was the availability to get anyone into a mortgage. Everything from Excellent Credit investers buying property to flip or rent without having to verify their income or assets and not having to put money down to Poor Credit buyers that never paid for anything in their past. Also with little to no money down. I would guess we sold at least 50% more homes than we should have to people that would not be able to get a mortgage by today's underwriters. Those of you that have been around a couple of decades can remember when it was a lot tougher to get a mortgage than it is today. And you knew that this would blow up in our face during the late 90's thru 2006 with the irresponsible lending that we all benefited from. This is a tough lesson and people are really hurting from all over the world. We will get past this when the job market picks back up and the underwriters start opening the envelope of oppertunity again. I don't believe the underwriters should ever go hog wild again with lending money as they did from 2003 to 2006. It was crazy!! But I do believe that good credit borrowers should get oppertunities to a loan with less stress than is required today. The less than perfect buyers will need to clean up their credit and the responsible ones should get red carpet treatment. And that's my spin.

Mark Ilderton, Realtor_Exit Real Estate Consultants_Lexington, SC       

When I began appraisal work in 2002 as I had very little patience when it came to having my chain yanked by buers who thought I was their personal n...slave, I was called upon to appraise a property in a working class section of of a nearby town. I was told I would be given the job if I could promise a certain value. After studying the market I replied to the person who called me an told them that their value 'estimate' was 10% more than the prevailing market and that was a best case scenario. The person said that he would check wit hthe property owner. The person called me back and told me that the property owner had said the property is worth that amount because the interest rates had just been reduced and now buyers could qualify for greater mortgage amounts as less was going to interest. I replied, oh, because buyers can pay more the property is worth more. the person who contacted me said, yes, that is what she says and she also said that if you won't or can't do it she will find someone who will. The sale closed the next month. I suppose that homeowner found a sufficiently mendacious realtor, mortgage broker and appraiser to pull it off for her. As for myself, I smiled when I told the person that I would never do such a thing. the person replied saying, neither would I. We are both still here, picking up the pieces of a failed and shattered market. the lesson, trod in the olde ways, the paths of righteousness your fathers knew, for those ways are the best. steven

I agree that Realtors get too much blame for the current housing debacle, but I also think there was a culture of greed and disinformation that permeated the housing bubble of the mid 2000's, and it extended to many Realtors. For instance, every agent I know understood that prices were artificially inflated at the height of the bubble, and yet very few agents were telling their buyers to avoid these inflated prices. Instead, they were quoting misleading statistics about how housing prices always go up. In this current market, most agents I know believe the banks are withholding foreclosures to artificially increase housing prices and demand, and again, very few are advising their clients to avoid buying right now. Realtors need sales to make money, and they have and will continue to short change their clients to push deals along. Not every agent does it, but most crossed that line at least a few times during the bubble. This was a complete system failure, and we are supposed to be the system analysts. 

You got me BB !!!!!!!!

Helping people to buy and sell property as the market dictates value must be some kind of Sin.

you can't say realtors and lenders did not contribute to the mess but when you get down to it the Banks made it possible and ton of people were happy when they were making lots of money so who was going to rock the boat?

Typical that looking in the mirror isn't even on the list of options and pointing fingers is first on that list.

OK, so for some we have a target on our backs but there are many other (those with brains) who see us a a "value added" part of the equation.

Twas ever thus....

Banks flooded the market with cheap easy money and prices went up.  When they have pulled the punch bowl and prices went down.  Most (not all) of the buyer pool is going to spend what they lenders say they qualify to spend. 

As a Realtor and Loan Officer I have taken a conservative approach over the years.  My first priority is to represent honest and fairly the public as well as follow the law.  My representation of the client is a matter of loyalty but that ends when we do illegal or unethical things on behalf of clients.  The laws of economics apply here and it is our duty to try to retrieve the best results for the seller as our client.  My experience from being both a lender and agent is that I have seen a whole lot of fraud to get deals put together.  We have pushed buyers, we have beat up appraisers and we have beat up the lender as well.  I have seen this pressure time and time again from desparate agents.  I agree with you here regarding the blame as the lenders and appraisers succumbed to pressure of greed as well and share the blame.  I have another dilemma and that is a whole lot of good agents are taking the blame personally which I see here.  The fact remains there was a whole lot of corruption in this industry. 

