A Breach of Ethics?

I spoke with a number of ForSaleByOwner.com customers from various markets this week, and was alarmed at the number of people who have had the shared experience of real estate agents not acting in the best interest of buyers. What's going on, it seems, is that agents are increasingly not showing FSBO listings to their clients, even if such listings fall under the parameters and price range sought by them. This is even happening in situations where the "for sale by owner" has put their home on the M.L.S. and has advertised that they would pay a commission to an agent who brings a buyer.

Incredibly, such housing discrimination is not considered an illegal practice. It is, however, against the National Association of Realtor's code of ethics. The first code list under its Duties to Clients and Customers reads as following:

"When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS^® pledge themselves to protect and promote the interests of their client." (click here to read NAR's Code of Ethics)

Agents who refuse to show FSBO listings are engaging in a deceptive practice that's far from protecting and promoting the best interests of their clients, who undoubtedly wish to see all homes on the market. Rather, they are trying to protect the interests of those agents & brokers who view FSBOs as a threat to their livelihood.

Let me be clear that there are many quality real estate agents who do indeed show their clients homes that are being sold "for sale by owner." It's the minority of agents that are doing otherwise, and their acts threaten to tarnish the reputation of all Realtors throughout the industry.

Nationwide, it's estimated that FSBO listings account for more than 20% of all listings on the market. For agents to ignore such a large segment is not only anti-consumer. It's impeding the sale of homes that is so critical to the healing of the current housing crisis.

Street Interview

We recently headed to the streets to talk with people about their thoughts on real estate agents and the commissions they charge to sell a home. We met very smart people who shared their concerns about handing over so much of their home's equity in the form of a real estate commission. This gentleman had some very interesting comments.

The All Important Credit Score

Mortgage rates have dropped considerably in the past several days in the aftermath of the federal government's takeover of Fannie Mae and Freddie Mac. The average rate on a 30-year fixed mortgage were hovering around 6.375% a week ago. Now, it's around 5.75%. On a $300,000 mortgage, that's a monthly payment difference of $122. Over the course of the 30 year loan, it's a difference of nearly $44,000.

But today's lower rates are only available to those with a credit score of above 740 and are making a 20% down payment. A slightly lower credit score will still get you a great mortgage rate, but you might be missing out on some savings. All that is needed is taking a look at your credit report and seeing what can be fixed. A simple fix like closing unused credit cards will go a long way increasing your credit score.

Taking a look at your credit report is an important first step towards a lower mortgage payment. There's many great websites out there that will run your credit report, and I've found this site particularly helpful.

Fannie Mae and Freddie Mac

While I was enjoying watching Brett Favre and my beloved New York Jets win their season opener, it's good to know that the government was hard at work helping our housing market. As you've heard by now, yesterday Treasury Secretary Henry Paulson (pictured) announced a takeover of mortgage giants Fannie Mae and Freddie Mac.

Together, Fannie and Freddie own or guarantee more than $5 trillion in mortgages. Their survival is crucial to the health of the U.S. housing market and, indeed, the entire economy. The takeover is designed to help lower mortgage rates and make it easier for people to get or refinance mortgages. John McCain and Barack Obama today each announced their support for the government's action, and the market responded by sending the Dow Jones up 290 points.

The real test, of course, is seeing whether this will translate into more home sales and an increase in mortgage approvals. The nation's housing inventory level currently stands at 11.2 months, far above the 6 month inventory level that represents a health housing market.

It will take a combination of increased mortgage availability and greater home buyer confidence to lower inventory levels, and in a few months we'll know whether the government's action will produce this intended result.