- The Washington Times - Friday, April 6, 2001

When you bought a house back in the good old days, you signed a one-page contract. When you buy a house today, you sign 18 or 20 pages, maybe more. Believe it or not, that is an improvement. All those added pages add up to improved consumer protection for the most part. The documents represent disclosures, so buyers know what they are getting, and all involved know where they stand.

More paperwork is only one of a host of changes in the real estate industry in the past 40 years. Many of the changes are good; some are not. Some are two-edged swords.

Advanced technology fax machines, computers and cell phones is only the most recent of sweeping changes in the industry. Technology has saved everyone time and mileage on the car. New listings are available quickly on the Internet, and contracts are sent back and forth electronically. Transactions happen so quickly, particularly in today's hot market, that Realtors with some years of experience in the trade find themselves wishing for a chance to slow down and think, as they could in the old days.

For better or worse, those days are gone forever.

Gloria Thrasher remembers. She's a Realtor with Weichert's Chevy Chase/Uptown office on Wisconsin Avenue NW. "Forty-one years on the same corner," Mrs. Thrasher says. "Same office, same desk." Except, of course, the name on the building has changed. Mrs. Thrasher went to work for the Washington realty firm of Shannon and Luchs 41 years ago and stayed on when it was bought out by Weichert.

"The area has changed so. It has grown so," she says. Years ago, "you never talked about going out to Potomac unless you packed a big lunch… . Now people don't mind going further out. I was in Poolesville today."

Yet at the same time that distances seem to be shrinking, people are buying close-in houses, in Washington and Bethesda, for their convenient location. The difference is that the buyers don't simply move in and live in their homes. Close-in housing stock has aged, particularly in the city, and often it needs renovation.

"Now they purchase and improve," Mrs. Thrasher says. "They're buying location now and improving it. You buy it to make it your home, do the magic to it. You can't just move in and start living. That's why people are renovating to a great extent."

People have learned to accept the need to renovate because there aren't a lot of available houses.

"We're very low on listings," Mrs. Thrasher says. "This market's been progressively getting to a pitch for two years now, and we don't see any letup at all. It's become more competitive over past five years. You used to have time to think. Now you have to get right on it. The time to look and find your property is shortened."

The market is just as hot in Northern Virginia, says Rosie Harsch, a Realtor with the Tysons Corner office of Long & Foster. "Buyers are competing for everything that comes on the market. Builders can't deliver a house fast enough," she says.

Mrs. Harsch and Mrs. Thrasher both cited technology as a big help in real estate transactions. Both also cited traffic congestion as a big problem.

"The traffic [has] changed so much" since Northern Virginia was a largely rural suburb, Mrs. Harsch says. "It's so bottled up. Richmond does not pay attention to what's happening up here."

That isn't hurting the real estate market, she adds, and "it's a beautiful place to live, the tri-state area."

"We have good roads, and we have Metro. That's changed greatly," Mrs. Thrasher says. "But we never stop needing improvements. They're slow coming because of funding."

Some aspects of real estate are better than they were 22 years ago, when M. Steve Jacobson became a Realtor. Mr. Jacobson, of Brian Logan Real Estate on California Street NW, says, "Buyer agency is the best thing that has happened to the business because people are honestly representing a client rather than dishonestly representing them."

Twenty years ago, virtually all real estate agents represented sellers, and buyers mistakenly assumed an agent who took them out and showed them houses represented them. That agent actually was a subagent for the listing agent. The buyers not only had no representation, but might have confided something to an agent not realizing the agent represented the seller. Now, real estate agents "can honestly represent their buyer as a client, not just as a customer," Mr. Jacobson says. Also, he says, "we removed a lot of liability from the agent," who could be open to a lawsuit for misrepresentation.

Buyers have benefited from disclosure laws, Mr. Jacobson says, as have real estate agents. Unscrupulous sellers can't as easily hide defects. If they do and they are discovered, buyers have recourse but not against the real estate agent, he says.

"The liability is not with the agent, but with the seller," he says.

Mr. Jacobson also cites im-provements in both technology and attitudes.

"The fax machine has become the best thing for the buyer and seller and also the agent. I had an experience 15 or 18 years ago when we had a ratified contract verbally and I had the signature of the buyer. We had a snowstorm, and by the time we got back to the seller, another offer came in. I lost the sale," he recalls. "I thought they didn't want to sell to a black buyer."

Discrimination has diminished, but it still exists, despite laws against it, Mr. Jacobson says.

"I think there is virtually none today in sales," he says. The federal Fair Housing Law of 1964 outlawed discrimination in housing and, Mr. Jacobson says, "each jurisdiction has added protected classes to it."

"D.C. has more [protected classes] than any state. In addition to race, religion, skin color, age, sex, familial status (whether you have children or elderly parents living with you), Washington's protected classes include sexual orientation, appearance (for example, how you dress), matriculation (students) and source of funds," Mr. Jacobson says. "The only thing you can discriminate against is pets unless it's a seeing-eye dog protected under the Americans With Disabilities Act."

