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Sharon Ritter

Issues : Smart Growth and Abusive lending practices

By: Sharon Ritter
Wednesday, August 01, 2007 11:26 PM

According to the NAR, by 2020 the US will have the task of housing 53.7 million more Americans than in the year 2000.  With this many consumers needing housing in the next 13 years, its a puzzle why so many of us are looking for buyers. 

Why? Because the buying enviroment is just not attractive to the public.  The NAR's SMART GROWTH initiative is something that as realtors  we need to support and become involved in its success.  The NAR recommends five guiding principles which we as realtors can support, vote for, advocate and educate others on their importance. Briefly the principles are:

1. Commit to housing opportunity & choice, urban, suburban & rural homes at ALL price levels for  diverse population    2. Build better communites- good schools, low crime, quality public services, efficient transportation , recreation areas, open space, strong employment base, viable commercial sector   3.Protect the enviroment, encourage preservation of natural resources and properties of historic significance.  4.Respect our rights to own, use and transfer real property   5. Implement fiscal measures to ensure that the cost of new infrastructures are shared proportionately among those who are served.

 Another issue that realtors could take a firm stand on is abusive lending practices.  We as realtors know at some point when we are dealing with a buyer that would be better off not buying immediatley.  Our more ethical task at this point should be to educate the buyer about postponing their purchase because it is not only in their best interest but in the interest of all of us.  Again from the NAR's "EYE ON THE HILL" by Jerry Giovaniello, Chief Lobbyist and Sr. VP of Government Affairs , "this leads to declining prices and inevitably devastates the strength and stability of those communities and the families who live there."

Although many of us may find politics distasteful and not as much fun as selling real estate, to keep our industry profitable and strong, it is our responsibility to contribute to keeping it healthy. Support SMART GROWTH and educate your buyers on abusive lending even if you miss out on that one sale...it will be a WIN-WIN in the end.

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Comments

Kevin and Christina Stevens
Member Since '06

Kevin and Christina Stevens said:

I have done 2 posts on this same subject.  Nobody like to talk the negligence of the lending community for some reason.  I applaud the effort but gave up myself after a perfectly good post went unnoticed.  I guess the meat and bones of why our industry is struggling is not all that important to anyone but you and I.

August 2, 2007 11:07 AM
Cathy  Clark
Member Since '06

Cathy Clark said:

Christina, I don't believe you and Sharon are the only two in the world who care about this issue.  I believe you don't get much of a response because your preaching to the choir.  The group you are talking to here practices #1 on a daily basis.  We recommend reputable lenders but cannot force a buyer to choose one.  Those abusive lenders will eventually be eliminated as we see happening now.  However, another will take its place by reinventing that wheel and we will still have to deal with it.

August 2, 2007 11:54 AM
Kevin and Christina Stevens
Member Since '06

Kevin and Christina Stevens said:

Maybe your right Cathy.  I know this has been an issue but I was really shocked to see half of realtor mag devoted to subprime lending and how we need to adapt.  I know we must but the forced adaption bugs me a bit.  What are they doing to adapt.  Do you think the lenders actually detail the pitfalls of ARMS???  I kind of doubt they disclose as much as we do.

August 2, 2007 12:19 PM
Cathy  Clark
Member Since '06

Cathy Clark said:

If we are to represent our clients best interests we must know what they're getting into.  The first thing I tell an inexperienced Buyer is that many lenders are going to qualify you for more than you can afford. Start backwards.  What do you want to pay each month, including insurance and taxes.  Then we go from there.

My other advice is, keep it local!  Make sure that mortgage broker has to look you in the face in your kids schools, town meetings, 4th of July parades, etc.  They're more likely to do their best for you if you're becoming a member of their own community.  I've found that more and more Buyers are taking this advice.

August 2, 2007 12:31 PM
Craig Barrett
Member Since '07

Craig Barrett said:

Yes Cathy and Christina, I agree. I'm sorry I didn't see your post Christina, maybe it got lost in all the "noise" surrounding the "contest".

I tell my inexperienced buyers what you qualify for and what you are comfortable with are two different things. Listen to your lender and ask questions. I also advise them to talk to at least two or three lenders and compare. Share with me what you find and we'll talk about the risks with each loan program. I bet lenders all over are cringing as they read this. So I'll add, I don't do it to spoil the relationship with the lender. I do it because I have a fudiciary responsibility to my client and it's the right thing to do.

Smart growth and open space is very important where I live. The community is small and rural. We have seen explosive growth to the north and south of us over the last 10 years or so. We are very active when it comes to "fighting for the cause", which changes every couple of years or so, but always comes down to smart growth and protecting open space.

August 2, 2007 1:28 PM
Cathy  Clark
Member Since '06

Cathy Clark said:

Christina,  you said:

"I know we must but the forced adaption bugs me a bit.  What are they doing to adapt."

It bugs me to no end!

But, they do adapt.  Make no mistake. They're adapting like no one's business.  Just not to the Buyer.  Only to their check and the bottom line.

That's why we must do a better job of adapting to them and, more importantly, our Buyers.

August 2, 2007 7:03 PM

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Sharon Ritter
Keller Williams Realty

Sharon Ritter
Member Since '05

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