The current foreclosure problem placing total blame on Realtors is a wrong.  Puffed values to make cash out refinances so homeowners could take advantage of the inflated value to pay off debt was an irresponsibility solely on the mortgage industry.  It is the Realtors job to push values for the sellers they represent.  The fraud involving real estate agents which is not the norm in our industry is a small part of the problem.  I will say agents are greed driven and that in itself is good when it is done for the advantage of the seller.  My only problem is when the agents cross the line with the appraisers and the lenders to make a deal happen.  This happened to often and thus we had run away inflation in the market.  A bubble.

New consequence to our industry is the call for regulation and legistation regarding short sale and the Realtors wanting this to happen.  This to me is a revelation of the greed of the agents.  We need to support free market decisions and not government regulation.  This country was founded on the ideals and principles of free market to suggest or support regulation in any way is to support a welfare status to agents or a government sponsored bail out of this industry.  My contention is that agents get the required knowledge of the specifics of this type of transaction and compete openly rather than have government over site this will make a positive impact and proactive correction where one is needed.

It is government who has exasperated the problem in the lending market that created the artificial demand of unqualified buyers.  Yes we went along with it and sold the poor unsuspecting buyers inflated homes with loans they had no business getting.  We did not check our greed at the door and like everyone else we suffer as a result. 

And of course you are right on the money with the 'fact' that the market dictates the prices. No matter how much a property is underpriced or overpriced....the market is going to do what the market does.....with available inventory....and who wants it.

And of course you are right on the money with the 'fact' that the market dictates the prices. No matter how much a property is underpriced or overpriced....the market is going to do what the market does.....with available inventory....and who wants it.

Brian,

I like saying that the market dictates the price of housing, then I show them my market analysis.

wow You struck a cord there! fair market value has always been what a buyer will pay and a seller will sell for... our job is top help them all get to that point.... there are lots of places to look at why the economy is bad... but there are still 92% of all people paying their mortgages in a timely fashion...

the media was banging the drum on the doom and gloom when 98% of all mortgages were being paid on time... mostly from the stock market people who hated the real estate market doing so well

mark to market regulations could have been changed with the stroke of a pen and the world would have been a better economic place immediately.... smoke and mirrors... sometimes I feel like the powers that be orchestrated this whole debacle....

 Yes, I saw the crash coming and 2 years before it hit I was telling people that this house of cards has to fall, it can't continue at this pace, and it did fall. Prices got to high to quick. I have been a practicing REALTOR for over 26 years and the definition of market value has never changed. The market sets the market, not real estate agents.

The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 

The buyer and seller are typically motivated; 

Both parties are well informed or well advised, and acting in what they consider their best interests; 

A reasonable time is allowed for exposure in the open market; 

Payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; 

The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

So, who really is to blame.

Well said, I used to work for a homebuilder and would have people asking why we kept on raising our prices.  Not hard to figure it out, people lining up buying them way faster than we could build them. I sometimes askend them what would you do? 

Whoever said these things was just looking to blame someone. Our society has got to blame someone. No one dares take responsiblility for their actions.

I was doing loans a while back in addition to real estate.  A guy came to me I knew well and he was in a hard money loan.  I looked at his credit and told him to hang on for four more months and we could get him a good loan; rather than another hard money loan.  I was in real need of a commission check at that time.  He told me he could hold on for another 4 months.  I called him 3 months latter to do the good loan.  He had already done the refi into another hard money loan to pull more cash out of the house.  

The Lesson:  IF you don't do the deal some one else will.  The market sets the prices not us. 

Fogettaboutait!

Supply and Demand Baby....

Looks like there are lot of folks out there with guilty a guilty conscience. Just be ethical in all of your transactions whatever the market dictates.

Nice pix of you in Wallmart! lol!  I have a blog in my community, and I must say at one point, home owners were saying "And these damned realtors are making the prices and values of our homes go lower and lower"..

In all honesty, I responded to the post with exactly what Gene states, markwt bears what people will pay...period.

