Humpty Dumpty
The Children’s rhyme Humpty Dumpty carries unique significance for the current real estate market. Humpty was a fat cat who sat on a wall, oblivious to what was happening around him. Other people’s problems evoked smirks and laughter. But if you remember what happened to old Humpty, he fell off of that wall and nobody could put his pieces together again. Humpty is a representation of the real estate market, which has fallen off its “wall” with the fall of the economy. Today, there are thousands in the real estate market scrambling to put all of the pieces of humpty together. I believe the new humpty will be much different than the older one. Some of the changes will include:
1. The successful real estate agents will be those committed to the buyer rather than to the deal. As new standards are developed by national associations and states as well as local boards. Real estate conflicts of interest (providing the mortgage broker, the appraiser, the home inspector, the attorney, and the property) will be a thing of the past. After this crash, buyers will be aggressive, demanding, and interested in purchasing real estate only when it makes sense.
2. Lenders, appraisers, attorneys, and inspectors will seek out new means of marketing rather than following after the real estate brokers and picking up their crumbs. Buyer advocacy will have new meaning in the marketplace.
3. Tougher standards requiring transparent ethics will take hold in the real estate market. These will either come from state or federal laws, which is a shame, or the professional societies involved will police themselves, demanding accountability and high ethics from their members.
4. There will be better quality housing stock. For years, many of us have witnessed the use of real estate agents as sometimes nothing more than agents of distraction focused on prohibiting buyers from learning the truth about their purchase. As their roles change, the buildings will become easier to read and property owners will provide needed maintenance and upgrades if they want to sell.