If you want to know why people don’t tend to trust real estate agents, here’s a great example from a Q&A with Bill Hutchinson, president of the Thurston County Realtors Association in The Olympian:
Q: Given where the market is today compared with a couple of years ago, what would your advice be for sellers and buyers now that the market has slowed down a bit?
A: Right up front, this is a great time to buy. Interest rates are historically low; we have a great inventory of homes. As a buyer, what more can you ask for?
What more indeed. How about a reasonable price? Is now a “great time to buy” if finding a reasonably priced home is your top priority? Is now a “great time to buy” if you have a 5% down payment and your house drops 10% in value in the next two years (highly likely), and you have to sell a house that’s worth less than you owe on the loan?
I’m not anti-realtor as a rule, but I definitely am against the variety of realtor who insists that “it is always a great time to buy,” no matter the circumstances. That’s just dishonest.
(Jim Szymanski, The Olympian, 02.19.2008)
Jump to the bottom to add your comment. ↓
61 responses so far ↓
1
softwarengineer
// Feb 20, 2008 at 2:08 pm
CHECK OUT THAT DVD “ARE WE DONE YET”
Its about an African American family that buys an overpriced money pit from a realitor/contractor/inspector buffoon. Its hilarious. Everytime he puts on his different hat his advice totally changes.
The Realitor: Oh this house is solid and a great investment.
The Contractor: The whole house is rotting apart, you should have it inspected.
The Inspector: You can’t fix the wiring on the cheap, here’s your $1000 fine.
The movie sums it up. Professionals just look after their own pocket books. If they lie along the way, hey, that’s business.
2
brettro
// Feb 20, 2008 at 2:18 pm
As a rule, I never trust anyone wearing a pee-yellow jacket.
3
local Realitor
// Feb 20, 2008 at 2:46 pm
Yes, we are all the scum of the earth.
So next time a prospect asks me what do you think about buying or selling now I will just shrug my shoulders, look up in the sky, and pray that the almighty one gives me the answer.
4
patient
// Feb 20, 2008 at 2:52 pm
Revolting.
5
deejayoh
// Feb 20, 2008 at 2:55 pm
isn’t that captain kangaroo?
6
declinest
// Feb 20, 2008 at 3:42 pm
Never ask your barber if you need a haircut.
7
wreckingbull
// Feb 20, 2008 at 3:46 pm
So next time a prospect asks me what do you think about buying or selling now I will just shrug my shoulders, look up in the sky, and pray that the almighty one gives me the answer.
Actually if more agents responded this way, we would not be mired in this collapsing Ponzi scheme. Keep up this response, it is far less damaging than the responses I usually hear.
8
deejayoh
// Feb 20, 2008 at 3:57 pm
KingCo SFH inventory is flirting with 10,000 again already.
9
The Tim
// Feb 20, 2008 at 3:58 pm
It’s like Bill Hutchinson said: “we have a great inventory of homes.”
What more could you want?
10
rose-colored-coolaid
// Feb 20, 2008 at 4:18 pm
Now you’ve done it Tim. Cue the Ray Pepper spiel about how it’s always the perfect time to buy if you get the right realtor…
11
rose-colored-coolaid
// Feb 20, 2008 at 4:25 pm
Sort of…I realize that making sales is your living. But let me take this to a different arena which hopefully isn’t quite so charged. I do not like taking cars to mechanics, because I feel like their intent is to sell me something I don’t fully understand. But if I need new tires, brakes, or a battery I do like going to Les Schaubs. Why? Because they will look at my car, make a recommendation, and only charge me for services they actually perform. Not only that, but if I think I am having brake issues, and it turns out the only problem is air in the brake line, they will pump the air out. A mechanic might replace the brakes just cause that’s what I thought the problem was, and hey it’s their job.
So the point of this is that you’ve got an entire industry giving their customers (the same people who pay their bills) bad advice just to make a buck today. It means that as soon as these customers have another trustworthy choice they will jump on it. I think we’re already seeing this happen with online realtors stealing market share.
12
Scotsman
// Feb 20, 2008 at 4:32 pm
Yup, time for Ray to check in…
The poor dears- I think “it’s a great time to buy” is such a reflexive response that they can no longer control it. Even though realtors know it’s b.s., the words are out before the brain can stop them!