And yes, I have known some sleazy realtors in the past, and will probably meet some in the future....

like any other business.

Me...personally, I work my but off for my clients!!!!!  I sleep well at night!!!!!  And they love me for it!

Good post........thanks!

Roxy

"short sale the seller doesn't care about the price" I wish I had that problem every underwater seller still I talk to still think they can get 2005 prices.

BB, so well put!  The market talks a whole lot louder than any Realtor® we might know.

Isn't this the truth!  'Wish we could control the prices, but you're right... people who don't understand our business do blame the real estate profession for everything they consider wrong (which usually benefits about half of the people in the market - the other half).

This has been the rule since creation.  Stone the messenger! It's always the messengers fault that something went bad.  The general population is never wrong and will always point the finger the other way. Those same people that paid extra above the low appraisal (usually against our better judgement) are also now blaming us for not stopping them (somehow they tend to forget how hard we tried) but we didn't so it is now our fault they paid too much.  All we can do is keep on being ehtical, weed out those that are not and hold our heads high knowing we are!

Buyers will gripe(even in low markets) that the prices are too high.

Sellers will gripe(even in high markets) that their list price is too low.

Someone has to be blamed, and it might as well be realtors.

As both a Realtor and Home Builder, I feel the need to come clean...I am doubly responsible. I have been living with this guilt for years then your post comes along and now I can finally confess. As I type this comment I can feel the weight of the financial collapse begin to fall from my shoulders. I feel so much better...

Thank you Broker Bryant!

B.B.,

"I say".... another EXCELLENT blog,BB! You're absolutely correct. We have no control over price at all. We can advise, do CMA's, offer our opinions, but  it is always the Clients who have the final say as to what the price will be..... Or the Appraiser.... Or the Lender.... Or the In-Laws, Brothers , Fathers... just about anyone else, but the REALTORS have NO SAY!... And that's a good thing!

Kathy Opatka

A couple of points

• Homes prices are set by what people will pay
• BUT that is largely a function of interest rates, and loan programs available and if the buyers understand what these loan programs are.
• With the end of Stated Income Stated Asset and NINA programs, people now must either buy homes with cash or qualify based on income, which brings prices for your "average" / median 3/2 home down to what the median income can qualify to pay . Throughout this decade home values in AZ, Las Vegas and SoCal went thru the roof, but wages/ income fell.
  
• So now without SISA or NINA, that means values will fall to meet that income's ability to pay, and there will be no "bounce" in values. The market prices are the new level of pricing.
  

The Realtors weren't evil.

The Loan Officers weren't evil.

The buyers and sellers weren't evil.

However, the lack of regulations on lenders, particularly in the subprime and jumbo arena, lead to many buyers accepting that they could get a $350,000 home, with 5% down, and a $800/mo payment, and that they'd be able to refi and take out $60 grand every 2 years without a hitch.

So, I'd chalk up what happened less to evil, and more to stupidity, ignorance, slick salesmanship of complex financial instruments, and some fraud.

No, many of us actually advised against home buying and recommended selling at its heights. Those were the lean years of my real estate business, now I am prospering with many of the buyers I once refused. Can't keep up with the buying orders since early 2008.

Oh we so did not cause that bubble.  If anyone is to blame it's the government, consumers, and lenders. 

YIKES!! I didn't realize this post hit the news letter.

I wrote this post in August of 2007!!! I did edit some for this article but the thoughht process is 2 years old.

I couldn't resist using the Eagle. I actually took that picture on the side of the road in my market area. Darrell in comment #83 is spot with why I chose this picture. It's the American way. I mean that as being a good thing.

Obviously I can't respond to every comment but I have read them all. A very wide range of thoughts. Some spot on and some that never made it past the title of the post.

I really don't have anything to add to this conversation except for "it is what it is". I list and sell real estate. That's what I do. I help folks achieve what THEY want to achieve. I don't lie, cheat or steal. And I would venture to say that most of us in this business are the same way.

Great converesation. Thanks to all for participating.

