Note to builders: Please stop

2 years ago I was shopping for a house. We looked into a brand new subdivision in a the suburbs that was being built by KB. We found one we liked, worked it all out, put down a deposit, and "designed" it at the KB Store. It was not fun. If you've never done it before, selecting the options for your house at the KB Store is kind of like being the only customer in a Best Buy on Christmas Eve with 25 rabid commission-paid employees.

Who knew it could cost $600 extra to have a certain color of brick.

After further research, a miserable experience, and additional exploration of the area, we decided to bail out. We walked away because we decided buying a brand new cheap KB house surrounded by other cheap KB houses that all looked the same probably wasn't a good idea. It was the best decision ever.

I drove into that neighborhood to see how it was doing. Not surprisingly, "my" house already looks like a garbage dump and is for sale. Fifty bucks says its a foreclosure. Half of the other homes are also for sale, or "For Lease". If KBs apparent "take the money and run" strategy wasn't bad enough, they're still building houses. I have no doubt we'll be reading about KB and other home builders complaining at the loss of profits soon, and seeing some CEOs resign with multi million dollar severance packages.

Until then, they'll continue to build cheap houses, take more shortcuts on top of the shortcuts they already take, and flood the market with matchstick homes that will fall apart in 10 years, if not the day you move in. No one will want to live there, no one will buy them. These suburbs will be the new slums, taking on the ambiance now reserved for backwards rural trailer parks. At best, the land will be worth more than the house and they'll just be demolished, to be replaced by newer cheaper versions. Throw-away homes, bought and discarded like cheap plastic toys from Walmart. And in the wake of it all, families with foreclosures and bankruptcies.

If you ask me, subprime defaults are only the tip of the iceberg of what is to come in the US real estate market.

Sell your own house

A little article on CNN has some tips on selling your own house. You can save a bundle by cutting out the real estate agent who basically drives people to your house and saves you the agony of being there while they look at it. With the power of the Internet, RE agents are essentially worthless. I personally found my home on the Internet and did my own financing. The RE was "there", but he didn't do much that we couldn't have easily done ourselves.

6% commission is way out of proportion to what they actually do. You'll need to do a ton of research to sell your own house, but when you're talking about $10k or so in fees, it is well worth it.

I would hate selling right now though. Someone I knew was selling recently, and it was just a pain because many of the "buyers" couldn't secure financing and had to back out at the last minute.

Why did you take the ARM?

Countrywide is getting criticism for not permanently fixing the rates of several hundred thousand homeowners in risk of foreclosure. Part of this is being fueled by a protest group, NACA (or the Neighborhood Assistance Corporation of America).

If you take a look at their site, you will see all kinds of emotional statements designed to make you sympathetic to their cause, things that have nothing to do with subprime borrowers in foreclosure. Information such as "Chairman of Countrywide, one of the leading companies, is reported to have earned $22 million per year" seems to encourage the thought that because the CEO of a multi-billion dollar corporation is rich, he should forgive people who haven't been paying their mortgage.

These “geniuses” and their companies actually compensated their brokers and agents more if they marketed and closed loans containing abusive yield-spread premiums, low teaser and high re-set rates, and other costly loan terms and conditions

In other words, it worked like just about every commission based sale out there. Shocking that the company would give higher commission for a loan that makes the company more money.

Why on earth would the rates for these loans be so high? Why is lending to people with bad credit and lots of debt result in high rates? They answer it themselves: "almost one in every five subprime loan goes into default", yet they don't seem to make the connection. To be profitable, a bank has to get paid for the money it lends out. If a group of people tend to default at higher rates, their interest rate will be higher to ensure the bank doesn't lose money on those loans.

Modify every loan back to the rate at which these borrowers were or should have been qualified, and everyone wins. People can keep their homes and avoid financial ruin, and lenders can still receive payments on mortgages that borrowers can actually afford.

Here's the problem, NACA, they weren't qualified for payments they could afford. They were qualified for high interest adjustable rates, and that's exactly what they got. It is not the banks duty to set payments that someone can afford, it is the borrowers responsibility. What you are suggesting essentially shafts every single American paying a regular rate on a 30 year fixed.

These “genius” profit barons have pretended to create unparalleled homeownership opportunities for working people and families. Instead, they have preyed upon the most vulnerable, often based on a low credit score -- people with marginal credit and limited resources who could and should have obtained homes through fair lending practices. They charged people interest rates above 10% and often enticed them with teaser rates of 6% and less for the first two years.