13
AndyC
// Feb 20, 2008 at 4:41 pm
Perhaps this is a whole different subject, but haven’t Real Estate Agents had income increase at a rate greater than the increase in home value? (assuming overhead matches inflation and commissions remaining the same %)
What is going to happen to the poor agents when they start losing their jobs and start returning to their former jobs? I knew a 19 year old kid who sat for, and passed their Real Estate Agent Certification - or whatever they do - about 2 years ago. I wonder what Denny’s he’s working at now…
14
Pete Aranguren
// Feb 20, 2008 at 4:44 pm
It is a great time to buy.
Lot’s of inventory means a great chance to negotiated a very good purchase price. Realtors do not set the market price.
Interest rates are at the lowest levels in four years. We are in a buyer’s market.
Please reconsider the facts and call a realtor today.
15
The Tim
// Feb 20, 2008 at 4:47 pm
FYI, I didn’t write the comment just above this one as some sort of a joke. It’s 100% legit, as far as I can tell. You can even Google the guy’s name. Amazing.
16
Everett_Tom
// Feb 20, 2008 at 4:53 pm
Just think what even more inventory will mean!
Well.. they WERE…., up until this week…
Sorry Pete, not interested…
17
Alan
// Feb 20, 2008 at 4:56 pm
FYI, I didn’t write the comment just above this one as some sort of a joke.
Do you ever write comments as some sort of joke? The fact that you deny it makes me suspicious.
18
patient
// Feb 20, 2008 at 5:04 pm
“KingCo SFH inventory is flirting with 10,000 again already”
10k exactly at 5pm today.
19
The Tim
// Feb 20, 2008 at 5:06 pm
Well, sometimes. Okay, once.
20
Cougar
// Feb 20, 2008 at 5:22 pm
This is creepy too! ~ hous-580698947@craigslist.org
21
The Tim
// Feb 20, 2008 at 5:25 pm
Cougar, did you mean to post this? http://seattle.craigslist.org/est/rfs/580698947.html
22
BLB
// Feb 20, 2008 at 5:26 pm
This is a great quote. I actually had a co-worker try and convince me it was a good time to buy using exactly this logic. I pulled out graphs and numbers showing why it was NOT a good time to buy, which he doubted because they were “from the internet.” He finally backtracked a bit, instead telling me it was a good time to buy a repossessed home, or a cheap fixer-upper. His valuable sources of info were from his realtor friends and mortgage broker father.
Hilarious, I say!
23
Cougar
// Feb 20, 2008 at 5:30 pm
Thanks Tim - a little slip. Is this creepy or what? I know not all realtors aren’t slimy, but this is just wrong!
24
Buyer
// Feb 20, 2008 at 5:52 pm
Just happened upon your site. You have an interesting take on things. I am buying a house next week, and while this may be unpersuasive to you, I would like to defend the realtor who says this is a good time to buy. For one, the market is not frenetic, so you can take time to look carefully. For another, while the interest rates are volatile, you can get amazing rates- we were able to secure a 5.375% 30-year fixed. At that rate and after tax breaks, the month-to-month cash-flow of buying seems reasonable. Finally, I doubt my place will lose 10% of its value this year (or next), but if it does, I will think of you and give you your due credit.
25
disbelief
// Feb 20, 2008 at 6:50 pm
Ok Mr. Hutchinson, you’ve almost got the job. Now, tell us, in your opinion: is now a good time to buy?
26
Jillayne Schlicke
// Feb 20, 2008 at 7:15 pm
I find it interesting that he glossed over the question regarding foreclosures.
I had a student in my short sale class that drove all the way up from Olympia to Bellevue because she said one out of every four listings in her market area was a short sale.
27
matthew
// Feb 20, 2008 at 7:47 pm
“what more could you ask for?”
Oh, I dunno, maybe an AFFORDABLE PRICE!!!!!
To Pete: Interests rates are not at the lowest point in 4 years. You obviously haven’t witnessed the highest single day 30 yr fixed spike we have had in decades this week. I just checked the BECU.org homepage and their 30yr fixed is 6.23 percent.