There's a lot of blame that can go around for this bubble.  I think that the conditions were in place where people did what was in their best interest at the time.  If a renter could get out from paying rent and into a house at the same or less cost, they did so, not recognizing that the cost of ownership would increase as their loan's adjustable rate changed.  Many lenders made loans "affordable" because they could, due to relaxed guidelines.  Home sellers had more potential buyers, so they raised their prices due to demand.  Home builders recognized increased demand and built more.  For the most part, there was no negative intention by any particular group.  The conditions that were in place is what caused the bubble.

... and we are ALL millionaires to boot!  It amazes me what the typical consumer thinks about a Realtor.

Cheers Guys!  Research is no match for emotion sometimes.  The loving owner sees value no one else ever will.  Try prying 15 pictures out of the hand of a client who believes the buyer wants to know their family.  Never mind my 24 years of Interior Design and Staging experience.  Once again emotion overrules.  It is as hard as showing them 26 properties that support your numbers and them accepting that research as fact.  It is what it is.  Sometimes the best thing to do is get them emotional about what lies ahead, and ask how much more they are willing to pay the mortgage company while they are waiting to get their price.  Chances are in the extra time they will pay more in interest than they would gain had it sold at their higher price.  So, they pay 4-12 more payments and still haven't sold the house.  It will always be a Merry-Go-Round, it's just not so Merry right now!,

The bubble had very little to do with Realtors(R).  It had everything to do with cheap money provided by the US Government and taken advantage of by speculators. The housing bubble implosion was the fuse that lit the real explosives, Collateralized Debt Obligations (CDOs) and Credit Default Swaps (CDSs), that sparked the financial crisis.

Realtors(R)... don't take the rap.  The guys on Wall Street did it and they'll do it again if the feds don't reel them in.

Here's REALTOR Greg Swann at Bloodhound Non-Realty telling suckers to buy at the top in Phoenix in 2006

Now you know why youre hated

Greg Swann telling people to buy at the market top in 2006

http://activerain.com/blogsview/400125/mary-mcknight-calls-greg-swann-nicole-richie-and-says-you-belong-on-a-leash-seriously-i-did-that-

21 reasons to bank on the Phoenix real estate market (July 2006)

Obviously, I consider this a profoundly silly question, but to lurk among the BubbleBloggers and their seething commentariat is to acquire an education in a slice of America invisible from this side of the sewer gratings. Notwithstanding the idiotic economic analysis, which is really no worse than the static-market fallacies paraded as profundities in the pages of the Arizona Republic, these sites — and not just HousingPanic — are infested with a cult-like fever to inflict suffering — at second hand, to be sure — on people who are in fact guilty of nothing except failing to have drunk the BubbleBlogger KoolAde.

That’s all one. I don’t care. The whole of the last century was dominated by the bad behavior of viciously angry wretches, but look where it got them. The BubbleBloggers will someday bawl balefully in private, but they will never, ever admit that they have been very publicly very foolish. You will know and I will know and in the secret chambers of their hearts they will know they were wrong all along. But as long as you don’t hold your breath waiting for that contrite admission of error, you should be fine.

In any case, here do I compile my list of 21 really good reasons to bank on the future of the Phoenix area real estate market:

1. The migration from the Snow Belt states to Metropolitan Phoenix has been unabated for 60 years.
2. A similar extended migration is now occurring from the Northwestern states and Western Canada.
3. The “installed base” of all those migrants brings a steady stream of extended family members.
4. Proposition 13 makes moving up difficult in California; many Golden State sellers buy in the Phoenix area.
5. Californians in pursuit of other objectives — e.g., a friendlier business climate — migrate to the Valley of the Sun.
6. Baby Boomers will retire in droves to warmer climes — the Atlantic coast, the Gulf states and the Southwest.
7. Among those locales, Phoenix is by far the least prone to natural disasters.
8. Because of this, people from disaster-afflicted regions have formed a new stream of in-migration.
9. There is a steady migration of new residents from Spanish- and Portuguese-speaking countries south of the border.
10. Phoenix is a destination of choice or the second-landing city for immigrants from all over the world.
11. While higher oil prices will put a strain on our far-flung suburbs, the greatest pain will be felt in Northern states where fuel oil or natural gas are used as heat sources; even people who don’t hate the winter will move to the Phoenix area to escape high heating bills.
12. The Phoenix Metropolitan area is a dynamic jobs creation machine, adding tens of thousand of new jobs every year.
13. People who have or hope to have children move here as soon as they can manage it.
14. Compared to the areas from which many of our in-migrants are drawn, our homes are still very affordable.
15. We build thousands more new homes every year.
16. The Greater Phoenix area has 60 years of sustained practice at managing extreme growth — this in contrast to thrashing cities like Las Vegas.
17. Snowbirds, politely known as Our Winter Visitors, eventually move here year-around.
18. Our first waves of massive migration occurred after WW II; mustered out soldiers who had been stationed here came back with their families; this pattern continues among people who are posted here temporarily for various reasons.
19. People who stay at our resorts often fall in love with the Valley of the Sun and return as soon as they are able.
20. A significant number of active and retired professional athletes maintain homes here, in no small part because the Phoenix/Scottsdale area has…
21. Year-around golf.

