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Do you answer questions outside of your expertise or market area?

answering questions

Do you think you are helping the situation, but actually hurting the situation by answering a question??

I am sure many of us want to help answer a question, giving our honest opinion and such. Hoping that it could give some good insight to helping that person with their question. But how many times could this actually turn against the person seeking help, answers, and some guidance?

I bring this up, because I signed up for Trulia questions a few months ago, and I see so many realtors answering questions that should be handled by a professional loan officer. And I am sure that there are some loan officers that answer questions that should be handled by a realtor only. But what about those that answer questions asked by someone in a specific state, but someone 1,500 miles away gives an answer, but it could be different because of the market area??

Here is the question that was stated on Trulia...

"If the appraisal comes in lower than the offer price why would the buyer pay the difference if the price is lower? For instance, if the house is offered at 150,000 and the appraisal comes in at 140,000 and the seller does not want to lower the price, why would the buyer not benefit from the lower price, why would he put more money down on a lower sale price?" - From Homebuyer in New Jersey

Here is an answer from a realtor in Texas.....

"In this market I really will not recomend you to pay the difference between the appraisal value and the sellers asking price, negociate with the seller if they do not want to lower the price, get another property, This is a Buyer Market. There are a lot of properties available in the market."

making a list of items

I have a few problems with this answer.

Each real estate market is different. - in some areas of the country, prices have bottomed out. In some areas, prices are expected to go down another 5%. But there is no guarantee of both. And what about values increasing in the next 5 years.

You need to have goals when buying. - How long do you plan on being in the house. Are you buying in area to be in a good school system and baring any work related transfers, could you be there for 4 to 10 years because of your kids? Are you moving up, into a bigger home, need the room. Are many of the homes in the area, smaller on average, so you love this big home?

It's a buyers market, with many homes on the market. - This realtor said this, and said don't buy, look at other homes. Again, each market is different. And we need to remember a few things. This could be the buyers dream home. When collectors buy coins or diamonds, aren't the values determined by those that give their opinion? What about appraisers? Don't the buyers usually dictate the price in many cases? Isn't the value determined by an appraisers opinion, using comps of other like sold properties in the area? Keeping in mind that not one house is the same.

What about comps or the subject property. - How long has the property been on the market? Does it have an unique feature? Is the property hard to comp? Do we know what the seller needs in order to sell the house?

Conclusion : Sure, negotiating with the seller can be a good thing. You could get a lower price. But how much do you really want that new home? What if 5 appraisers appraised this home, 1 that came in 5k more, 2 that came in at the asking price, and 2 below the asking price. What happens if you got the appraiser with the lowest opinion that ended up with the lowest appraisal.

As I mentioned, you need to have goals, even though they can change from time to time. In many cases, you shouldn't be buying a home just to buy, right? And what about those realtors that give answers to a FHA question or a mortgage question? Just because your loan officer told you, doesn't mean it could be the right answer. In fact, I have read many misleading answers to mortgage questions..... even by loan officers. As a person asking questions, just beware... do your research and be careful.

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Posted by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans on 08/31/2009 06:45 AM

Comments (74)

Answering Questions in the Networking Channel

answering mortgage questions, answering real estate questions, misleading answers, fha loans, fha mortgages, mortgages, real estate

Originally posted at: FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware: Do you answer questions outside of your expertise or market area?

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74 Comments on Do you answer questions outside of your expertise or market area?

AUG

You are so right, Jeff.

We see it all the time on Trulia, and other forums, where "professionals" offer contract advice without seeing contracts, often without knowing in what state the transaction is. Or, purchase, inspection, negotiating advice without a clue as to what they are talking about.

And then the buyer, or seller, is filled with misinformation that their long-suffering local agent has to muddle through...

THANKS JEFF! I almost jumped out of my bed and through the TV the other night when a show called "Happy Hour" on Fox Business channel was talking about how "it's a buyer's market with 7.5 months of inventory and fantastic bargains for buyers". Then they went on to explain what a buyers market is and how they should be placing offers.

ARE YOU KIDDING ME?

Our market has only 2.5 months of inventory. Total. Period. End of story. Most of what is available is UNSELLABLE short sales!

Can they make my job any harder?

NOW, we are dealing with prices being pushed up and I am taking buyers that ONLY have cash reserves and are willing to PAY ABOVE appraised price. Otherwise there is no deal.

Appraisal contingencies are being waived in our market RIGHT NOW.

I avoid these forums like the plague. One reason is AGENCY. It could be IMPLIED AGENCY for a Realtor to give advice to another Realtor's contracted buyer.

Of course the best way to answer this generally to a buyer is: As a buyer's agent I would work on a price reduction first. Currently in our market, it is unlikely since many sellers are requesting a WAIVER of the appraisal contingency. We would then look into an appraisal review. If that doesn't go through, the buyer would then have to consider whether to pay the difference between the sales price and contract price in addition to their down payment and closing costs.

Jeff, Yes lots of less than great answers from all sorts on Trulia and other RE sites. Of course, I always wonder about the folks that asks questions on such a public forum.

Jeff,

I too signed up for Trulia questions. After seeing some of the answers by Realtors I now view it as a lawsuit waiting to happen. The wrong answers to some of the questions is amazing.