Why have we allowed these people to spout this garbage for year after year without being challenged?
28
Everett_Tom
// Feb 20, 2008 at 8:15 pm
Check this out!
The question is:
Who’d though that they hear the Seattle Times Elizabeth Rhodes say,
of course she finishes up with
29
Maria P.
// Feb 20, 2008 at 9:08 pm
Even if it was a good time to buy - it sure as heck isn’t a good time to sell.
30
Alan
// Feb 20, 2008 at 9:46 pm
Funny how people in the real estate industry can tell when prices are going to keep going up, but they can’t tell when prices are going to keep falling.
31
Jonny
// Feb 20, 2008 at 10:23 pm
pete: would be happy to offer people in the green lake area $250-300K for their 3 bedroom home.
32
Ray Pepper
// Feb 20, 2008 at 10:53 pm
Yes, it is indeed time for me to chime in………It appears this blog loves to beat a dead horse. I’ve been here about 5 months and repeatedly the bloggers here bring this up. Of course realtors want you to buy. All salespeople do. Does it make you feel happy to find ignorant people?
There are thousands out there. Many here as well. There are lousy people in every profession. Just like the Agent who blistered our staff a few days ago at the Home Show. I believe this “characters name is Foley.”
“Why are you doing this to yourselves?”
“I’m worried about you giving all your money away.”
“So you’re giving kick backs aren’t you?”
Fellow bloggers “You wanna know what really grinds my gears?” (Yes, I like Peter Griffin) I’ll tell you anyway. People who know nothing of what you do, spend 5 seconds looking at a sign, and then spatter off nonsense. OK now I will move on.
But, friends I’m seeing more Gems pop up every week. They are getting purchased many times before they even hit the MLS. Find your GEM, be patient, and I hope you get it. If its a true GEM it will not matter if the mkt plummets another 20%.
BTW the Seattle Home Show is sucking the life outta me. Friday night and 1/2 days Saturday and Sunday is all I have left in the tank. I think its something in the 9.00 fish and chips. I’m losing hair there daily. Come get your "golly" shirts! HAAAAAAAA We have about 70 left,
http://www.500Realty.net
33
patient
// Feb 20, 2008 at 11:03 pm
Buyer, I hope your future home will be one of the least impacted of the downturn, I really do. And if you are planning to ride out whatever decline that is coming in youe home, do yourself a favour and do not follow the housing market at all. It’s a waste of time since you are not selling or buying and will just make you depressed. Good luck!
34
Ray Pepper
// Feb 20, 2008 at 11:05 pm
1 more thing. I took the time to read a few bloggers here. “Now is the perfect time to buy if you have the right realtor?”
Are you suggesting I said that? WAKE UP!! Know how to buy 1st my friend. I don’t care who you choose as your realtor. What matters is what you are buying and what you are paying for it. USE WHOEVER YOU WANT!
YOU my friend have just grinded my gears! You get NO SHIRT. Maybe a bumper sticker if your lucky! Listen to what I say. Be happy I offer an alternative. If you don’t like me there is over 36,000 others to choose from . But, make them earn YOUR money!
35
deejayoh
// Feb 20, 2008 at 11:12 pm
lol. I’m starting to suspect ray is a bot, not a realtor. Ray-bot service. might need to get a captcha
36
Curious
// Feb 21, 2008 at 12:01 am
I enjoy this blog for it’s unique point of view and I assume most people reading this blog would like to buy a house but for whatever reason haven’t. I’m curious. What would it take for you to pull the trigger?
37
SeattleMoose
// Feb 21, 2008 at 5:19 am
The “why” is obvious….conflict of interest.
Nobody should ever be quoted on any topic whose answer or outcome involves their own stomach.
What do you “expect” a RE agent to say?
On the other hand, the “RE Diet” is starting to become popular again.
38
Toronto realtor
// Feb 21, 2008 at 5:33 am
To imply that realtors just list homes, take any offers and try to make them work regardless of whether or not it is the best deal, do little to no negotiations, and with very little effort cash a check that was basically robbed from the sellers’ equity is assanine.
