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When Will We Start Rewarding Honesty Again?

I made a comment a few weeks ago that the only thing that will bring the housing market back is honesty. It was a simple statement; unplanned and unrehearsed. It sort of just fell out of my mouth. I didn’t think much of it even after I said it. I was shocked at how it resonated amongst those who heard it.

It flew through twitter tweets. Friends on facebook continued to share it and re-share it. I was amazed. I decided to look deeper into why such a simple statement could actually impact so many. It was then that I realized that honesty was exactly what was missing in the real estate market for several years.

For years, many buyers weren’t honest about their income and some loan officers didn’t care. The loans were bundled by Wall Street and sold to investors who were told anything but the truth about their value. For years, some real estate professionals prodded appraisers to move that appraisal up ‘just a bit’ and most sellers thanked them for it. The housing bubble was created on a bed of dishonesty. I’m not saying that any group was malicious in their intent. Everyone probably believed that it would all work out in the end. But, it didn’t.

Instead, we were faced with the largest housing collapse since the Great Depression. A market built on so many half-truths couldn’t continue to grow. Its foundation was rotten. Governmental regulation has forced most parties to rethink the way the housing industry can survive. A person given a mortgage must now prove they have the capability to repay it. An appraiser is held to a higher standard as they determine values. Has the pendulum swung too far? Perhaps. But, something needed to be done.

That brings us to today. Let’s make sure that we demand honesty from real estate professionals in everything we ask them to do. Buyers must insist that the loan officer determines the amount of mortgage they can actually afford. Sellers must make sure they are given an honest estimate of their home’s value in today’s market when listing. Remember to reward the person who has the courage to tell you what you need to know not the one who is telling you what you want to hear.

Honesty is the only thing that will bring back the housing market. I now realize the power of that statement.


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1 reply
  1. Alex Cortez
    Alex Cortez says:

    Good stuff, Steve. Unfortunately, too many real estate agents have ‘stretched’ the truth, whether baiting sellers by telling them a list price that is obviously too high just to get the listing or by neglecting (intentional or not, that’s a topic for another discussion) to tell buyers material facts. That’s not to say that buyers/sellers don’t do the same, but Realtors have a COE to adhere to. Anyway, I don’t want to ramble on, I just wanted to commend you for bringing up a subject that CLEARLY needs revisiting.

    Reply

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