It's funny how the average buyer "buys emotionally only to try and justify it rationally." (Buffini)  What else can be done?  It seems that the only thing is to show professionalism as THE market expert by making the buyer/seller feel as if they are the ONLY customer.  Here's to being market professionals!

-Joe

It's funny how the average buyer "buys emotionally only to try and justify it rationally." (Buffini)  What else can be done?  It seems that the only thing is to show professionalism as THE market expert by making the buyer/seller feel as if they are the ONLY customer.  Here's to being market professionals!

-Joe

Not only was the post great but the comments were great to read as well. Thanks for the dose of perspective. (Not that WE needed it...)

If we can set the price then lets start raising the prices and increasing the volume.  Let's go.

I still find it rather hilarious when I am presented with the comment on how Realtors were the cause of the housing demise.  I'm sure there may have been some agents out there doing it strictly for the money.  After all, when you're closing 5-10 deals per month and raking in over a hundred-grand a year who wouldn't be motivated?  However for the majority of us we don't "roll" like that.  We uphold a strict code of ethics and professionalism and service our clients as such. 

I would then point the finger to certain lenders who could also be categorized into the same column as the Realtors who worked strictly for the commission.  If you seriously think about this, who were the one's that created the "STATED INCOME AND STATED ASSETS" loan programs?  It sure wasn't the Realtors.  Although we totally loved that program since it put buyers out onto the marketplace, I feel the LENDERS were pretty aggressive with their prospective clients in allowing them to over inflate their income when they were right on the line between qualifying for a mortgage loan and not qualifying at all. 

This is one reason why I chose to resign from being a loan officer.  The lender I worked for only cared about how many loans I could close each month.  If I didn't close enough loans I wouldn't hear the end of it.  I literally would refer clients to other LO's who pushed for ARM's and OPTION ARM's.  I only concentrated on FIXED rate loans because I felt I could sleep better at night knowing I got my client on a loan program that would ensure they wouldn't face the financial hardships that could come their way. 

If Realtors are truly the ROOT OF ALL EVIL, then I would have to say lenders are the DIRT IN WHICH THE ROOT STANDS UPON.  Realtors can't sell a home without some form of financing (unless the client pays all in cash).  Since that's the way it works when a typical buyer purchases a home, are Realtors really evil?  I would beg to differ. 

The buyer always decides the price and always will. The buyer uses what is available to them to make the purchase. The realtor simply facilitates the sale keeping their clients best interest at heart. 

Now I remember why we're rated somewhere between pimps and used car salesman in social respect!  :)  Thanks for a good post!

You said it right Bryant...it's all about supply and demand. Just like I heard about medical care on a news report - people are going to need to stand up and take responsibility for their actions. I tell my kids this all the time. It's a hard pill to swallow sometimes, but the blame game needs to stop.

I have a buyer now who's trying to stretch herself and I keep telling her she shouldn't look so high, she keeps telling me it will work. So what do I do, sell her a house in the price range she wants or walk away because I think she's going beyond her means.

Go figure.

Tom Burris you stole my line!  LOL  i heard that It was all of us lenders fault.

Great post! And I enjoyed the hyperlinks! 

Unfortunately Bryant the whole industry is at fault!!

