The credit crisis and the housing crisis has now been with us for one year. We are still not officially in a recession, but more signs keep pointing that way. Maybe we should just declare it a stagflation, and be done with it. Financial institutions are failing; we are in a bear market; and we face rising costs. The current administration has made it clear than industry should be assisted, but individuals should not be, but it has been forced to help the little man. What happened to the idea of compassion which they promised?

In the midst of this climate, I was struck by a couple of articles and websites which I encountered in the past week. I could place the word “hate” in the title, but it is not quite there yet. I came across two blogs by Realtors who are using the same tactic to reach consumers. They state that they are insiders who are going to blow the cover off of the industry, and they only way that you can get to the truth is by trusting them. Looking through their sites, I found little in the way of inside information. In fact, most of the data provided is much the same as other Realtors, except that they SCREAM IT TO INDICATE IT MIGHT BE A SECRET.

On the other side, I find Realtors who take offense at any comment which they feel may blame Realtors for our current situation. I have seen many defenses of their profession, so obviously they feel under attack. What I really notice though is that the Realtors who are busy working seem to ignore such situations. They are simply too busy to care about some comments. They seem to take them for what they are, which is often not an attack of the industry. However, these Realtors are not often on the internet, so we hear the voices of those who have time to spare.

Then I read a newspaper article regarding the downfall of a title company, which lost funding from banks. Sixty employees in Houston have lost their job. Another large title company reported losses this last quarter. I think of the workers who face increased cost of living with no income. Unless they have skills compatible with the petrochemical industry, a job will be hard to come by. At the end of the article, there were comments of glee at the failure of this firm, claiming that all title companies were fraudulent. There did seem to be some misunderstanding about what a title firm does. On various blogs, I see this sentiment coming through to different degrees, but I do not think the public at large has the same feelings.

The real estate industry does have some problems in the way it operates. I recently have been dealing with a mortgage lender which seems to be trying to set up for a liability. After I declined to make statements in a report that they requested that I include, they made several requests which questioned my abilities. I am conscious of the fact that I may cause my clients to loose their loan, so I have been trying to comply while not hurting my business or my client. I think of appraisers who were faced with the same situation under pressure by lenders. The other issue should be a clear understanding of the fees involved by the various parties involved in a transaction should be openly disclosed. Most professionals will do this when asked, however, the general knowledge of the economics of a deal are not comprehended by most buyers and sellers. I think that there is room for improvement in that field.

I wonder if internet brokerages and the increasing number of foreclosures will help change the industry. The industry does have to look at itself, while finding a way to lay bare how it works.

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Tags: credit crisis, real estate
This entry was posted on Friday, August 1st, 2008 at 12:09 pm and is filed under For the Buyer. You can follow any responses to this entry through the RSS 2.0 feed.