Rich

MIKE... . I saw it a lot here on Active Rain when they first opened up the questions and answers forum. I stopped even answering after the first week, because it was like a train wreck. Many answers were just misleading... many from out of area... some bogus... and in my opinion, it was just a mess. Then AR when to like a "pay" type of question/answer thing. I thought, why should I compete with answers that were misleading or advertising like. Overall, I think many of us will agree on this.

RENEE.... . TV in my opinion is even worse. In my opinion, many of those starting these types of shows have no clue about the market. They are just capitalizing on a market with misinformation. And just as we are humans, we tend to believe much of what is on TV or what is written online or in the paper, because it has been published.

In regards to avoiding these forums? As mentioned to Mike above, I did avoid AR's when it first came out, even checked it out a month or 2 later, and it was still a train wreck. I thought I would try Trulia's out, to participate in a few other forums. Not only is it a lot of work, but I found many of the same people answering questions, were always first and always around. Gee, that takes time, so I guess they aren't busy with real estate or mortgages. And I have seen some realtors give info about FHA mortgages, but what they have heard from their loan officers. And this angers me, because 50% of the time, they aren't even close.

Overall, you made some good points about the difference between contract price and sales price. thanks for your feedback.

GABE..... . funny, I wonder about some of these that ask questions also. But I try to ignore that and wonder who was helping them to begin with.... or why ask a specific question as they did, if they are that far into the process. And I don't really care for many of these types of forums, but I thought I would give it a shot from time to time. thanks

"In this market I really will not recomend you to pay the difference between the appraisal value and the sellers asking price, negociate with the seller if they do not want to lower the price, get another property, This is a Buyer Market. There are a lot of properties available in the market."

Jeff, I agree with the Texas REALTOR. I also agree with Renee. Real estate is local, remember location, location, location!

The question is should you give spefic answers to general questions on a public forum?

Bill

Those pesky appraisals. Darn them.

I've had a few come in lower, but not many. It is usually the 5% declining market that brings them down.

If possible the sellers meets the appraised price. If not they have split the difference.

Lots of things to be worked out, but the question is "do the buyers like the house and want to make it home?"

I like Trulia Voices but over the years have gotten to where I only answer local questions, PERIOD.

I see this a lot on trulia.

We have some unique lending rules in Texas..... Including, but not limited to, community property effects on FHA loans.

Yet, these little eager beavers continue to give false info.....

RICH.... . how could it not be a lawsuit waiting to happen. And I agree 110%, that some of the wrong answers are truly amazing. In regards to the specific answer above... sure, I am sure we could get a panel of 10 experts, and have it split 50/50 on the answers. Gee, anyone can call themselves an expert today. I think the true expert is the one that breaks it down, from both sides of the fence, giving answers that support both sides. And that is what I tried doing in my answer, so that person has an idea of what they should be looking at. Thanks

WILLIAM.... . question to you then. How can you agree with that realtor if you don't know one single goal of that buyer? You just said it yourself, that you also agree with Renee, that real estate is local. Yet you have a realtor from Texas giving a buyer in New Jersey advice, when that real estate market could be very stagnant in properties losing values in the near future.

I do agree with your last statement, which is what I thought I implied in my blog. But I don't agree with that realtor from Texas and it's funny, another realtor just left an answer this morning, and at the end, agreed with my statements. I just think that answer is a poor answer to a very general question and because of how appraisals work. And you said it yourself, giving a specific answer to such a general question. thanks for the feedback.

MISSY.... . yes, in many cases that I have seen, the buyer and seller split the difference. I just had one under appraise for $5,000 and we reduced the seller concession by $5,000... and luckily the buyer doesn't need any more money, because of how I did my good faith estimate and because I picked up some of the costs.

Overall, yes, lots of things to work out.. but the statement that you made, "do the buyera like the house and want to make it a home?"... that should be one of the biggest questions, in which can answer the general question above. Just like when someone might buy that old car that they fell in love with, but it seems to be just a tad higher than what they thought it would be worth. Well, they will buy it anyhow. I have a client in Long Island that just bought a house, who even said to me, if it appraises for a little less, I am still going to buy it. These buyers have been looking on an off for 6 months, and they LOVE this house and want it... PERIOD... thanks

TOM..... . those damn eager beavers... lol But I agree, they do continue to give false or misleading info. And I know about some of the unique lending rules in TX. Another good point, because I think out of all the states, TX is probably the most different when it comes to lending. And yes, I see a lot of this on Trulia also.... but I am sure it happens in many forums. thanks

JEFF!!!! THANK YOU THANK YOU THANK YOU for bringing this up. EACH MARKET IS DIFFERENT. I have been irritated with answers from different parts of the country -- I understand they are trying to be helpful, but THE REAL ESTATE MARKET IS LOCAL. I have one buyer who has lost out on THREE houses because of MULTIPLE CONTRACTS (this last one had FIVE!). Yet, when a question was asked in my market area on one of these sites, an agent from a different area recommended they "get a steal in this market".

Some areas ARE depressed. I understand. But for someone to tell a buyer in a DIFFERENT AREA that IN THIS MARKET...ACK! Our market even varies town by town -- what is true in one area is VERY untrue in another.

I understand wanting to help, and wanting to get POINTS (just like here! ;-) ), but PLEASE, unless you ACTUALLY KNOW the market, PLEASE don't advise on it.