If I were devising a plan to decimate the Real Estate Industry I would:

1. Remove financial consequences for defaulting on current property loan, guaranteeing a continual stream of REO’s with dropping values.

2. Not provide financing for move-ups requiring loans above the FNMA/FHA limit thus reducing upward mobility (no Government support).

3. Try to cap Real Estate Values using appraisers (HVCC) and reduced time on comparable sales.

4. Increase time delays for Real Estate Closings (new Lender Good Faith Disclosure requirements and HUD -1 requirement in California).

5. Dramatically increase complexity and time delays for lending on Condominiums, which are the primary entrance price point into the housing market by first time home buyers (FHA Mortgage Letter 2009-19).Reducing the first time home buyer market.

The Government’s current actions have been the perfect plan to decimate the housing market and thus keeping it in crises!!!

This reminds me of when the Government decided to punish the Savings & Loan Industry and legislated them out of existence in the 80's.

Is our Government getting even with us for their perceived idea we the Real Estate professionals caused the Real bEstate/Mortgage Meltdown and not their legislative actions???

Do we set prices? As you indicated - No, the willing Buyers and willing Sellers set prices.

I believe what happened to the market place is reflected when "if you can fog a mirror you can get a loan" (you didn't even have to lie) so expanded the Buyer's side of the value equation, it caused housing values to go out of site.

Yes, we were transaction facilitators, but not value creators. Some how we need to inform the Legislator's constituents (us) that the legislators need to fix these issues as stated above to allow the market place to operate normally and rebuild their constituents Real Estate Values!!

JUMBO DAN  San Jose, Ca

Zero financial regulations

You know when the private mortgage brokers were making no doc loans I think all of us had some reservations.  It was un heard of.  And I never went along with that silly game of pretending that those were legitimate loans to begin with.  Nor would I steer a client into them.  I did little selling and all listing, like I do now.  But after a year or so of these no income qualifiers, guess what FNMA and Freddie mac, jumped in with both feet.  They were loosing business.  They too decided to take the risk as well at the expense of all of us. 

Tenants for life, as first time buyers

Hate to mention this but I saw it first hand all across our city.  Entry level pricing jumped at unparalleled speed.  The entry level portion of the market that jumps $75 to $100 a foot per year is insane.  Close to 20% of the buyers we had in the city were not "traditional" first time buyers.  They weren't qualified, they were tenants for life.  But there was a 101 loan programs for them in the marketplace.  They just couldn't say no.  This was where they were going to make there first killing in the market.  Pair that up with speculators who were willing to buy to flip and you have the answer as to why the market price increased beyond anything we had seen in years past.

Condominium Projects

Not only was FNMA and Freddie Mac in the business of making questionable loans now, but they decided to raise the limit of non owner occupieds from a standard of 25% to 50% of an entire project.  This further drove speculation and investors were buying several units at a time in a building to flip them down the road once the project was completed.  This was a complete joke and jeopardized unit values in many hi rises.  This environment was pitting regular home buyers, against speculators and tenants for life.  It drove up the base line pricing on all homes in a project regardless of size, location, etc.  The typical buyer was getting squeezed out and having to make purchases on the spot or loose out forever. 

Artificial low rates and no qualifying

When you pair those up together you artificially allow for more and more buyers to come into any one market place.  In Seattle, we had close to 50% more permitted sites than we had ever seen.  This wasnt reality.  I had it in my newsletter in 2005 tracking it.  But the local lenders, the builders and everyone else kept saying, well then why are there so many buyers still buying.  Well you take out speculation, and buyers who werent real buyers due to bad loan programs and we would have seen actual sales velocity based on demand. This entire mess was greed based as someone above mentioned and any person who thought this pace of sales could last or maintain itself, was simply out of touch. More simply put, demand was not typically buyer driven demand, it was artificial driven.

So are Realtors the problem?

Well as in all industry's some of us may have been.  You dont sell someone something they cant afford and we have an obligation to inform buyers if they are getting in over their heads.  And yes it means walking away from a sale in my opinion if the buyers insist on moving forward with a zero down ARM in the height of the market when you know sure as hell it is going to collapse.  The same principals apply now.  everyone wants to stretch beyond there means.  But at some point you have to inform them there own there own.  

