Real estate is NOT like it used to be -

We’ve been reading a lot lately about today’s market, how different it is now from last year. I thought it might be fun to look back a lot further – to the 70’s, when I started in the business. Some of you might not have been alive yet, and others were too young to be home buyers or sellers then, so maybe you will find this interesting:

• A brand new 3 bedroom, 2 bath brick-front townhome was priced in the low $20’s. Today, that home in that community sells for about $300,000; and new townhomes sell for more than a half million dollars.
• A real estate sales contract was 2 pages long, hand-written on legal-sized paper. Today’s real estate contracts are commonly about 45 pages long, computer-generated on letter-size paper. The half-page listing contract has been replaced with a dozen or more pages.
• The multiple listing service was alive and well, but home information could only be found in a book published weekly. New listings usually did not have any photos – a black and white exterior photo appeared a week or two later. Today’s listings are published worldwide on the Internet within minutes of going on the market, often with a dozen or more color photos.
• Real estate agents could show other company’s listings, but they had to go to the other company’s office to get the key. Then they had to return it before they could show another house, in case another agent needed that key. Today’s agents just aim their cell phones at an electronic key lockbox to obtain the key for a property.
• Speaking of phones, when an agent was running late or got lost (no GPS systems in those days), he or she had to stop and find a pay phone to place a call. Today they can make a hands-free phone call from their car.
• Telephone tag was the norm, with buyers and sellers having to leave a message with a receptionist and then wait for an agent to call them back with information about a property or anything else. Today, we not only have voice mail, we have text messaging and email; instant communication is the norm rather than the exception.
• Real estate agents always represented the seller, even when they worked with the buyer… even if the buyer was a friend or relative. Today’s buyers have their own exclusive representation from a buyer’s agent who looks out for their best interests and has no fiduciary relationship with the seller.
• The interest rate was about 7%… shot as high as 17% during the Carter Administration… and remained double-digits for most of my career. Who ever thought we’d see five or six percent in our lifetime? Yet we did, and the rate has hovered in the 6’s for over a year.
• There were only three loan choices: VA, FHA and Conventional. All of them were 30-year fixed rate loans. If the buyer was not active duty military or a veteran , VA was not an option; the FHA loan limit was $33,000 so that was not an option for higher-priced properties; that left Conventional. Adjustable rate loans, buy-downs, wrap-around mortgages and other creative loans were the market’s answer to high double-digit interest rates… yes, 17%. And these programs remained available when rates went down.
• Most contracts were written subject to loan approval, which required verification from employers, creditors and banks via "snail mail" (i.e. U. S. Post Office) - this often took about two months. Loan processing then took a few more weeks, so settlements did not occur until about 90-120 days after contract, in many cases. By contrast, today's buyers usually obtain loan approval within 24 hours, and only then do they go home shopping. After their contract is accepted, only an appraisal of the subject property stands in the way of settlement - and settlement usually occurs within 30 days of contract.

As you consider how different this year’s market is to last year’s, perhaps this little stroll down memory lane will help you to realize that it’s not as dramatically different as the media would have you believe. Okay, prices are down and sales are slower - slightly. But this is a “normal” market adjustment, and nothing to be afraid of.

If you want to buy or sell a home this spring, find yourself an experienced agent who has “seen it all” and is not intimidated – one who knows what steps to take to maximize YOUR profits in today’s market because they’ve lived and worked through similar situations (and worse!) in the past.

Feedback and questions:

www.MargaretWoda.com

mwoda@remax.net

Real estate is NOT like it used to be -

Copyright 2007. All rights reserved. Margaret Woda