THANK YOU Jeff, for bringing this to AR! :-)

"get a steal in this market"

LOL.... I bet those people sell like 2 houses per yr

Each situation is unique and different. I have a problem with someone who chose real estate as a profession not being able to spell negotiate. Or are too lazy to hit the spell check button. I'm with Burris, but I think that Tom is being generous at best. If they sell 2 homes per year, then they're lucky. I'd want to "go off" on this person, but this is one of the times that I'd probably choose just not to engage. Nothing good can come out of it. My .02 cents.

Jeff,

It's an interesting contradiction, isn't it?

The Texas REALTOR® gives the classic and still excellent conservative advice! Very few people should pay more than appraisal, fewer still can afford to.

You can never get into trouble with classic conservativeism, but some times it's hard to successfully excel with such constraints.

With out questioning the validity of the appraisal there are few reasons to pay more, but we are in the people business and homes should be bought from the heart when the buyers can afford the luxury of choice. Renee says: "

As a buyer's agent I would work on a price reduction first... If that doesn't go through, the buyer would then have to consider whether to pay the difference between the sales price and contract price in addition to their down payment and closing costs."

Don't over pay, remains good advice in all markets. If this is an investment it should be absolutely don't! If this is a HOME and the buy can afford it we have to consider the people factor and consider the emotional factor and Renee did say "Consider!" every thing is relative. There is always more than one way!

You seem to validate the Texas REALTOR'S® position with: "when that real estate market could be very stagnant in properties losing values in the near future."　

People say don't for many reasons, the most common are:

It's the right advice!

They don't want you taking any risk.

They don't want you succeeding where they don't.

There is no down side, to saying don't! (If they say "Do" and you fail they feel libel, but if you succeed they can simply add "you got lucky!")

Don't is always safe advice, what we forget is man has never had great success with out doing, with out risking great failure!

Why are you surprised that I stated what you implied? By now you know I only debate with those I respect!

Bill

Jeff - I know what you mean about the forums. And then it only confuses the buyers even more with conflicting information

Jeff,

We all need to stick to our areas of expertise. If you want to know if you qualify as a first time homebuyer, check with the IRS. If there is still gray area, check with a CPA or tax att'y. As an LO, I shouldn't get involved. If you bought a home and did a cash out refi and then it went to foreclosure, can the lender go after you personally? I think I know the answer to this one, but I will always tell someone to check with an att'y. This is a good post because it reminds us to stick with what we are paid to do.

Patrick

MARNEY... . my pleasure... and yes, first off, each market is different. Someone even pointed out that neighboring towns can be greatly different. And you have to love those that state, "get a deal"... this keeps getting planted into other people's minds and can really screw up a transaction.

TOM.... . lol... I guess great minds think a like, since I picked up on Marney's comment also.

LARRY.... . lol... I picked up on the misspelled words either... but come on, I am human also. To me, that is a minor issue and what shouldn't be over-looked is the actual comment and the message being delivered. But you are right about nothing good could come from it, if you attacked this realtor. I didn't do that. In fact, you should read the next comment, that got me laughing... Next comment on Trulia. The comment in question is by William H.

WILLIAM... . very conservative, in which you make an excellent point about. It's advise based on no risk at all. But does it mean that it's the right advice? Or even good advice? And even if you are buying a home that you like, it's still an investment. Yes, I understood what you meant, but to me, that word investment only should be for those that buy properties as an investment. But I also know investors that buy in an area, thinking that values will increase. But this goes back to risk. In any case, thanks for that polite compliment also.

In regards to this comment of mine.."when that real estate market could be very stagnant in properties losing values in the near future." - that goes back to a realtor from Texas that truly can't understand and know about the North Jersey market. Her statement in my opinion is a "blanket statement". thanks

NAOMA..... . yes, that good old "conflicting" information. It seems to plague me often and follows me... lol Just yesterday I received a phone call from a borrower that is using a broker who is selling to B of A. It's a 600k purchase price, FHA.. it needs to appraisals... and the 2nd one came in about 100k less. Yet the broker told him that they can't choose their own appraiser... but wait, that is for HVCC only. And there is more to it, yet this borrower hasn't followed back up with me. He is just going off of this broker, which is sad... because why not take this to another lender then? lol thanks

Jeff,

There are fewer AR members still answering every question posted but it still happens - even with "local" questions. Seems these folks are trolling and hoping to get a referral fee from the person who could've/should've handled it in the first place. BOZOS!

We had another real estate agent comment on Trulia about one of our listings as to what it would cost to finish out a shell home - He was only about half off the actual estimate we had in writing.

Excellent point about the comps. We have seen this happen too often lately that the comps used are not good ones. With the HVCC you could end up with someone brand new to completing appraisals and not one that finds valid comps for a neighborhood. The lender wont question the appraised value in many situations. I'm sure that the realtor that answered that question felt they were providing good guidance. If they are not in that market though, I think they should not be allowed to answer the question. Those questions/answers are really set up to put two people together, I think. So, the person should stick to their market area, as you have pointed out.

PATRICK.... . well, with your comment, it's the old saying... if you need advice or surgery on you leg, you go to a specialist, not a pediatrician. And yes, I think many of us need this reminder, because so many of us are very helping in nature. I am not worried so much about the legal ramifications, but some of the misinformation that is put out there.

