The Seeds For The Next Avoidable Real Estate Crisis

How many people are out there selling houses, condos, properties, when they know little to nothing about what it is they are selling? Athletic shoes sales people are perhaps far more knowledgeable about the far less expensive shoes they are selling. Buy the wrong pair of shoes, and you will not lose your pants. There are steps that allegedly protect the buyer. First, the home inspector. I believe a good handyman, general contractor or carpenter can do a better job, and that if the home inspector is too diligent, and ends up killing real estate deals by over diligence, the home inspector will not receive future referrals from the real estate agent. The next level of alleged protection is from the home appraiser, usually an added expense for those trying to secure a loan. But all a home appraiser does, I believe, is reflect the recent and current trends in the real estate market, which almost anyone can do that merely looking at recent sales, pending sales, and what is presently on the market. And even if the house appraises out, if we go into a recession, whatever it is valued at now will surely be lowered, and untold numbers of people will be underwater again. Then there are the "rehabbed" properties. I believe there should be an inquiry into the "rehab" work of Fannie Mae regarding their rehabbed properties, and if permits were properly drawn and if the work was properly inspected. If rehab work is shoddy or not adequate, untold numbers of people may face a financial disaster up the road. At least loans are more regulated and only qualified people get loans nowadays, is the common refrain. Even this does not mean much, because if we go into a recession and those qualified people lose their jobs, we will be in the same ugly place we were in before in which people owned houses they could not afford. For the individual consumer, find a knowledgeable real estate agent, not a slick sales person. The real estate industry would be far better off for consumers if it moved more towards salaries with commissions, and not straight commissions. If you hire a home inspector, I advise you to find your own and not rely on a realtor. Or find a reputable carpenter, handyman or contractor, and pay them to give you an informal assessment. Regarding appraisals, I think they are at best a reflection of the immediate present, and are not an indicator as to whether an investment is truly sound. If you choose to buy a Fannie Mae property that they advertise has been rehabbed, or for any rehabbed work, be sure the work was properly permitted and inspected.