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Monday, February 12, 2007

Why this insider blogs at Seattle Bubble & Rain City Guide

So, why do I contribute from time to time and participate on Seattle Bubble Blog and over at Rain City Guide? Isn't that like not a good idea?

I'll write as I think, so here goes:

I read, collaborate and discuss housing here because it offers one of the very best cross sections of consumers who are interested in housing. Housing impacts our daily lives, whether you currently rent or are a future, existing or past homeowner. This blog has them all (consumers), mostly absent of insiders who stick around to comment, except for Ardell Dellalogia, whom I've encouraged to join in on the discussion and has both here and at RCG.

Sadly, it's a shame other allied real estate pros don't participate. My sense, right or wrong, is that other folks in the business do not want to be scrutinized or singled out and be the fodder of any blog. I wish this were not the case, but I think it holds true. I also believe there are many people in the business who agree with a lot of what is being discussed in this forum, confirmed from many conversations I have outside the confines of this blog. The real estate community, while large, is small. Enough said.

One of the other reasons that I participate is that I learn. A lot. From everyone. I just wish I had some way of an RSS feed for Eleua's comments. I admit it. Sometimes I just scroll to find his military flavored comments that nearly make me pull a muscle from laughing so hard. Sometimes my kids wake up at midnight from the laughter in my office. They murmur to each other: Dad is on that blog again!

Commenting on this blog has not been counterproductive to myself personally or professionally. Oh, I've had my fair share of hate mail over the months, but I never take it personally. I participate because I have a lot to offer from a perspective that has a unique vantage point: we (escrow) see everything (finance, lending programs; the good and bad as well as real estate issues) from the lens of escrow—a traditionally neutral party (arguable).

If there is anything that concerns me the most about real estate it is that far too many consumers go blindly into a transaction without the best information and receiving full disclosures of fees, any affiliated business relationships, who is paid what, when and why? Most problems associated with a transaction, either purchase/sale or refinance, could be avoided by full transparency and integrity-driven, consumer-FIRST practices. Unfortunately, consumer-FIRST practices are not always on the radar. Sometimes it is off the radar completely.

The difficulty with escrow is that you must maintain a fact-based approach to assisting consumers with closing documents and loan paperwork. By the time a consumer signs paperwork the efficacy of the transaction and question "should I be doing this," hopefully has been previously answered. Sometimes it is not. I say it is difficult because with a "neutral party poker face," we cannot get into a discussion of "gosh, you are paying $10,000 in fees to get $20,000 cash back on your refinance!" It is also difficult watching a 90 year old very bright and fully cognizant woman refinancing her home, again. Probably the most difficult professional day in my life.

For years, real estate has been used as an additional vehicle to build wealth. From my experience, it has been a wealth builder for those who treat the primary home as a place to put down roots. Long term. I recently had the pleasure of meeting with a gentleman who has several properties as long term investments. The youngest in his portfolio was purchased about eight years ago, most much older. Over the past three years, it was an odd day to not hear a buyer, while signing closing and loan doc's, comment about how much equity they would realize. Where did "I'm buying the house because it's a place I want to live" go? It's not that housing should not be a part of asset growth, but when it becomes THE only way to go in the minds of many, many are going to be sadly disappointed.

Does my participation and others' have an impact on the market, its psyche, or whether or not our Puget Sound region is experiencing a bubble as defined by each individual? Should the real estate community be critical of the media now? Is it the classic double-standard? No comment during the run-up, but when the winds blow the other direction, should the media be criticized?

My best guess is that my participation has little to no impact by itself. The market changes were occuring well before I stumbled upon this blog or others. My belief is that, at its core, this blog is helpful to consumers. Buying a home is a large transaction. Seattle Bubble and other blogs provide an alternative and fresh approach to understanding economic dynamics that are in play in our local markets. Filter out cheerleading and rants on both sides and you'll find gems of relevant information. The cumulative power of hundreds of bloggers discussing real transaction issues, market nuances and news is what makes this and other blogs powerful. How influential is difficult to quantify.

Regarding the criticism of the media discussing housing bubbles: in my opinion, this is the more humorous of ironies. Look, there is no doubt in my mind that housing is a large, very large, contributor to our economy. I don't want the housing sector to be hit hard, but what did anyone expect with the enabling and complete abandonment of sane lending practices? As I said to the lender account executive from LA who drove up to Seattle visiting mortgage brokers, "what did you expect was going to happen to all these borrowers with Option Arms and 100% financing?"

While Rain City Guide is a fantastic blog, even though some of my comments or topics may be thought of (8 min. 30 sec mark of the podcast) as controversial, its core audience is allied real estate professionals. The core audience of Seattle Bubble is largely consumers: including people interested in buying a home, existing homeowners like me and others. Each blog serves its own purpose. I would be interested in knowing how many hits Rain City Guide gets from actual consumers vs. industry insiders, but I don't know how you could track it.

Living within or under your means starts with educating yourself about home ownership, when it's right to make that step and the critical stage of understanding financing. Learning strategies to keep more money in your wallet within the realm of buying or selling a home is an important factor in building your future nest egg. Stay tuned.

7 comments:

EconE said...

I'm speechless.

This is honesty to the core.

Eric said...

This level of honesty and integrity is what attracts me to this blog (over a year now). The information and knowledge I've gained here can not be overstated in how it's aided me and my wife in gaining perspective on the market and finding "a home" and not just an investment.

As a consumer, thank you S Crow.

Brettro said...

I'll echo what eric said. This information has been invaluable to me. Thank you

cEvin said...

Tim,

Thanks for that. I'm so happy you and the interwebs are around to keep those of us that want to understand the truth informed.

Richard said...

Thanks for the explanation. On more than one occasion I've wondered what how this fit with you.

Your posts provide real perspective.

rubyfan said...

I think a lot more of us who hold to the housing-bubble theory need to be posting on those "mainstream" real estate (dare I say "Happy Talk") blogs. You could even say it's our duty to do so. Doing so might help some poor sucker... err, I mean buyer who visits those blogs looking for information and it might cause them to think that they really need to do more research into things like the kinds of mortgages their broker/RE agent is pushing. Maybe they'll think that perhaps they need to save up more money for the downpayment and have more cash on hand for emergencies. It's not a bad outcome.

Personally, I was thinking of buying a month or so ago. After finding this blog and others like it, I realized that I need to save up for a much bigger downpayment and not listen to the mortgage brokers who tell me that I don't need a downpayment because of this or that exotic mortgage product.

...actually, now I'm convinced that I'm better off waiting several months before buying because there will likely be much better deals around then.

EconE said...

I'm surprised that there aren't more comments here...I feel this is worthy of a "bump" so to speak.