IRENE.... . very good point. I didn't even think about that. I guess because I don't think that way. WHy would a realtor from Texas chime in and make a comment when the question is coming from someone in New Jersey. lol I didn't even think about the referral fee aspect of it. This part just kills me. Again, I know many people are nice and want to help. But why would I take my time from TX, to answer a question, if I can't be their realtor. hhhhmmm... referral? lol

LEE & CAROL.... . I am trying to follow that one. Was this person local or not? Was it just for the fact that they weren't close in their estimate? Where you even asking for estimates from other people? I guess that is the part that confuses me.. or did they just volunteer this estimate. thanks

JOHN.... . hence kind of the reason why I decided to write this. Please read Irene's comment, comment # 17.... she kind of brings up an excellent point about what you talked about. My question would be, why would an agent reach across so many states, to answer a question? As Irene pointed out, to be there, to possibly get a referral? Interesting... thanks

I cant see it really benefiting someone to answer a question so far away. The chances of them receiving a referrals fee is pretty slim, especially because its such a small interaction. On the other hand, what if someone in that area is not signed up to answer the question in that area? Should the customer go without receiving a response? If I came across something that I could answer, chances are pretty good that I would answer it even if there was nothing in it for me because I would want to be sure the question was answered and answered correctly.

Jeff,

You are right on the money with this one.

So many people seem anxious to provide a sudden instant response that they can't contain themselves.

I run into this issue quite a bit in law. I will express an opinion about Ontario law, but only if I know the answer.

However, I see that that doesn't stop others. And, it's much the same no matter the area of expertise.

Brian

Jeff,

Excellent point. I always tell my clients that although we will walk through a certain set of steps to get to the final result - each real estate transaction is unique and has its own set of questions and answers. I'm busy enough answering questions for my own little neck of the woods, not the least bit interested in answering for a crowd.

Michael

Jeff:

As a New York State Certified appraiser, I would not offer specific advice to someone outside my area of expertise. However, some general advice which might be useful in this case might be to seek a CMA, second appraisal, or an appraisal reveiw from a LOCAL expert.

While I have found many in the AR community offer sound advice to the audience at large, I find that the value of a free opinion can sometimes be equal to what you pay for it.

JOHN.... . yea,but not everyone has common sense. I could see a realtor or loan officer doing this, hoping for some type of business or referral... OR... a borrower that just doesn't know any better and will think that the answer sounds good... or that the person is very nice. Who knows, but I am sure some people get business from it. Hence why I hardly answer these questions now... I do think it's a waste of time, because I am sure many of these people already have someone picked out, just looking for validation or other info...

BRIAN... . I don't think these types of forums will ever stop anyone... people will answer, even if they aren't sure, but think they might be close. And to me, that is just not acceptable. And if you think like this, make that statement in your answer. Or say, this is my opinion. I am big on that. thanks

MICHAEL... . I wrote a blog a while back, not one borrower is the same... and as you stated, many questions and answers are different. And about those that answer questions half way around the US... it still amazes me... why do they even have those alerts set up, for other states? That is what I am really curious about. and thanks for the compliment.

JESSE.... . general advice, sure... and some could argue that she gave general advice... advice not to buy this property... I think it was a blanket statement, with no better advice or input.... feedback. and yes, free opinion could be equal to what you pay for.. free could equal the death to you...

Jeff - I am set up to receive email alerts when someone asks a question on Trulia and am amazed #1 at some of the questions that people ask who appear to have an agent and #2 the replies of the agents who answer them who are most times not only out of the area but on the other side of the country.

If I am not 100% certain of what the answer to the question is, I don't answer it. Some of the questions are so far out there I wonder if there might be a hidden agenda from the so called "consumer" who is asking the questions.

Jeff -

As usual, great, thought-provoking post.

A few years ago, i overheard an agent in my old office "advising" a client on how to do a 1031 Exchange. The truth - he never did one before, and had no idea what he was doing.

They ended up going to a traditional closing, the buyer took control of the funds, and voila - a $40M tax liablity next April.

Hell, the BROKER didn't even know what was going on.

The next chapter, 2009 style - short sales. Every body thinks they know everything. But, in realty, most know NOTHING!

Thanks so much for the share!

DEAN & DEAN'S TEAM CHICAGO

Jeff,

Great post! I agree with Dean. The next chapter, 2009 style - short sales. I just wish that the person interviewing the agent would even think to ask how many short sales a person has closed. If most of these agents gave the honest answer, "I'm hoping yours will be my first" Perhaps the homeowner may turn and run the other way.

Jeff,

Not only that, I get the questions from Trulia too, and I see agents NOT EVEN LICENSED in my state answering questions from people who are asking very local real estate questions. If I would answer out-of-state questions, at least I'd write: I'm licensed in Oregon, or some other disclaimer.

I've read agents answers and it's OBVIOUS the person asking is in a contract to purchase. I don't touch those with 10 foot poles.

Or . . . the agent who is asking "How do I . . . ??" (whatever) . . . hmmm . . . don't you have a BROKER you can ask? Geez . . . I hear ya man!!

DONNA... . yes, that amazes me also. But what kills me the most, are those agents from other states that have these same alerts, and still answer the questions. I just don't get it... I know many like to help... but when I am answering questions, I am hoping for business also. So how can a realtor 10 states away answer a question... and especially expect business??? thanks

DEAN.... . I remember when many realtors and even loan officers, where jumping on the 1031 Exchange bandwagon... and so many didn't know most of what it was about and how it worked... and yes, I see the same with short sales... I see the same with FHA mortgages... people think that if they put expert in the same sentence, that will get them tons of business. Or, the consumer truly thinks this person is an expert. And thanks for the polite compliment.