Mr. Jacobson cites as a major improvement the development of programs to help first-time buyers and lower-income buyers get a house, although he says that in today's "fast market, buyers have to make decisions without studying the property," and "I've seen property come back on the market frequently."

"I've seen an awful lot of property sold to people who weren't really qualified," Mr. Jacobson says, and they lose the houses to foreclosures. In Washington, he says, "there are lots of foreclosures in Northeast."

The programs have benefits, too, he says. The D.C. program that offers first-time buyers a $5,000 tax credit has been extended through 2002, he says. Although there are income limits, buyers who have owned a house elsewhere can qualify as first-time buyers in Washington, he says.

Patricia Vucich, associate broker with RE/MAX Capital Realtors on Wisconsin Avenue NW, says there were fewer loan programs when she became a real estate agent 22 years ago.

"For any buyer, but particularly for the first-time buyers, the loan industry is so huge and varied that loans may be tailored to suit virtually any situation, including buyers with less-than-ideal credit, with financial mishaps in their history, with little or no cash on hand," she says. "We know this to be true because homeownership is at the highest level it's ever been. The lending climate is more varied and generous."

Another change Miss Vucich has seen over the years is "a quicker turnover of homeownership. Homeowners buy and sell houses the way my parents and grandparents bought and sold their cars. I find that a big change, which may be a result of where we live. The Washington area tends to be fluid. People move around a lot."

She also cites buyer agency as a big improvement. "The playing field has leveled for buyers and sellers with buyer representation," she says.

Beau Brincefield has been in the real estate business for more than 50 years, first working part time on a housing construction site, then as a real estate broker and finally, for the past 35 years, as a real estate lawyer in Alexandria.

"I grew up in a construction family," he says. "My grandfather was a carpenter by trade."

"One of the biggest differences from a long time ago, there weren't any condos," he says. "The condominium concept came from Puerto Rico in the '50s and '60s, but no one could get financing for them. It was not until the late '60s and early '70s that you began to have any kind of a meaningful growth in condos in the United States."

"Condos are good because you can get more people on the same amount of land so the cost of land per condominium unit is much lower than the cost of land for a single-family detached home or a town house," Mr. Brincefield says. "Instead of spreading out several houses on the dirt, you build a bunch of houses up in the air. In urban areas where the cost of land is so high, it is more economical to get more units on the same amount of land."

Mr. Brincefield says he agrees that "buyer agency has been a huge change."

"The first person who started talking about buyer agency, about 15 years ago in Northern Virginia, they tried to run out of the business. He was [considered] a traitor. Buyer brokerage was a dramatic change."

"I'm an advocate of buyer agency," he says, "but I'm an advocate of real buyer agency. Buyer agency has become so popular today, everyone calls themselves a buyer agent. If you have a buyer agent that's really looking out for the buyer, that's great, but like anything else, it depends on what they know and if they're really doing their job."

"The biggest change in that arena is the awareness of the buyer," Mr. Brincefield says. "At least now, most home buyers know that they are better off with a buyer agent."

Most real estate transactions today "go through without any major problems," Mr. Brincefield says, but because he is a consumer lawyer, "the only situations I typically see are the transactions that have gone sour."

This has made him more aware of the types of problems that occur and the trends they point up. For example, he says, third-party warranties, new to the residential real estate industry about 40 years ago, now "are worthless. Most policies exclude 90 percent of the stuff you think is covered."

If a home buyer has a problem with something that is covered, Mr. Brincefield says, "you would have to make it your career to ever get through the maze that is the policy to get to the cheese that is the money."

He says the federal Real Estate Settlement Procedures Act (RESPA), passed about 30 years ago to protect consumers in settlements, "is a joke. Nobody enforces it. I think if the law were enforced, it would be a great protection for the home buyer. It's only the most flagrant and egregious violations of RESPA that [the U.S Department of Housing and Urban Development] even has the time to look at.

"One of the major changes in the industry is the consolidation of firms," Mr. Brincefield says. "There's been a tremendous consolidation. We used to have many, many, many mom-and-pop real estate offices. Now you have a handful of megafirms that represent 80 percent of the business."

Mr. Brincefield says simultaneous consolidation occurred among builders and lenders. "It has led to a greater desire for a vertically integrated transaction from beginning to end," he says. "The real estate office takes care of the whole nine yards. It's called one-stop shopping.

"They say they're going to save money for the consumer," Mr. Brincefield says. "That goes against the principles of RESPA, which are intended to give the consumer full disclosure concerning the costs of each aspect of the real estate transaction. We're talking about home inspections, we're talking about hazard insurance, we're talking about third-party warranties, we're talking about title insurance premiums, we're talking about settlement services, we're talking about financing, we're talking about brokerage fees. They just handle it all, from soup to nuts."

The current trend of bundling services could undermine the effectiveness of buyer agency, Mr. Brincefield says.

"The consolidation is going to further insulate the home buyer from outside independent protection," he says.

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