39
Angie
// Feb 21, 2008 at 7:13 am
Ray, my friend, I think the Home Show is starting to wear on you. You’re starting to sound like the Swag Nazi. “No shirt for you! One year! Only bumper sticker!”
Y’all are so fixated on the statistics that you’re not thinking about matters on an individual basis (can’t see the trees for the forest?). Everyone’s waiting with bated breath for the stats to show a 20% price drop–what the sales people are saying is, people who are buying now can be the ones to drive the hard bargains and get those low prices. If the seller of a particular house won’t budge, there’s a very good chance of another equally good house where the seller will face the music.
Ask poor Jess Pumpkin, there are still areas where competition is still super fierce, but elsewhere…if you’ve found a place you want to put down roots, this would be a good time to go take your time, do your due diligence, drive a hard bargain.
40
Shane
// Feb 21, 2008 at 7:56 am
Buyer,
10% decline in 2 years would best case. 10% decline this year is likely in some areas. But, who cares. If you found a house you like, can afford and with be there a while just enjoy it. No use worrying about it now.
41
disbelief
// Feb 21, 2008 at 9:30 am
Yeah y’now, if you can “swing it”, buy it. Don’t worry, 10% - more or less, probably not more. At least I think so, and who’s to say otherwise. The important thing is you like the place, right? So what are you worrying about? dude, why make it so hard on yourself!
42
Jess-Pumpkin
// Feb 21, 2008 at 9:45 am
Thanks for the shout-out, Angie. I’m trying to relax more now — not much that fits our requirements is coming on the market, and the houses that are priced well are going quickly (there was a house in Ravenna that was only $525K that came on and left the MLS in a matter of days — I didn’t even finish my daydream of walking to work every morning before it was gone). Long live 705 and 710! Time to hit the bolly, Pats.
43
QueenAnneRunner
// Feb 21, 2008 at 10:35 am
It very well may be a good time to buy if you can get a house at a good price. There are a number of factors impacting housing demand right now and your outlook is determined by how each of these externalities impacts demand. The biggest unknown for me is how the lack of demand for securitized jumbo mortgages is impacting potential buyers, how long limited ability to securitize jumbos will last, what will the spread between conforming and jumbos shake out at when jumbo market returns to “normal”.
In Queen Anne I am seeing good “reasonably” priced homes moving fast. For example in the last 3 weeks or so 2 homes withing several blocks of us went STI. mls 28025105 went sti in 8 days at $795k and a home on West Raye went STI in 11 days at $1.8 something 2 weeks ago. Other less desireable and / or overpriced homes sit… Having said that, if I was in the market now versus having bought last year I am not sure I would pull the trigger unless I got a SIGNIFICANT discount to asking and recent comparables.
44
Brian
// Feb 21, 2008 at 10:46 am
When we moved up here from California, my wife’s cousin (a Realtor) insisted that prices would not go down. No matter what evidence I pointed to he had an answer. I told him, the problem with Realtors is that they will never concede a negative when it comes to housing. Trust starts in understanding what is happening and then trying to do what is right for your customer. The best thing consumers can do to break Realtors of bad habits is, when they decide to buy, not using a Realtor and trying to read up on what they need to do when purchasing a home. Or, go with a Redfin, or a real estate attorney to make sure things are done properly.
I see a lot of complaining and whining about Realtors on this site which is fine for about a day, but otherwise, move on and start being constructive. Whining about the same issues without talking about strategies for the future is fruitless and silly. If your strategy is to wait until prices fall another 20-50% before you buy, fine, but saying the same thing over and over again has very little value and it is making this site a bastion of the stupid.
45
Jeff
// Feb 21, 2008 at 11:46 am
I came across this site a while ago researching a potential move to Seattle, and I have to say it has few peers when it comes to know-it-alls, self loathing whiners and self promoting hucksters. The post by ‘buyer’ above is one of the few open, honest and level headed comments I have come across here. While I am sure ‘buyer’ is touched by all of your ‘condolences’, I find it amusing that you can so confidently predict the future of his/her home when you know nothing about the property being purchased.
There is little evidence of credibility or perspective on this site, particularly in the comments. Instead of all of the pathos and bitterness(and sales pitches), how about trying to contribute something more productive, and less redundant(maybe even original)? It might feel pretty good…even better than being ‘right’.