SAL.... . that would be a good point, if that person answering the question would be honest also. I have heard loan officers tell their clients that they have closed 1,000 of transactions, yet I know that they haven't even closed 100 loans. Yes, some of us are honest and have integrity... but there are many on the opposite side of the fence. and thanks for the compliment.

CARLA.... . I agree and I hardly ever see any disclaimers as you have mentioned. It goes back to, what I don't tell you, you don't or won't know. And yes, another good point... don't you have a broker to ask those questions. But most of the questions that I read are from actual borrowers. thanks

I am a Texas agent, but 2 years ago I was licensed in Illinois and Wisconsin. The practice of real estate in each state is quite different and the markets are vastly different. I don't answer questions outside of my market, but I do point out to agents the differences that may exist in the laws of each state. It is frustrating that some are so short sighted that this is not even a consideration before they write a really rediculous reply.

SEP

This is another quirk with the Internet. Without the Internet I don't think the buyer in NJ would have called someone in TX to answer his question. There is so much information readily available that much of it is bound to be mis-information. We can inform ourselves and protect our "local" clients but we cant always stop that guy from buying a bridge in Arizona.

The Realtor's remark was like saying someone is a murderer becasue there are eyes are too close together. Even with the expertise, the answer can only be based on asking questions, getting more information, and relating it in a hyper-local manner. I think I am going to post on Trulia the question, "What is the meaning of life?, and see what I get back.

That is pretty funny Jeff. But back to the mispelling. I make errors and you do as well. Inside this private community of Active Rain, that's one thing, but if you're putting your name to something for the world to see, I do think that a realtor who is serious about their business would make sure that they know how to spell "negotiate" otherwise the client "cood sine a bad kontract." Not sure I want that as my rep. You????? Thanks for the laugh dude.

Not just in the Internet. . I see Realtors sometimes stepping out of bounds by advising their clients about bankruptcy and finances in general. . .we have a license for real estate and that only applies to real estate

Jeff - When I used to spend more time on Trulia, people would ALWAYS be aswering questions out of their area, both geogrpahic and expertise (if they had any) - just to follow up with ... "Call me blah blah blah". That is one of the nice things about AR, if you post crap most often you will be found out since there are so many real pros on here.

OH definitely...you've got to know when to back away and fold your hands in your lap, shut your mouth and wait for the real expert on the subject to answer... there's some saying that our teachers used to say about "just sitting there and letting people wonder if you were stupid, or opening your mouth and proving that you really are stupid"... We would say it in a less rude way today, but you obviously get the point ;-)

I am licended in New Jersey and would not provide real estate guidance/advice out of New Jersey.

One thing to consider is that there are different real estates laws for each state so a realtor or loan officer in one state may be giving illegal advice in another.

CAROL.... . yes, many states are different, especially some of the market areas. And yes, I agree, that there is no consideration on their part before they write their reply.

JAMES.... . well, the buyer in NJ didn't call the realtor in TX.. This was a realtor from TX that responded to a question from a potential buyer in NJ. And no, we can't stop people, but we certainly can educated them.

JOE..... . very good analogy, I like it. Just as lawyers put experts on the stand, you still need an explanation in order to make your point. Let me know if you put that question out there, I think that would be funny. thanks

LARRY..... . I do not make errors... who told you that... LOL But I would agree partially, that in any forum, you would want to act accordingly and write professionally. I have seen much worse.. and it shouldn't make it okay if it's on AR or any other forum.

FERNANDO.... . I agree... I have seen both realtors and loan officers give advice when it comes to bankruptcies and other things... scary... especially when the consumer doesn't search deeper and just takes their answer and runs with it...

STEVE.... . true, good point. I am finding Trulia for the most part to be a waste of time.... I had 1 person contact me back... but the answers themselves scare me to death... how they are all over the place...

CHRISTINE.... . yes, I get the point... and I can see the teachers perspective on this. Interesting... and it makes sense to a certain degree. thanks

CATHERINE.... . well, that's good to hear. But I see so many others that seem to have alerts set up from all over the states... it truly makes me wonder what their thinking is... did common sense jump out the window? lol

I think a lot of people want to seem more knowledgeable than they really are and give advice when it is not in anyone's best interest for them to do so.

I'm very careful when I offer online advice to make sure that what I say is 100% true.

Jeff - I am always surprised to see where the answers to some of these questions come from. As you mentioned, it's hard to imagine that REALTORS in other parts of the country are well-versed in Louisville market conditions or Kentucky real estate law. I know I write killer market reports, but... :)

I imagine someone will cross a line one day by giving general advice that turns out to be really bad for the specific situation and it will cost him or her.

I started on Trulia as well and I agree with you Jeff. Many questions pertain to the loan and many Realtors answer these questions...incorrectly.

What is very good about the sight in my opinion is that it really helps you understand what people are thinking about when it comes to real estate in your area.

It is a different perspective from ActiveRain.

I agree with your post. So many try to be an expert at everything and never truly get it down. Focus your attention to one thing and become the best.

DARRELL..... . I agree 110%, hence part of the reason why I wrote this.. thanks

DAMON.... . maybe a Cliff Clavin? from Cheers... yes, I know a few, that must come across as knowing everything. I think it's better to say, let me find out, if I am not sure.

