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It’s The Media’s Fault…

by Peter G. Miller
February 2nd, 2009

I got a call a few days ago from a Marketplace producer with American Public Radio. They supply radio content for stations nationwide, including many stations within the National Public Radio (NPR) network.

It seems an unnamed real estate broker in New Hampshire had complained that the “media” was not doing its part to alert the nation that you can still buy real estate with less than 20 percent down. Marketplace felt there was some justice to the listener’s view and thus wanted to do a story looking at FHA loans.

Fair enough. The interview they ran over the weekend can be found in text and in voice at http://marketplace.publicradio.org/display/web/2009/01/30/fha_loans/

I find it hard to imagine that any adult humanoid does not know you can buy real estate with less than 20 percent down. Ignoring the “no money down” crowd, there are some 2 million real estate licensees ready to explain in great detail that financing with little down is readily available through the FHA mortgage program.

Thus, the idea that the media is not getting out the word is nonsense. It’s obviously not true. Moreover, it’s not the media’s job to promote the real estate industry.

If the media has missed the story there is certainly no lack of unfailingly-positive bloggers and real estate publications which will provide you with 1,700 reasons why you should buy real estate now, buy today and buy often.

The idea that the public does not know about FHA loans and the ability to buy a home with 3.5 percent down assumes that much of the public is, well, uninformed. It’s a nice, convenient explanation for the current home sale slowdown, but it’s ridiculous on its face.

People don’t need news stories to see that job opportunities are evaporating — they can just look at the empty stores in their town. They don’t need the nightly news to know that the official government debt after four years of surplus went from $5.7 trillion in fiscal 2000 to $10 trillion in fiscal 2008 — we can see that our dollars buy less each year. And people can certainly look in their retirement accounts to see that they have less money.

The good news, at least for buyers, is that you really can use FHA financing to buy with 3.5 percent. Usually one would say that you also have to cash for closing costs, but in an environment where homes are tough to sell owners will increasingly chip in a “seller contribution” which is sufficient to pay all closing costs — it you’re a buyer then you should certainly try to get some or all settlement expenses paid by the seller.

Of course, when home sales were strong and prices were rising I don’t recall any real estate broker blaming the media….just a thought.

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