Friday, August 05, 2005

Realtors Require Buyers to Acknowledge RE Can Drop in Price

Realtors now require buyers to sign a document that acknowledges that they (the buyer) understand that real estate can drop in price, sometimes precipitously. No more "real estate always goes up; real estate is always a great investment" nonsense. This is one of the more bearish thing I have seen of late coming from realtors; a last ditch attempt to protect themselves from the impending law suits as the bubble implodes.

Some choice quotes:
"...real estate agents in some sizzling markets are asking consumers to sign a disclosure form stating that home prices can – and do – go up and down."

"In October 2004, the California Association of Realtors announced the release of a new disclosure form, the "Market Conditions Advisory," which states, "In light of the real estate market's cyclical nature it is important that buyers understand the potential for little or no appreciation in value, or the actual loss in value, of the property they purchase.""

"It is always problematic, she added, when homeowners lose equity. "They look for someone to blame. When the market has changed, there is no one to blame. We just want them to go in with their eyes wide open.""

""Because the market is so frenzied...what it's worth today has no reflection on what it's worth tomorrow""

1 Comments:

Anonymous Anonymous said...

Most people do not read disclosures anyway. So I do not think this has much influence on buyer psychology. However, it is an excellent reflection on the psychology of "informed" participants.

Aug 7, 2005, 2:41:00 PM  

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