WILL.... . that's good to hear.. but in many cases, more than 60% of the answers that I read, I don't get that same feeling. It's very scary out there...

ERIK.... . I believe that you are exactly right.... and as someone mentioned, it could be extremely different just in the next town over... and if you don't sell in that area, how would one know? What, from hearing from others? Not a good way to spread information, which is a way that so many give out info. I see many realtors give mortgage advice based on hearing it from their loan officers. 2 wrongs... first off, how do you know that loan officer is correct. Secondly, if you tell it slightly wrong, it becomes misinformation.

JANET.... . in all honesty, I don't like the site at all. Yes, I love getting different perspectives. I am not sure about California, but I see many realtors answering questions that should be answered by a loan officer. And in my example above, I see many out of state realtors give answers to state related real estate questions.. I just can't believe that they think this is good... and nobody really polices these sites... it's just very sad, and that Trulia uses this for their data base and for google juice.

NICHOLAS..... . bingo.. I agree... if not just one mortgage program, but become an expert in your field.. thanks

Jeff, I am probably in the other camp on this one. I am a lender too and while I do agree that we should not cross over into an Realtor's territory to answer a question best left up to a Realtor to answer I do think if a forum like that is open and an answer to a questions like that is solicited then the answer given can be posted. It should be taken with a grain of salt sure but that advice in general to the question you posted was not the worst advice I ever saw. Granted it totally leaves out the important point of locality of the particular market in question and how things are moving but I think 8 or maybe even 9 out of 10 people would not pay full price for a property that appraised under value by 7.5%.

I will definitely give you the benefit that it depends on the market in which the property is located and local declining or non declining conditions and other factors. But the problem is all answers to questions in our field are not clear cut. They always depend on a myriad of different factors. I could never even give an answer to any question under that premise. What a can of worms that can open. Great thought provoking post. Thanks.

I wish people understand it's market by market and a blanket answer never fits the situation.

SEP

MICHAEL..... . that is my whole problem with that, that it's a forum for anyone to answer questions. I have even seen real estate questions that realtors answer and they are wrong. That is not my point... please read the comment below from Heather... In a nut shell, that answer by the realtor in my opinion is a "blanket statement".

In regards to your statement, that the answer wasn't the worst advice... okay, I will give you that. But it was the type of answer that most would give with the least amount of risk. But many other factors aren't mentioned or brought up, and that is the part that ticks me off. I feel that my job is to educate, to show both the negatives and the positives... to be transparent and not give your personal advice. Sure, it's easy to pick one side or the other... but I have become very successful with my clients because I show both sides of the fence. That is just how I work. Overall, thanks for your feedback, input, and for the compliment.

HEATHER.... . I agree 110%, hence why I wrote this... and defined my frustration a little more in my comment to Michael, above you. thanks

I guess if you live outside Vegas and are not a gambling person the advice to look elsewhere is right on target. Mortgages are hard to come by....700+credit scores and 10%+ cash......many people don't have a spare 10k to gamble with.......now if it were 4 years ago.......one would just throw it in the mortgage and be done....or just raise the price and ask for closing costs.......appraisals are what got this country into the mess we are in!!!

Glad you brought light to this situation. It's bugged me for some time, now.

You know, if Trulia could make one little change, it might be to only let agents licensed in a particular state answer questions in that state. The same should go for industries. If you're a mtg pro, you can answer those q's. If not, then move on and wait for a real estate q.

[if Trulia could make one little change, it might be to only let agents licensed in a particular state answer questions in that state.]

Yes indeed.

Real estate is so local and regional.

There has been debate over a 'national RE license' and this is a perfect example of what a disaster that would be.

Even from one STREET to the next in my area, values can dramatically change.

Any broker should be cautious of how they answer questions for consumers in states in which they are NOT licensed.

Scary . . .

So many good points to take to heart!

HI Jeff, I have stepped back from Trulia questions - some of the answers don't even deal with the questions, just a bunch of links to their sites, and many answers are just incorrect. Real estate is so local - and we get answers from other states - totally inappropriate.

No offense but it seems to me that you are commenting on a topic that is outside your area of expertise. I find the agent's response legit because it is prefaced by "in this market." As agents, we do have to know the market like the back of our hands so that we can advise buyers to either pay the difference OR NOT. I see your point about it being on a national forum and probably the agent's response was too brief to be of much help to anyone.

The Realtor gave an opinion, and we all know that what opinions are good for, just look at the HVCC. The buyers asked a broad question, that could not be truly answered properly with out evaluating the situation. An agent could have probably answered the question just as well as a loan officer.

So true. I agree with you on this one. We just closed on a home which was appraised $160,000 less than the purchase price. The buyers wanted the home and realized that the appraisal was just too low and they knew the value of the property. We ordered another appraisal which was higher and the property sold.

What I see really wrong with that answer is that the agent was a politician... he didn't answer the question that was asked. We see that every time a politician is interviewed on TV!

The question was "Why would a person pay more?" The person may have been wondering why a friend or family member did such a thing, or wondering why their own agent was recommending it.

The Texas agent just said "Don't do it."

I agree that the answer was wrong overall - if for no other reason that a Texas Realtor doesn't know the New Jersey market.

But I think the whole exchange points out something important: If we're going to answer any question, we should first listen to the question.

