Let's talk seriously for a minute.
You may have seen the most recent National Association of REALTORS public awareness commercials (If not, click on the video at the bottom of this post for one example). For better or worse, the NAR is looked upon by many in America as a reputable source of information on the housing market. I personally don’t think this ad warrants that trust. For my tastes, it doesn't paint an accurate picture, and therefore doesn't meet the standard of what should be considered reliable information.
I decided to take this commercial line-by-line and examine it for accuracy. My opinion, as stated below, is based on my knowledge of the Dothan and southeast Alabama real estate market. Your results may vary.
"When you have a family, it's always a good time to buy"
The first one...right out of the gate...is just wrong. Blanket statements such as this usually are. If you don't plan on owning this newly purchased home for at least four or five years, now might not be a good time to purchase. There will likely be very little, if any, equity gained over that time, so you need to strongly consider what your situation will be when you get ready to sell, before pulling the trigger.
"It's a great move up market"
It depends. If you can sell your home and be able to stomach what you may have to settle for dollar wise, then you will have lots of options on the buying side. It may be possible to gain some equity back from your sale when you buy. Maybe. John Harper has a good post on this very scenario.
"In this market, there's a lot of options"
True as far as choices of property. Maybe not true for choices in financing. Since inventory across the country is high, home buyers are finding lots of homes to choose from. However, mortgage lenders have tightened their grip somewhat on the money needed to buy. Still, if you have decent credit and some money to put down, financing will likely not be an issue.
"interest rates are low"
The first absolute truth so far. Mortgage rates are low, and have been for several years. They have moved up in the past couple of weeks and have been fairly volatile, with sometimes daily changes. Still, all indications are rates will remain around 6%, give or take 1/2%, over the foreseeable future. Keep an eye on the “Mortgage Rates Watch” widget in the middle column to your right.
"It doesn't make sense to spend the same amount of money renting when we could own it"
Jim Duncan had an interesting discussion about this last week. It seems real estate as an investment doesn't perform much better than inflation, even over extended periods of time. I still contend that we have but two realistic choices regarding our domicile...we either rent or we buy. We get absolutely no return when we rent, so all else being equal, this one is true.
"Working with a REALTOR took all the guess work out"
Another blanket statement. Not all REALTORS are created equal. I feel I should say something similar to what you hear on those late night infomercials, you know the ones on how to lose weight or get rich in real estate. Here goes.
DISCLAIMER - These results ("Working with a REALTOR took all the guess work out") are not typical. Your results may be significantly less spectacular.
Is that fair? I know it is accurate.
"This is the best market in years in terms of choice"
Same as the options statement above.
"Interest rates are at historic lows" and "Home choices have increased"
Already covered.
"Prices are favorable"
This commercial is aimed at buyers, so I guess this is true. I think some sellers might disagree.
"If we didn't buy now, we would have missed the opportunity on this home"
This one could be true. Homes that are priced right, in good condition, and in desirable areas are selling. Opportunity is where you find it, and I think there are alot of places to find it right now. Even within a particular market or zip code, there are discrepancies. Which brings us to the end…
"Every market is different" and “Call a REALTOR today”
Absolutely! Yes, this is going to sound like blatant self promotion, but a good, local real estate professional is almost always your best source for market information. A good REALTOR will give you the facts, and help you weigh your options.
While some of the statements made in the ad are half truths, consumers need to take away the feeling that they should contact a local REALTOR for advice. That was certainly NAR’s goal. They are a trade association you know.
I just don’t think the end justifies the means.
See the video on the original post HERE
Comments (0)Subscribe to CommentsComment