46
Joel
// Feb 21, 2008 at 11:47 am
Because of every Realtor’s dream has occurred and I am “priced out forever”. Oh sure I guess I could afford a 1bd condo, but squeezing myself, my wife, new baby and cat in there wouldn’t be pleasant. Especially since I can rent a house for the same cost.
I, for one, am grateful for the poor souls buying propertis right now. They’re the reason we are able to see house price declines because most metrics key off of selling prices. We salute you Mr. Falling Knife-Catcher!
47
Sniglet
// Feb 21, 2008 at 11:58 am
Personally, I will buy a home in Bellevue (where I live) when I can afford a nice SFH similar to the home I am renting without borrowing more tha 3 times my annual income. The way I figure it, the average prices will have to come down around 50%. But I am not worried. The way this credit bubble is imploding I think we are well on the way to meeting my target in a few years.
48
Nell Plotts
// Feb 21, 2008 at 1:15 pm
I am looking in Portland for a family member (condo). I came upon a 1 bed 1 bath listing. The photos didn’t show the bedroom and the narrative said studio so I asked the Realtor about a picture of the bedroom. He responded that it had none and gave me a song and dance about a futon.
As sweet as I am, I told him again that he lied on the listing. He told me to grow up. I told him that consumers don’t like to do business with liars. He corrected the listing and told me that it was a clerical error.
The Realtor thinks I am .. not nice, shall we say.
Maybe I was a bit agressive, calling him a liar, but consumers screen based on specific criteria and he attempted to game the system. What do you think?
49
mark
// Feb 21, 2008 at 2:44 pm
Here’s a house that I watched for a while.
http://www.zillow.com/HomeDetails.htm?zprop=49020452
The owners bought in Feb of 2005 and paid $349,000. They held for a little over 2 years and put the house on the market for $469,950. A gain of nearly 35% is what they were looking for. The price was eventualy lowered to $419,000 and was just sold within the past week or so. I don’t know what price they ended up getting for the place, I’ll watch the county records though.
There are many more similar stories out there. Owners, to a large extent, think that their homes are still worth these insane prices.
50
Buyer
// Feb 21, 2008 at 3:30 pm
Patient, Shane and Jeff- Just wanted to say thanks for your well wishes. We’ll see how it goes… It sounds like many writers here will agree that house buying is a risk and in some cases, if it is the right place and situation, buying makes sense in spite of that risk.
51
deejayoh
// Feb 21, 2008 at 4:14 pm
sniff. You like me, you really like me!
52
bitterowner
// Feb 21, 2008 at 10:02 pm
Jess, Re: “the houses that are priced well are going quickly ”
Of course. That has always been the case. The point is that a well-priced house is probably priced lower now than it was only a short time ago, and will probably be even lower in the future. Those who are currently “pricing well” are smart. They want to hook someone quickly before the market tanks even further. They have better insight than deluded sellers who think they can simply keep their overpriced house on the market longer until the right buyer comes along. They will eventually be forced to lower their price to levels far lower than what they could’ve easily sold it for today, and with a bidding war no less!
53
Ira Sacharoff
// Feb 22, 2008 at 5:29 am
Actually, I’ve been noticing the shout from real estate brokers “Now is a great time to buy” has become more screechy.
A year or two ago it was “but now or great priced out forever” but it’s different now, now it’s all about he huge inventory.
Maybe there needs to be a qualifier, and since I’m a Real Estate agent I’m required to say that it’’s a great time to buy, so;
It’s a great time to buy if you’ve got all kinds of extra money lying around and are willing to wait years to break even on your investment, unless you can find something selling for considerably less than market value…
Someone earlier mentioned if you ask a barber if you need a haircut…That’s a good analogy, and while most barbers will always say yes, I’d be the type of barber ( and type of real estate agent) who doesn’t want to cut your hair once, get my money, and try to find new suckers, so I’d say ” No, your hair is short. Now is not a good time for a haircut. Come back in a mont:h..do you want to look like an escaped convict?
I’d lose some customers that way, but others would come back for their haircuts.