I absolutely agree and have seen and agent in Oklahoma shooting his mouth off about stuff in Brentwood California.

I assumed your article was going to focus on more local issues. I had a client I have worked with locally want to see a Home about 20 miles from here. He asked me some questions. I was very direct it is not my normal area, but went and researched the issues for him.

I like Renee's words 'unsellable short sales', cause that's what they are. But back to Trulia - I don't think that someone of your caliber needs that website answering buyer loan questions. I used to do the same thing and got tired of seeing all the unprofessional answers that were being given. OR, if you like answering the Trulia questions, only answer the area that you are familiar with (state?).

Back to your conclusion - Riddle me this? If the buyer had an appraisal where it appraised over the sales price would he pay more? Hey, why not? Pay what it's worth right?

The buyer can no longer AFFORD to get multiple appraisals now due to HVCC. The last FHA appraisal in my area was $600 bucks which is outrageous! So the buyer no longer gets the 'luxury' of multiple value estimates if you will because gosh - he needs the money for a down payment! In your conclusion scenario that would be around $1500 for those 5 appraisals? Highway robbery!

CRAIG aka SAVANNAH real estate . ..... . you made this statement...."In this market I really will not recomend you to pay the difference between the appraisal value and the sellers asking price,....."

Here is my problem with that statement, hence why I wrote this post. You are making a 'blanket statement'. Each market is different. Gee, even a town over from the other town in the same state and county could be a different market. I'm sorry, but I think that is an irresponsible statement, especially in today's market, and especially without finding out more information about the client and the property. I mentioned this in my blog above. The borrowers goals... what other houses are out there, even though people are saying it's a buyers market, not two houses are the same, period. And as most of us know, appraisals are opinions based on comps and the appraiser themselves.

Overall, just because there are a lot of properties on the market, doesn't mean out of 20 of them, 18 of them would be perfect for the borrower. Maybe only 1 or 2 of them... we need to seriously think about this. I truly think by your statements, that you are just putting people into houses, hoping they just pick one, even if it's okay and not what they want. Sorry, but I have seen realtors actually do this...

One last thing... appraisals aren't necessarily what got us into this mess. I could give you 10 different reasons, each one with the same weight as the next issue. I do thank you for your opinion and feedback, but I think they are statements that one would shoot off blindly in the dark.

NATALIE..... . that's good food for thought and I think I will contact Rudy over at Trulia and see what he says... thanks...

CANDACE.... . a national real estate license per se would be a huge mistake in my opinion. I can do a mortgage in different states, because my main issue is making sure that borrower can be approved, to purchase or to refinance. But as a realtor, how do you list a home 3 states over? Or help someone buy a home 3 states over? You referr out to someone local, hence why real estate is local. thanks

BRAD.... . I agree... I love hearing different opinions, right or wrong. thanks and thanks for stopping by.

VIRGINIA.... . I tried starting something different, trying to answer questions, but it's just out right dumb in my opinion. You are right, many of the answers don't even address the question. And yes, then you have the many links and other advices given, but still not related to the question. So sad... very sad..

DIANNE..... . you made these two statements... "No offense but it seems to me that you are commenting on a topic that is outside your area of expertise. I find the agent's response legit because it is prefaced by "in this market." - AND - As agents, we do have to know the market like the back of our hands so that we can advise buyers to either pay the difference OR NOT. "

First off, I do mortgages for a living and look at appraisals daily. Would you say this to an underwriter that has to review the appraisal? What about those realtors that give a higher value to a property when it's not even worth that much,... even after 3 different appraisals come in 10k lower? Or even the appraisers viewpoint done in the appraisal. So I will disagree with your first comment. I am not totally out of my area of expertise... not if you read my answers. My answers gave more insight and direction... thought and direction. How can you say that realtors answer is good? It's very bad, it's a blanket statement... without knowing more or asking more questions.

Secondly, you said as agents, that you know the market like the back of your hand... this is an agent from Texas, giving advice on a market in NJ. Are you kidding me? They know this market like the back of their hand? That was my main point of this blog, followed byt the fact that I feel like it was a poor blanket statement, that is risk free and easy to say, but with no explanation.

I do thank you for your input.... and I am not doing a realtors job...but common sense should prevail here. Forget that I am a loan officer. Please read my questions or bullet points, to why you need to know more in order to give a good answer. Not opinions, because of what you believe... as I tell so many people, even if I believe in one issue, I try to look at it from both sides of the fence. Not many people do... they think they do, but they don't. This blog is a good example of this and so are many of the comments ... thanks

I just got a contract today..... Buyer paying over appraised value.

Good realtor and educated buyer.

ROY... . I agree, it's just an opinion, but in my opinion, a poor opinion. Maybe a lazy opinion. As you mentioned, a basic opinion, but without truly evaluating the question... and asking questions. As I state, a blind statement of an answer. thanks

ANJA.... . thanks for making part of my point... not all appraisals are the same... they are opinions. Not one house is the same as the next. If you educated the borrower, give them enough info, both positive and negative... it arms them in a manner that will be most helpful. Not a lopsided answer that is yanked from the air per se. thanks

MARTE.... . you make some very valid points. How can one give a basic statement. Ah, as you stated, just as a politician would. Why is this a politician answer per se? Because it's one that is basic, easy, and leads to the least amount of risk to the person giving the answer. So true in politics today... yet so sad... and even more sad because many consumers listen to these answers. I agree, to be able to answer this question, you need to ask more questions, such as I pointed out in my bloig. thanks

GENE.... . yes, we agree. And sorry that my blog didn't focus more on local issues. I wanted to give one example and harp on what questions should be asked, before you can even give an answer. I think that is a main issue with most of these answers, and it scares the shit out of me. I hear it from buyers often, what their loan officers tell them, that is not completely true. thanks

LYN.... . lol... thanks for that polite compliment. I think it was more of a test, to see if I could get business out of it. I truly think it's a waste of time and in most cases, with very weak or wrong answers, because those agents have nothing else better to do. And I will from time to time, just read an answer and some of the questions, hence what led me to writing this blog.

