Gloom and Doom?

This post is a little earlier than intended and I'll get to the points I wanted to make in a minute, but first, the evening news just came on and true to form a report from Moodys predicting the end of the world as we know it, at least the real estate world, came in for prominent attention. In one of the markets we serve, Chico, actual predictions of the probable percentage home values will decline in the near future were offered up as fact. They did say also, however, that they would go back up again. Amazing. I hope someone has the time to delve into the track record of Moodys' predictions for perhaps the past decade or two, just to see if their accuracy is sufficient to cause us to commit suicide, or perhaps just ignore the whole sorry bunch of these doom and gloomers. If you think of buying a home as an investment vehicle, much as you might consider buying shares of stock, then listening to the gurus and seers peddling their tip sheets might be interesting to you. Interesting, but probably not profitable,since if these people knew what they were talking about they'd be doing it profitably instead of talking about it for profit. To say again what I've said before. Right now, interest rates are as low as they have been all year, hovering around 6% for 30 year fixed rate mortgages. Gas prices are low. Opec is threatening to reduce supplies because crude prices are dropping too low. Employment is stable. Home prices are stable. If you want to buy a home to live in and call your own, this is as good a time as any. Is it tough for many people to qualify? Of course. It always has been. A home is a very expensive commodity and requires some maturity in employment and financial management and ability to plan to bring the dream to fruition. A responsible real estate broker and mortgage broker can help with the planning and offer some guidance in financial decisions, but the basic maturity has to reside in you. It's not possible to gloss over the fact that there are some serious problems in real estate, and the real estate industry. Real estate people and mortgage people have helped create a mountain of debt for a great number of people by pursuing their own interests rather than that of their clients. An in-depth look at one aspect of that problem is examined in a recent Business Week article. This office has never placed a client in an option arm mortgage. They are a vehicle which can damage even the very sophisticated, and our business is primarily aiding normal family homebuyers or sellers. We think, and this "we" means every member of our organization, we think that there is no amount of commission income that would justify using our knowledge or our license status to put a client at risk. Period. And that finally brings me to the real reason for this blog.
Reading blogs from other real estate people indicates a serious attempt to denigrate real estate offices that don't subscribe to the classic percentage business model. Flat fee offices and discount offices are equated with limited service. As with all arguments some element of truth is assumed to make the whole argument true. Good debate strategy but bad logic. Some flat fee brokers do indeed do nothing except put the listing on the mls. Some discount brokers do indeed offer limited services. However at least one, namely us, and I'm sure there must be others, offer the exact same level of service as the best in the industry in both the flat fee listing, and in the cash back to buyer. No one does more than we do, yet we list for a flat fee for the sellers and when we represent the buyer we give back the equivalent of 50% of the commission we receive. Conventional brokers spend a lot of time trying to teach their agents how to sell the value of their services to justify the high commissions they require. We provide the exact same services for less money. More actually, because we're a mortgage broker as well. If you haven't already, visit our site and look around. Thanks for visiting.