Realtors Must Stop “Playing Dumb” on School Quality

September 30, 2010

Zipped LipsAsk the average guy on the street about the quality of schools in the District of Columbia, and he’ll tell you that it’s not too good.

Ask the President of the United States about whether the quality of D.C. schools is comparable to those of certain private schools and (on the Today Show and reported in the Washington Post) he’ll say:

“I’ll be blunt with you: The answer is no, right now,” Obama said. D.C. public schools “are struggling,” he said, but they “have made some important strides over the last several years to move in the direction of reform. There are some terrific individual schools in the D.C. system.”

Ask a Realtor about public schools in D.C. or elsewhere, and you’ll hear: “Well, umm. I really can’t say. I’m not permitted to say. So I really can’t help you. Sorry. But I encourage you to check online. And talk to some parents of kids who go to the school. Try calling the PTA. Or talk to the school principal.”

What?!?!?!

I acknowledge that a school that’s great for some kids may be terrible for others. I’ve written about that before from personal experience. My son attended an elementary school with a great reputation. But it was absolutely a horrible experience for him. And I’m not picking on D.C. schools. There are plenty of other examples, good and bad, out there. So it’s true that you can’t accurately sum up an entire school with a grade of “A” or “F.”

Still, there’s a growing focus on the quality of education in the United States, and how it compares to that in other countries. There’s the movie Waiting for Superman, which is attracting a huge amount of interest and focusing laster-like attention on our educational system.

Ignoring realities doesn’t help buyers. Refusing to share expertise and perspective on quality of school doesn’t help buyers. From the Preamble to the Realtor Code of Ethics:

Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. . . .They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment. Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which REALTORS® should dedicate themselves.

Are these goals–creation of adequate housing, development of productive industries, preservation of a healthful environment–possible if, in our professional roles, we deliberately ignore educational successes and failures? If we ignore reality? If we deliberately withhold information from clients and customers?

I think not.


Government First-Time Home Buyer Tax Credit Can Be Used For Closing Costs, Interest Rate Buy-Downs

June 6, 2009

New home buyers seeking to use the 10% tax credit can use that money up front to help pay for closing costs or to “buy down” their mortgage rate, according to the U.S. Department of Housing and Urban Development.

That’s significant: While the 10% tax credit is great (buy an $80,000 property; get an $8,000 tax credit), buyers used to have to wait until they filed their tax returns to actually benefit from the credit. Now there’s a way to instantly monetize the credit.

And although the tax credit can’t be used for the minimum 3.5% downpayment required by FHA, it can be used to supplement it. And numerous states offer buyers programs to help cover that 3.5%.

[For information on the tax credit itself, see my earlier post at https://realestatesolutions3d.wordpress.com/2009/02/24/first-time-homebuyer-tax-credit-fact-sheet/ ]

Here’s a summary from the National Association of Realtors:

Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

The loans can’t be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.

There remain many sources of assistance for buyers needing help with the 3.5 percent downpayment, including many state and local government instrumentalities and nonprofit lenders.

In addition, some state housing finance agencies have developed their own tax credit bridge loan programs, so buyers in states whose HFAs offer such programs can monetize the tax credit upfront to cover all or part of their downpayment. These programs are separate from what HUD announced today.

The first-time homebuyer tax credit was enacted last year–and improved upon earlier this year–to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven’t owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment.