Paula Burt

OUR NORMAL BROADCAST OF "AS THE PENDULUM SWINGS" IS BEING PRE-EMPTED TODAY TO PRESENT THIS URGENT MESSAGE TO THE CITIZENS OF NOT ONLY OUR LOCAL COMMUNITY, BUT THE ENTIRE NATION!

I was reading another Blog today regarding the state of our Real Estate Market (click here to read it) and I got to Comment #12, when I was MOVED to go to my email account to write this message to every single person in my email address book and in my business database.

I am printing the letter here as AN OPEN LETTER TO THE CITIZENS OF THE UNITED STATES OF AMERICA.

THIS IS A CALL TO ACTION!!! I hope that everyone will copy it and use it and do the same as I did.

Here it is:

Subject: This affects EVERYONE, and OUR ECONOMY. This is A CALL TO ACTION, no matter who you are!!!

Please, everyone who is reading this, copy it and do the same!!!

THE SAGA CONTINUES...

Then (as I entered the Real Estate world and had just "hung my license") that "Bubble" BURST with a resounding "WHAT JUST HAPPENED???!!!"

Next, the Foreclosures started to increase with lightening speed. It was not unusual to see entire sections of 12 - 16 pages (or more) full of "Sheriff Sale" notifications in the local newspapers each week for quite a long time, as Adjustable Rate Mortgages reset to higher rates than home-owners could afford to pay. We are still seeing that happening today, and may continue to see a lot of it for the next year or so, as some of those ARMs are still out there and, we're told, are scheduled to "reset" to a higher rate.

Foreclosure websites and notification services came to the forefront to market some of these distressed homes.

The lending landscape changed almost overnight, it seemed. How many times have we gone to bed on a Sunday evening, only to wake up Monday morning and find out some other bank had closed overnight, or merged with some other giant conglomerate who was rescuing them from total annihilation? The way-too-easy-to-get loans that had been available to buy a home, ALL OF A SUDDEN, no longer existed. Banking and financial institutions are either closing their doors, merging with each other, or changing the way they handle business. Lending institutions, for a while, seemed to not be able to lend mortgage money to anyone. Credit became something we only remembered using, just recently... but, no more. Business to business lending stopped for a while. People stopped spending money, worrying about how they would pay their bills if they couldn't borrow anymore like they used to. The Specter of The Great Depression began to rear its ugly head, and people started to wonder if that could really happen again, in this day and age.

Suddenly, SAVING began to re-enter our vocabulary and our lives. Belt-tightening made a big come-back. Paying for things with CASH, of all things! Not buying things if you didn't have the money, and waiting until you did have cash to make purchases. People are again using coupons, shopping sales like never before, and SAVING MONEY all over the place! Using cash has become something people strive towards, not just something they remember hearing their parents talk about doing in the past.

Stay tuned for Episode 3: ...the Saga continues!

Are you a Soap Opera Fan? If so, you should be loving what's going on in the Home-Buying and Home-Selling Market!!! If you are not, now is the time to start! Don't miss a day of this ongoing Saga, because the storyline sometimes changes from hour-to-hour, not to mention day-to-day and week-to-week. Month-to-month and year-to-year changes have been the standard, not the exception, over the past two years. In the end, hopefully, you will have a better understanding of what Real Estate Agents do, how & why they do it, and why you need one if you have a need to buy or sell a home.

DAY 1: THE SAGA BEGINS...

(Please note that, in some places, I do use exaggeration for effect; however, not by much)

For 3 - 5 years, home prices were rising so fast and furiously that Real Estate Professionals barely had to "work," I'm told. (I'm a newer agent, only licensed about 2 years.) It seems Listing Agents could list a home, turn in the paperwork, go to bed, and multiple offers would just pour in overnight. Buyers Agents had people vying for their attention and couldn't keep up with the workload. Either way, you barely had to prospect anymore, as people were calling agents all over the place to get their help to sell or buy a home, with the Sellers in charge. It truly was a Seller's Market!

All kinds of innovative mortgage loans were much too easy to obtain for many home-buyers who really weren't responsibly, reasonably, or fiscally ready and able to buy homes, no matter how "willing" they were. We can thank our Government for encouraging that idea, many years and a few administrations back.

Home-owners were re-financing their mortgages to take advantage of the higher equity their homes now afforded them, as the homes had increased so much in value that they wanted to take money out to improve the home or increase their standard of living in some other way, or sadly, just to pay off outstanding bills.

The Pendulum had swung WAAAYYYY TOO FAR TO THE LEFT!!!

The problems were beginning to pile up, and we, the unwary public consumers, were unaware of the disaster yet to come.

*Tune in tomorrow for DAY 2: THE SAGA CONTINUES...

Here's a new wrinkle, at least for me. My most recent buyer customer found a nice piece of land he would like to purchase so he can eventually build a home on it.

His dad owns a restaurant and has turned it over to him, mentoring and advising him as he learns. About 3 months before contacting me, dad took his son "off the books", and now the book-keeper (cousin) would have to create a paper trail that a bank would find acceptable in order to finance a mortgage for him. He has about $25-30K to put down on the property, but no documentation of his income. They have it set up where he gets paid, somehow, but it's "not on the books." ?????? Someone more informed in business models than I will have to make that one make sense to me. And good luck with that! My mind tends to work on logic and common-sense. Somehow I don't think this one qualifies.

After consulting with two separate lenders, each of whom explained in detail the need for his financial information, alternate credit proof, etc., I thought Mr. Customer finally got the message. Boy! Was I ever wrong! He just faded into the woodwork and was upset with the lenders. I proceeded to not think about him much because I did not consider him a serious client, considering his attitude.

One day, the seller's agent, great guy that he is, proved he had really been working with his clients. He called me out of the blue and informed me his sellers would be willing to finance the purchase for the buyer. Wow! That's great! What more could you want, right?

Well, I called Mr. Customer, and he seemed thrilled... told me what he wanted to offer, some information he needed about the property as far as utilities, etc., and I went to work compiling the information he wanted, and informing the seller's agent that we were working on making an offer and accepting their generous offer to finance the purchase for my client. I then received an email from the seller's agent with an attached financial disclosure form, which I forwarded to Mr. Customer with a personal note from me to the effect of "How wonderful of them to offer to do this for you!"

Days passed. No responses to my emails or my phone calls. None.

Finally I got him on the phone at work. He told me in no uncertain terms that he "would not be filling out any financial information for anyone. That's why I got so upset with those 2 lenders. Whatever happened to writing a contract, accepting my down-payment money, and letting me pay the bill every month? My financial information is nobody's business but my own!!! When they are ready to accept my offer and my money without having all my financial information, let me know!" BTW: he had no intention of paying the list price, which was definitely a fair asking price.

Well, I have informed Mr. Customer that I will no longer be representing him. (and yes! I am just as hungry as the rest of you are, but I will not work with this type of person. Who knows what the story really is, or what other problems would be presented going forward?) My integrity is more important than the $1700 paycheck I would have eventually received for the sale.

How would you have handled this?

NOTE TO HOME-BUYERS, whoever you are and wherever you may be:

You can no longer get a mortgage without providing documentation of your financial situation. No-Doc loans have gone the way of the dinosaur! And if you are fortunate enough to find a seller (of anything) who is willing to finance it for you personally, you must understand that they are going to want to see some kind of proof that you can make the monthly payments going forward, just like any lender would. Would you give credit to some unknown stranger without doing the same yourself? I highly doubt it!

When you are buying real estate, your financial information IS somebody else's business besides yours. That is simple common-sense!