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According to the National Association of Realtors (NAR) 2016 Profile of Home Buyers and Sellers, 88 percent of buyers purchased their home through a real estate agent or broker — a share that has steadily increased from 69 percent in 2001.
Even though the sophistication of the internet and social reach of technology have advanced immeasurably in that time, America’s dependence on the expertise of real estate agents continues to grow.
June is National Homeownership Month at NAR. As part of that recognition, the organization released the second in a series of three white papers in conjunction with the National Association of Realtors Sustainable Homeownership Conference at University of California, Berkeley.
The paper, “Hurdles to Ownership: Understanding The Barriers,” addressed five issues:
- Post-foreclosure stress disorder
- Mortgage availability
- Student loan debt
- Single-family housing affordability
- Single-family home supply shortage
The paper also reports that homeownership trends have started to rebound this year ever so slightly after a 50-year low in the second half of 2016.
However, bots, buyer-only home tours and the prospect of “disrupting technologies” aren’t going to help aspiring homeowners break down the ever-strengthening psychological walls between them and the American Dream.
Only agents can.
Before my wife and I started our surprise home search last month, I was seriously thinking about not hiring a buyer’s agent.
I’ve sold homes, leased commercial space and helped investors buy apartments. I could handle it.
I couldn’t be happier to have been wrong.
Our market — Truckee, California — is incredibly tight, defined perfectly by two of those five barriers: shortage and availability.
Homeownership here is being made ever more challenging by a geographic vice of outside money. A heavy influx of Bay Area home equity is coming in from the West; while from the East, Google, Tesla and Apple money is predicted to flow from the tax incentive-driven industrial complex of the Nevada desert.
After a couple of days in the market, we were overcome by the spectre of homelessness. Homes went from For Sale to Pending as fast as a browser refresh. Rentals, too.
My absence from active sales made me ill-equipped to handle this scary, sobering scenario; I would have had a fool for a client.
We found help via referral, and she immediately went to work for us. She understood our compressed time frame, clearly communicated the challenges of our price range and never stopped guiding us through the process.
She stuck with us, firmly withstanding a blitzkrieg of vitriol from me about the state of our market every time we toured a property.
I ranted about cash buyers, unscrupulous listing agents who bypassed local offers and the agent who seemed to drunkenly zero in on second-home buyers.
I can’t count the number of apologies I extended to her after realizing the value of her advice, always an hour or two later, of course. She had every right to fire me as a client.
Thankfully, she saw in us an opportunity for local, year-round residents — like herself — to gain a foothold in a market where economic traction will only grow more elusive.
In short, she put our best interests first.
I would have never gotten out of my own way had we forged on unrepresented. Listing agents would have sniffed out my naiveté and simply moved on to other, smarter offers that came from experienced agents.
Most importantly, I would have done an embarrassing disservice to my wife.
I now see, plainly and inarguably, that today’s real estate agents offer as much value and emotional support in overcoming the barriers the NAR paper highlights as they do in their role as transaction managers.
We were eased into the understanding that the money being used for our down payment is merely being traded for long-term home equity, moving from one asset to another. It’s not really being spent.
A 50-year low in homeownership can’t be cured by removing the only true translator consumers have for understanding an increasingly complex business environment.
The paperwork, the financing, the deadlines and the regulations having to be juggled. Nothing is getting easier for homebuyers today, despite Washington’s attempt to helicopter-parent our real estate economy.
Major economic issues provide homeownership barriers with a sturdy foundation, and we will only find ways to break them down with the help of licensed real estate experts.
Have a technology product you would like to discuss? Email Craig Rowe.