Maybe i should cut hair for a living/
54
b
// Feb 22, 2008 at 8:45 am
Buyer -
The point most people here are trying to make is that buying right now is an enormous risk and not going to be worth it for 99% of homes on the market today. Pick up any financial newspaper or magazine right now and please read everything you can about the credit markets. Anyone who thinks house prices across the country are going anywhere but the toilet is naive. Homes are priced according to what borrows can get from the bank, they shot up when banks lent Taco Time employees $800k for $1000 a month, and they are going right back down as that situation evaporates. Notice that the fed funds rate is very low, yet mortgage rates continue to rise. Very few people buy a $500k house, they buy a $3000 monthly payment. Increase the interest and downpayment, etc on the credit side and what has to happen to the price?
55
JJL
// Feb 23, 2008 at 12:01 pm
Mark,
Please before you call the seller’s insane for setting their asking price - please give them credit for the money they spent on all new flooring, new vinyl windows, new gas fireplace and air conditioning.
It’s not like they haven’t invested any money into the home to improve it. If they spent 20K in improvements and they sell for $419K then their rate of return was about 6% per year.
56
Alan
// Feb 23, 2008 at 1:28 pm
New flooring, new vinyl windows, new gas fireplace and air conditioning are depreciating assets. They should be losing, not gaining, 6% a year in value (where 6% is an arbitrarily chosen figure).
It used to be expected that most home improvements do not give a positive return on investment.
57
local Realitor
// Feb 23, 2008 at 6:01 pm
Yawn….. Ira. When are you gonna stop yapping the same ole same ole about how tired you are hearing other realtors are saying this and saying that and how you are soooo in bed with the bubble busters on this forum. Be a man and say something new and original. Even Dr. Pepper has better spiel than yous.
58
Ira Sacharoff
// Feb 23, 2008 at 8:56 pm
Actually local Realitor: I’m NOT tired of other realtors saying this and that: I find it entertaining. …But the fact of the matter is that some realtors should be bearing some responsibility for the mess we’re in, as well as some lenders and appraisers.
I’m not saying that buyers also didn’t have some responsibility : they didn’t have to buy, despite the pressure of ” buy now or be priced out forever”.
On a personal level, I like real estate agents. I don’t always trust them, and for good reason, but they are generally more intelligent than most people here give them credit for…As for boring you…go ahead and skip my posts if I’m putting you to sleep.
59
JJL
// Feb 24, 2008 at 11:42 am
Alan,
You’re on drugs. Yes, windows and flooring wear over time, but adding gas fireplaces and air conditioning are upgrades and add value.
Just as a new roof is considered a “maintenance” item - in that every home needs a roof.
And since the inflation rate is around 4% - their home only shows a net gain of about 2% over their orginal purchase price.
Twist the numbers all you want. The market wil erase all the gains from 2006 & 2007 and we’ll have a new starting point for home values - from there we will slowly increase - not decrease.
60
Alan
// Feb 24, 2008 at 11:50 am
No doubt that adding gas fireplace and air conditioning add value. But historically they add less value than it costs to install them.
61
mark
// Feb 24, 2008 at 1:28 pm
JJL
Read a little closer, the only things that are listed as new are the windows, and flooring. And as far as that goes, does it mean that the sellers are the ones that added those items? They had only owned the place for a little over two years when they put it back on the market. Those durable items could be considered new if they were only a few years old.
The main point of my post was the original price of $469,950. That is quite a jump from the $349,000 they paid in Feb. of 2005. I ran across that little gem from a discussion board on Zillow posted in Aug. of 2007. The owner stated at the time that they had their home on the market and that they had bought another place in Woodinville. She stated that home prices were still increasing in her neighborhood. I’m sure that she was being honest - the real estate market had just turned south at that time - only they had realised it yet.
It looks like they made a decision to buy another house with the thought of selling their original quickly and for a fat profit. The reality appears to be that they were stuck paying for two mortgages for two houses for around 8 months. It finally occured to them that to get out from these two payments they needed to reduce the price on the house for sale by $40,000. Ouch. They probably paid somewhere in the area of $20,000 in mortgage payments to carry the first house until it sold.
That looks like a fair amount of pain for someone to endure because of our out of whack real estate market.
Jump to the top of the comments. ↑
Leave a Comment