Fact or Fiction? The Best Sources for Reliable Real Estate News
By: Teresa Bitler
Personal Real Estate Investor Magazine
March/April, 2009
It’s the best of times; it’s the worst of times. Sometimes, real estate news can seem just as contradictory. Separating real estate fact from real estate fiction isn’t easy, but here a few simple pointers to get you closer to the truth.
JUST BECAUSE IT’S ON TV…
“A few months back, I was doing an interview with Larry King, and a ‘supposed’ real estate expert on the show with me provided blatantly incorrect information regarding short sales and taxation,” said Jeremy Brandt, CEO, 1-800-CashOffer, a company the helps investors with branding and marketing. “Millions of viewers got false information about short sales, and unfortunately the segment was over before I could correct the error. Viewers likely saw it as fact even though it was not true.”
Intentionally or not, many so- called experts provide misinformation. Just because someone is quoted in the Wall Street Journal or appears on Oprah doesn’t mean they know what they are talking about.
Brandt says, “When sorting through real estate fact versus fiction, start by asking yourself, who is this person providing the information? What do they have to gain by providing it?”
PUMP & DUMP?
Follow the money when evaluating the quality of information. What does the person or business stand to gain financially by giving you one opinion versus another? The most glaring example is the S&P/Case-Shiller Index where the relationship between their index and their for-profit fund was outlined. They deny conflict in talking down a market where they sell long and short positions. This smells awfully close to insider equities “pump and dump” trading but then it’s real estate!
In the case of the S&P/Case-Shiller Index the experts are commodity analysts trying to normalize a very irregular market that defies averages.
WHO/HOW DO THEY EARN THEIR KEEP?
Dave Muti, a senior mortgage planner and author of Mortgages: What You Need to Know (2008 Pocket Guide Press), said this is especially true when it comes to mortgages. The majority of experts commenting in the media about mortgages are actually financial planners, not mortgage brokers, he said. Or, he points out, the media often likes to quote people in “ivory towers,” the vice president of some major corporation. These are not the people who are in the trenches working every day. “If it’s not someone in the trenches, take what you hear with a grain of salt,” Muti said.
ANALYZE THE DATA
Always look at the data. If someone quotes a study to make a point, go to the source and see for yourself. Data that is not available is not available for a reason. That’s something Amy McKeever sees in her position as vice president of communications for Criterion Global, an international real estate marketing consultancy. One of her duties is blogging. “I am constantly researching, weeding through juicy headlines that are filled with junk information,” she said. Recently, she read an article claiming that 91 percent of Russians are looking to buy real estate and 48 percent of those want to buy in the next six months. She could have just posted the information on her firm’s blog, hut she decided to ask for a copy of the study behind the story. She received no response. Broker and real estate blogger Heath Coker points out that even if you are able to obtain the data or study behind the headline, you need to question what you are looking at. “All data is not fact,” he said. “Data provided by someone with a vested interest is suspect.” He recommends confirming the facts behind a story with multiple sources. Even real estate reporters at local newspapers can have unconscious biases especially as major media chains get rid of senior (once highly paid and valued) writers. The replacements are junior writers, often renters, who now are tasked to write about home buying.
GET MULTIPLE SOURCES
Don’t accept any one person’s or source’s information as truth without backing it up. Rod Holmes, managing editor of www.TheChicago77.com, an online real estate news source for Chicago, begins his day by reading approximately 15 RSS feeds for local real estate news and another 15 RSS feeds for national real estate news. “I only trust a blog post or even an article in a reputable newspaper if I can do one of several things to make myself a believer,” he said. Those “things” include confirming the accuracy of referenced studies and reports, looking at the MLS, and consulting with brokers, agents, attorneys and other people he trusts.
REAL ESTATE IS LOCAL
Broker Richard Yeager says he checks several different sources, especially when the information in question is something being reported at a national level. “Real estate is local,” he said. “While there’s doom and gloom in California and Florida, nothing like that is happening here in the Adirondacks.” Yeager checks public records at the county clerks’ office, listens to buyers’ and sellers’ comments and consults the local MLS for current statistics. “Combine everything, and you can get a clear vision of what the local market is doing and where it is going.”
TAP INTO YOUR OWN EXPERIENCES
It helps to reality check what you are hearing or seeing against your own experiences, according to Holmes. He said while reading news feeds for www.TheChicago77.com, he “taps into” his own experiences to see if he needs to dig deeper. “I know the basics of what is going on in the market, and if the information or numbers seem strange, I look into it.” Denny Grimes, an agent and a real estate columnist for The News-Press in Fort Meyers, Florida, adds that you should always have a point of reference, a compass to help you sort through the information you hear. “When you can no longer trust your feelings, you need an objective instrument,” he said. For Grimes, that instrument is inventory. “Any good pilot learns to trust the instruments because they will never lie.”
EDUCATE YOURSELF
“The real key to decoding fact from fiction in the real estate world is education,” Brandt said. The more knowledge you have when it comes to real estate, the easier it becomes to discern reality. And, always confirm what you hear or read. “Get an opinion on real estate matters from multiple, trusted sources. If they all agree, chances are you are dealing with facts, not fiction.”