Housing Industry Adapts to Not-So-Retiring Baby Boomers

AI have written many times about how well real estate agents work for many types of buyers and sellers. In all my books for home buyers, I recommend that buyers use a good, knowledgeable agent to purchase property. For sellers, I think that most will be better served by using a great real estate agent than by going it alone -- particularly in troubled times.

While I receive thousands of questions from people each year, I don't often hear from folks who are delighted and have had a trouble-free home-buying or -selling experience. Most folks with questions about their transactions are in trouble. They have questions about agents who don't understand them or don't do right by them, or have had, for one reason or another, some other unfortunate experience. I choose what I feel is a representative sampling of questions from those that come to the Real Estate Matters mailbox.

You are right that there are many great real estate agents out there and that people should look for those agents. But when people have bad experiences with agents, they have questions about how to fix the situation. These experiences and questions from readers educate other buyers and sellers as to what to expect from their real estate agents.

I also think that many real estate agents today have never seen the type of slowdown we're in. Some agents are used to selling quickly and easily, pocketing their commissions, and moving on. Agents who have been in the real estate business for 25 years or longer have seen down times as well as the good times. They understand that real estate is a cyclical business and sometimes it just takes months to sell a house.

There are sellers who are unreasonable about what they want when they sell their homes, and there are buyers who are unreasonable about what they should pay for a home. There also are agents who behave badly, give poor advice and disappear when the going gets tough.

For a large portion of real estate transactions, agents and their clients communicate and interact well, thank each other for their professional behavior, and walk away satisfied. But there are still a good number of problems in the industry, and I'd like to see better interaction between agents and their customers, as I think it would certainly help everyone.

In the meantime, I'll continue to call it as I see it.

My parents own the home that I live in. They would like to sell the property because they need the money. The property is worth at least $300,000. The only income I have is $140 per week in court-ordered child support. My idea is to get a mortgage for $230,000. I'd pay my parents $200,000, or something like that, so that they can have most of the cash value, but the bank would have some equity/collateral as an incentive to give me the loan. I could then use the extra $30,000 to pay the mortgage, which would be about $1,600 per month, until I get back on my feet financially or sell the property.

Is there any jargon or terms I can study up on, and does this sound possible, or can you make any recommendations?

This sounds like a good idea, but in reality, few if any banks will give you a loan if you have an income of $140 per week. That's an income of $7,280 per year. A 30-year, fixed-rate $230,000 loan at 6 percent would cost you $1,378 per month, and that doesn't include an escrow for real estate property taxes and homeowner's insurance premiums.

You would need to have income of maybe $100,000 to afford a home that costs $300,000, or you would have to have significant other assets to give the bank a reason to give you a loan.

If you are looking for a place to live and your parents can't wait to sell their home, you should plan to move out of your parents' house and into an inexpensive rental. With the cash they get from the sale, perhaps they can help you pay your rent until you're back on your feet.