This crisis was built on a house of cards 10 years ago.  If you looked at our economic indicators since 2002 you just knew that we as a country were spending more than we could afford. Historically we would have seen a slow down in 2000 as it usually runs in ten year cycles.  9/11 in my opinion was a pressure reliefe vauvle to some degree and slowed the market because of the horrible terrorist acts that took place. If we had not had 9/11 I believe that soon we would have started to see the effects of over spending and rising market values beyond the norm and would have had a market adjustment at that time. But as a Country we were distracted and rightly so.

However afterwards we had governmental agencies manipulating the markets. interest rates, and no regulations. We stopped tracking unemployment numbers after 12 weeks to keep the unemployment numbers down. we were primed and ready for a colapse and still ignored the signs. And today we continue to spend and spend.

Yeah we maybe at fault to some degree, but this was and is a global problem in a world where private equity and Wall Street ran wild and all of us, even the bubble heads sat quietly on the side line until it burst wide open.

So let this be a lesson to all of us, for the next market cycle.  We had it in 89/90 and still did not heed caution to the signs ahead. Let us never forget these days and lets all be much more proactive as an industry to call BS when we see it and get politically involved in our government.

It was an enjoyable time to make money.  I remember being challenged on how to price a property.  I felt like I was throwing a dart and hoping that it wouldn't be too low.  Now I hope it won't be too high.

Don't get me wrong, I know my statistical data, but in both marketplaces that number shifts constantly.

I prefer to check my CMA's every 6-8 weeks, but find it much more frequent in this market place.  It's been easier just to create a search around my listing and watch everything happening around it.  It helps me to make decisions easier on pricing.

My FAVORITE Line when I was a "FERRYITE" (Training under Mike Ferry) was:

The world will communicate to you in one or two ways to tell you that you are priced correctly............

One with their feet they come, Two with their pocketbooks they make offers.  If they are not coming -  WRONG PRICE!  If they are coming and NOT Making Offers- Still the Wrong Price!

This FOREVER HOLDS TRUE!!  Joy

Today my husband told me he was talking to someone at work, who was going FSBO because none of the realtors would give him the price he wanted. What laugh and the laugh is on him, because buyers will not give him what he wants either.

REALTORS(R) are the root of all evil!!

I love the statement...it is a fact...but better said: dishonest and greedy realtors are who actually created the crisis; so, they are the root of the evil...

Well said Bryan, finally someone agrees with me.

Regards

Great post!  It's terrible to be painted with a broad brush stroke that we're evil and greedy, dishonest and manipulative.  I especially agree with getting buyers pre-approved.  That takes us out of the equation.  The fact is houses are purchased by buyers who determine what they are willing to pay, not us.

Everyone is responsible for their own actions. We did not set the prices for the house nor did we offer the amount to be paid for the house. More often than not, figure pointing is done by people not wanting to accept responsibility or any blame so they put it off on other people. I do think this is a crazy mess and I believe it was a combination of things that brought it to this point.

Well of course we are to blame. Realtors and mortgage brokers are the root of all evil. We were also responsible for the Swine AND Avain flu, the entire disco era, and the Kennedy assassinations. Just ask Andrew Cuomo. He certainly is doing everything he can to simultaneously pass the buck, and collect as many of them as he can for a higher office bid.

Being both a Realtor and mortgage broker, I forced every client to not only take a "Pick A Payment" loan, but insisted they make the minimum payment. By the way,as a consumer, if any responsibility I'm about to assume has a catchy name, I get leery very quickly. But then again, I caused the Mets to loose as well.

When prices were soaring past any level of logic.....that was me. I did that! It wasn't "investors"(a great name for someone who never owned more than one home at a time before his neighbor made $50,000 flipping a home) that never stopped to think that a market actually goes down as well as up.

Nope, it was me. I'm now off to sacrifice a goat, cast a spell on anyone selling Girl Scout cookies in front of the store and for good measure, I think I'll invent HVCC.

