In its latest survey of home buyers, the National Association of Realtors announced that 43% of first-time buyers used 100% financingt o purchase their home. NAR president Tom Stevens said, “I think if the number was higher than that I would be concerned.”
Uh…Tom? The NUMBER in your survey is more than 4 out of 10 home buyers! At what point would you “be concerned”? Is 43% using 100% financing good and 53% bad? How does that work? And who writes those rules?
I think if the NAR is going to work so hard to improve the image of real estate agents everywhere, then it needs to make sure that when the group’s president addresses the media, he makes sense!
Now, I’m not saying that 43% of new home buyers taking advantage of 100% financing is bad. And I’m not saying it’s good. Because in and of itself, it’s neither. It all depends upon the context of the deal. For instance, if I’m taking advantage of 100% financing because I’m buying a fixer with plans to rehab and flip it within a few months or a year, then 100% financing might make perfect sense — it helps leverage my position. On the other hand, if I’m using 100% financing to mask the fact that I may not be quite ready to assume the financial obligations of home ownership…that’s not quite the same. And I could be setting myself up for some real difficulty down the road.
But to ignore logic and instead say something that just makes you scratch your head and say, “Huh?” Well, that kind of behavior just works to undo the effect of all those “Friendly & Knowledgeable Realtor” TV spots that the NAR spends millions of dollars to produce and air. C’mon, Tom…please get with the program!