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This is what got us into this financial mess!

I drove by a builder's model today on my way to my open house. I couldn't believe this sign. The model wasn't open so I couldn't ask if this is a no-money-down program or perhaps a sweat-equity opportunity.

Even so, the builder is still encouraging people to buy when they will have no equity in their home.

Haven't they learned?

This subdivision has numerous resale homes for sale with many priced close to what the owners paid. They're having to compete with the builder's programs.

What chance do those sellers have?

After my open house, I stopped by a local restaurant to pick up carry-out. While I was waiting, a lady approached me, having recognized me from my blog. (It's hard to get away from this business!) She told me about her mother's home which is listed in another area east of Columbus. Her Mom's home is for sale in the $400's. Her parents purchased it for in the $500's. Her Dad is now deceased and Mom needs to sell even if it means selling at a loss. She asked me what my thoughts were on the bail-out program and whether it would help her Mom.

I didn't have a good answer for her. Will another bail-out program in the future be needed for the buyers who CONTINUE to buy with NO-MONEY-DOWN!

This is the "Main Street USA" that the politicians profess to "care about". They're focused on getting large groups registered so they can vote come Nov 4. Do those new voters own homes? Do they understand the impact the candidates' programs will have on homeowners? Do they understand the impact the candidates' programs will have on the financial markets or small business owners, who employ more people than big businesses?

The NAR (via Realtor® magazine) made a statement quite some time ago that "if real estate is our job, then politics is our business" or something like that. Most of us avoid stating a preference for one candidate over the other for fear of alienating clients or potential clients.

Our industry is full of self-employed small businesses, such as inspectors, roofers, plumbers, electricians, chimney sweeps, general handymen, landscapers, and on and on. What will each candidates' programs do for those people? Or for us?

Is it time that we should speak up?

Posted by Elaine Reese, REALTOR® in central Ohio on 10/05/2008 09:30 PM

Comments (8)

central ohio, real estate market, new home builders

8 Comments on This is what got us into this financial mess!

OCT

2008

Hard to believe one can still get in for zero down. I guess we will never learn.

Elaine - well that's a sad state of affairs in that builder community, but I suspect one which we are seeing repeated in many areas. Builders are getting desparate and need to sell, and in some areas here I am seeing new homes priced less than what buyers paid a couple of years ago. Tough from an appraisal standpoint if those folks need to sell. The issue of no $ down is a tough one. There are folks who really want to buy and can afford the payments and more, but have no cash for a downpayment.

Jeff

John: I'm going to try to stop by the model when it's open to see exactly what the program entails. I thought these programs were kaput. At least they should be.

Jeff: I live in a high-growth area, so the builders really over-built in the early 2000's. They've curtainled their inventory somewhat, and have reduced prices for some of their specs by $50-75K. Like you said, the builders are a little desparate since they must appeal to their shareholders.

Carole Cohen made a good point about NAR (that's us) policing our industry. I don't know what the policy is, but perhaps it's time to take a look at business practices that aren't safe. Zero down buying is only safe when the buyer doesn't really need it.

KK: We can advise our clients but often they go direct to the builders and put on the rose-colored glasses. I can't see the builders "doing what's right" for the clients. They need to satisfy the shareholders - Wall St.

OCT

2008

Elaine, he may market "0" down but I doubt any lender would fund it in Ohio or MI. I was wondering how some of my Ohio friends were thinking about the early voting with no ID's were feeling. As I said on Maureen's post, I don't mind losing in life or elections, but not by cheating. Did you get that letter, NAR sent out about the bail-out? Made me ashamed to get it. They are so out of touch.

Already CA and is asking for money and Ford and GM. The gates have been thrown wide open and now anyone in trouble will hold their hand out.

I have avoided political posts so far, but I have been rethinking...............some things you know are too important to keep quiet about just for future business. As Realtors we can agree to disagree on many things, open houses, print advertising, and even our political views. Just like you and I each have our favorite teams but still are on line friends.

Missy, the news clips on the early voting plus the voter registration with Bruce Springsteen performing is what triggered the latter part of this post. Don't know whether you saw the clip up there, but when one TV station was interviewing our govenor, the reporter mentioned that people weren't having to show ID. The govenor didn't know anything about it.

The other troubling part was the voter registration blitz using The Boss to attract folks. It appeared as though a lot of the attendees were young, like OSU students. Yes, it's good for them to become involved, but I'm concerned they're being swayed by the smooth talk and don't have true knowledge of how the programs will actually impact them when they get into the real world. They're going to want a job soon, and will need those small businesses to be hiring. If those businesses are hurting due to increased taxes, then the student will find it hard to get a job.

Like you, I've avoided revealing a favorite on my WP blog, but with the recent poll results, I'm getting real concerned.

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