Yeah...Evil REALTORS!  God forbid that consumers actually took some responsibility for their actions and didn't always go running around trying to find a scapegoat every time they get their backsides in the fire!  You are right, we REALTORS get dragged kicking and screaming on this roller coaster ride we call the real estaet market and then we take the beating when things don't work out like everything thinks they should.  So much fun...but I love this crazy biz!

I guess it will always be that way. We don't set the prices. Greed got in the way and now they have to pay the price.

BB, you're correct in my view. I never put a gun to a buyers head to pay a price for a house. They chose, as free thinking adults, to purchase that home no matter what the price. I think we should stop finger pointing and looking for someone to blame. It was just the market as you say, it is what it is and we have to work with it. Adapt or die.

I will say that I am dreading an appraisal issue on 2 different listings of mine. The last sale in that particular neighborhood came $40,000 under the sales price. It' wasn't even a huge property priced at $280,000.  It's just outrageous that I can't help the sellers get more for their homes. But they make the final decision based on where they have to go.  I've even suggested that if it doesn't appraise we'll take it off the market & try again in the spring. I know that I am going to cry when the appraisal comes in & I won't be able to help it.

I say you've taken economics at some point in your life. I also say that the people who look to vilify Realtors are most likely the people who look to take advantage of whatever situation presents itself. The guilty like to assign guilt.

The problem is that we are all suffering in one way or another from this crisis.  Blaming Realtors has gone as long as the business has been around.  Yes there were rotten real estate agents that made the problem worse. But the system that allowed for everyone and anyone to get a loan, are the Financial and Lending Institutions.  If the consumers want to whine about it and point fingers, then i would start there.  As Realtors we didn't drive up prices, force them to make stupid financial decisions.  Grow up. 

On the other hand I saw several lenders telling customers on site that they had nothing to worry about and that the buyers would be fine because the market would continue on and they could refi later.  I replaced them that afternoon and got a new sponsoring lender.  Most of us here did the right things and cant control what some buyers are willing to do.  But again my thoughts are if they are going to fall into a hole of stupidity and wont listen to reason, I wont work with them.  Let them do it own their own. Then the only person they can assign blame to are themselves. 

Quoting Alison Porter "The guilty like to assign guilt"  That's precisely it!

You are absolutely right about us not setting the real Estate Prices.  You are also right that we sell if it is going up or going down.  I am looking forward to the market stabilizing enough that we feel are CMA are on firm ground.  I also find myself gratful that the banks are holding prices and not taking these low ball offers. 

Great Blog Bryant. It is true. The Buyers were the ones who made this crazy mess.

the links were interesting, thanks for the post

Price and condition, a home is only worth what is willing buyer is willing to pay

I whole-heartedly agree with your post

question??

Do realtors try to steer buyers to "their" mortgage originator?

Do realtors try to steer buyers to "their" home inspectors?

Do realtors try to steer buyers to "their" closing attorneys?

Sounds like price manulipations to me

Irv's comments are interesting. I'd like to meet some of the do-nothing realtors he knows so I could learn how to make $80 Grand a year for showing up at the office to get a cup of coffee.

I and most of the realtors I know work hard long hours with few days off. I do a lot of work that I never get paid for. Guess how much I get paid if a listing doesn't sell or a buyer doesn't buy... Guess how much I get per hour for taking a short sale listing that's mortgaged to $250K but worth less than $100K in the marketplace?

BTW, Einstein was a high school dropout...

Wake up masks of ignorance. Intermediaries and agents/angencies with their 'comps' and behavior of bygone days are long gone out of of date in this economy and continuation of it for years. Leave off with them and their continued pledges of allegious compliance given as 'oath' unto each other, only. For they have never and do not, will not fall under any statute of law enforcement. That is what makes the difference in YOUR decisions, YOUR transactions. CAVEAT EMPTOR, ONLY. REal estate marketing types were and are yet the root cause of the housing market failure and housing market comedownance in America.

All the little sideliner tidbitting, such as the Zillows, REO values will fall aside to such extent that you will not realize what your FEELINGS nor HEARTFELT WERE in future years. Did you not learn to THINK, to SEE AHEAD. Have you no patience Americans, let alone VISION AHEAD? The Change In the Face of Housing in America and you don't and won't even remember that.Goodbye to all of you.