You made this comment... "Back to your conclusion - Riddle me this? If the buyer had an appraisal where it appraised over the sales price would he pay more? Hey, why not? Pay what it's worth right?"

Is it safe me to say that you are saying that this should be up to the buyer? Because they are buying the property, right? And if so, I would agree with this statement 110%. But back to your statement... in most cases, the buyer just pays for what the contract states and if it appraises for more, hey, oh well... better for the buyer. As we know, some sellers sell short, just because they need to get rid of it... or a bank sale or short sale... it could appraise for more.

In regards to your appraisal comment. Sorry if you misunderstood... I wasn't saying to go get 5 appraisals. I was basically saying that if you had 5 done, all 5 could be different in value.. some could be the same, some could be higher, and some could be lower. It's an opinion, kind of like an estimate. Overall, this whole argument about what the realtor stated in advice, I think it was wrong and misleading. Especially since they not only asked no questions, but they don't even know the market area, let alone NJ. thanks

TOM B. ..... . you hit the nail on the head... a great realtor, but more so, that the buyer is fully educated on all aspects of buying. I truly believe if you go over the items that I listed above, about their goals, the different areas, the different houses on the market, what is unique about the house, why they like it... school systems and location...etc, etc Then you pay for what you get. That should be the whole point. It shouldn't be about getting the best steal, even if you don't care about the house. The house is your home... both for living and investment purposes. Just my thought, but it seems a more educated thought than just telling someone not to do it and keep it simple, without getting to know more. I actually think that is laziness and not professional... again, my opinion though.

Hi Jeff, You are absolutely right! I have seen that on Trulia, and other places. thank you for such an informative post!

SEP

We are on the same wavelength on the appraisal #'s, 5 appraisals = 5 different prices. But maybe we should have some competition (?) to just show the buyer how crazy that this can get?

Maybe 2 appraisals on a property and I'll bet my last quarter they will be off each other by a substantial amount. That would definitely make the buyer question the whole system wouldn't it? That's what I was eluding too: Someone needs to question how things are currently getting done. The buyer feels validated when the appraisal comes in - how would he feel if one is $10K off from the other one?

Should this be a "members only" blog; aren't we talking to the public now?

Very true Jeff. Each local market can be very different. I would not be comfortable answering a question such as this one which is in an unknown market to me

SEP

Jeff - More important than price in most cases is the deal a buyer is getting from the lender. I find it fascinating that buyers and their agents are so concerned about price when there are so many other factors that can effect a sale. Great post...have a wonderful holiday weekend!

GINGER... . my pleasure... and it just irks the hell out of me. But I know that this is something that we will never be able to change. thanks for the compliments.

LYN.... . ah, yes, we are now on the same page. Hell, we are in the same paragraph now. ;o) Yes, the buyer then would question the whole system. Hence why I did not like this realtors answer. Because if you really want to get to get down to the nuts and bolts of things... just 2 appraisals could be off... and then what. Which one is correct? What is the house truly worth? thanks for clarifying this.

BEV & BOB... . no disrespect, but no, not in my opinion. I am 110% for educating the consumer. And we are talking about those that are out of area or those that don't give good answers. And I truly believe that the consumer should know this and read this. Question to you... why would I want to hide this from the consumer? Don't we want to educate them? How could this hurt them, instead of helping them? Thanks for asking that question. Would love to hear some of your answers.

MARK.... . I am glad some of us think that each market is local. I just wish most realtors understood this... but I see so many out of state answering questions. That scares the crap out of me. thanks

KENT.... . yes and no... it depends if one is way worse than the other... we would need to put all of this into a spread sheet then. Besides, how do people know if they truly are getting a good or a great deal from their lender. What truly constitutes a very good deal? Just a low rate and little fees? Try and answer that one. ;o) On any case, thanks and you have a great weekend also.

SEP

welcome to cape coral, florida, where if you listen to the national media you may think that you can steal a house here. not so, the inventory has dropped dramatically, and prices have risen. To a certain degree quality comps have not kept up. each transaction should be evaluated on it's own merit.

when out of state buyers are shopping for mortgages and mention they may use their local bank, i caution them that the lending environment here is unique to itself.

JAY... . I can understand because about 20% of my business is done in the Florida market. And what kills me more than anything, when we have an appraisal issue and the realtor is all over my case. Yet I talk to some of my associates in Florida that are loan officers and tell me that I am not crazy, just that realtor... lol SO, I am sometimes that out of state bank, yet I have closed loans in Florida. My most recent one, 3 weeks ago. Prior to that, about a month before the last one. Overall, you are correct in saying that in some cases, comps have not caught up. Thanks for your feedback...

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