Tuesday, April 29, 2008

Buyer Beware

In most cases, the following people are directly compensated when you purchase a home: real estate agents, mortgage broker/bank, appraisers, inspectors, surveyors, title companies, pest inspectors, and to a lesser degree county recorders. Don’t forget that the majority of the media outlets, like newspapers, Internet sites, and radio also make money by advertising their services.

For them, it is always a good time for you to buy. I doubt these real estate service providers will ever tell you it’s a bad time to buy. So please keep in mind who pays their bills when receiving advice on the housing market. Just about everyone a buyer deals with makes money when they purchase a home. To make matters worse, the more expensive a home you purchase, the more some of these folks make. In other words, no one is truly looking out for the buyer best interest. Everyone involved in the transaction wants you to spend money, and the more you spend the better for them. Of course this isn't that different than other big ticket items, such as cars, but even then a borrower can go to Consumer Reports to get an unbiased evaluation.

Buyer's have much more control of their destiny compared to previous years, however there are still a great many pitfalls that await the uninformed and/or unprepared. Forbes recently reported that Sacramento is #2 in the nation for projected home value decline in 2008, and #1 in homeowner debt.

Initially this blog, was my way of coping with the frustration of waiting out the bubble…..but it has also evolved into an independent voice that advocates issues from the buyer’s perspective. When my husband and I bought for the first time, we were incredibly reliant all the folks listed above. We searched the Internet, but had trouble finding unbiased advice on what to expect. There are a so many “ins and outs” to the process that there were times when we didn’t even know what questions to ask.

We learned a lot from that experience, and as a result, I do my best to provide relevant commentary and data to those who are hoping to purchase a home. My hope is that this forum can provide them the knowledge to make a more informed decision (often those who comment know way more about a topic than I do). Like Consumer Reports, I do not receive any compensation or endorsements from service providers. Although I must admit, I am quite partial and advocate on behalf of affordable housing for all (lower prices).

We are also in the middle of trying to navigate the purchasing process ourselves, so I’m not just pontificating without any skin in the game. Instead, I am actively trying to find a home in this very messed up housing market and reporting on my trials and tribulations. But also note that I am not a paid professional in this field.

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