The banks took a huge risk by putting these people into homes with teaser rates, when all the statistics showed that there was a high probability of default. To make such a venture profitable, they needed to charge higher interest rates later in the loan. These people could have used that time to rebuild their credit, save up to afford the new payments...anything. Instead, they rode along and when the teaser rate expired, cried foul. They can't refinance because, surprise, their credit still isn't any better.

Bottom line, it is not the banks responsibility to create a loan that is affordable to the borrower. Their only interest is in creating a loan that is profitable. It is the borrower's responsibility to determine whether that loan is affordable to them or not.

Banks don't want to foreclose. It costs money to foreclose. They end up with a house, which in all likelihood has been trashed by the deadbeat homeowner, that they have to sell for cheap at auction. They want you in your house, paying your mortgage, paying that interest. But because the group you fell into, that bad credit group, is a high risk and will default in higher numbers, your rate is higher in order to make up for the other deadbeats who do foreclose. Why is this so difficult to understand?

At the same time, some acknowledge that regardless of whether their loan is modified, some borrowers could lose their homes anyway because their financial situation is otherwise precarious.

"It all comes back to affordability," said Richard Pittman, housing services coordinator for ByDesign Financial Solutions, the Los Angeles branch of the Consumer Credit Counseling Service (CCCS). "As recently as 12 months ago, some were refinancing themselves out of their problems. A lot of them were just kidding themselves. They were fine through their second refi, but the third refi caused them problems."

Yes, I have read that a good number of these people in subprime loans in foreclosure, perhaps even the majority, are refinances. They refinanced equity to pay off their debts. This is the consequence of such a debtors lifestyle.

What is missing here? Case studies. No one appears to be asking these homeowners one very important question: "Why did you take the ARM?"...I would be very interested in hearing their answers.

The county tax office is in a sound proof cave

Home values are down. Many houses in my street are for sale, others for rent, and many are bank owned. They aren't selling well and prices are being slashed. Property values are just plummeting. The house down the street from me has gone up for sale 3 times this year. Another one has been sitting on the market for almost 2 years. This year and the next will be a low point in the value of my home, assuming it doesn't get worse.

But why worry about that when you can just ignore it? The county tax office has. My house has continually gone up in value in the middle of a housing crash. Whodathunkit. Its no wonder people are disputing their appraisals in record numbers. Also amusing, they have issued statements claiming a tax cut. Oh, our actual taxes in dollar amount has increased incredibly, but the tax rate has been slashed a meager .2%, and they think we're so stupid that we'll thank them for it. Yes, that sure will offset my 10% appraisal increase and ridiculously over-valued rate.

Disputing your tax appraisal is much the same in every state. You go in front of a panel of government officials, bring as much evidence as you can to prove what you feel is the real value of your property, and then try to make your case. In a few weeks you get a letter with your new (or old) appraised value. From what I hear from others who have done it, they usually lower your appraisal a tiny amount just to appease you and hope you won't appeal.

Of course unless you are a reasonably good public speaker, the whole procedure is pretty darn intimidating. I'm sure it's supposed to be.

Are speculators a blight in your neighborhood?

There is a house just down the street from ours that has remained vacant for over 2 years. I say over 2 years loosely, because it has been vacant since we moved into our house. It is a nice looking house - if it were taken care of. The yard is dead and only the weeds grow (it is mowed by a mowing service every other month or so). 2 large trees in front of the house are overgrown and lay partly on the roof, leaving the whole thing a dark blotch on the street. It's the kind of house that you always would think was haunted when you were a little kid. But instead of being an old rundown house, it's one less than 10 years old.

It once had a for sale sign, but was apparently purchased sometime last year. The sale sign is gone, but it remains empty. Undoubtedly the back has been broken into, because if you walk by and look in the windows you can see that kids have spray-painted on the walls (fortunately not gang related, more like funny cartoon pictures). It is supposedly worth $200k, but of course it only sold for $125k (less than my house that is half its size).

It is simply a blight on our neighborhood. A house bought by some investor and left to rot. Why they would do this baffles me, but I expect to see a for sale sign up again soon with no improvement to the property at all. It is just likely that the speculator will foreclose.

The sad thing is that they have no investment in the neighborhood, so they could care less how it makes the street look.

So, are broke speculators leaving eyesores in your community?

Mortgage loans are hard to come by

With less than perfect credit, mortgage loans are becoming scarce. Even prime mortgages are facing harder scrutiny in underwriting. It is a situation that has been growing slowly over the last couple of years as defaulting subprime loans everywhere hit lenders hard. Foreclosures, I read in a recent news article, are up around 50% now. So it was not surprising to me when a family member of mine called to tell me that getting approved for her mortgage was like trying to squeeze juice from a turnip.

Indeed, this article on the mortgage crisis perfectly described this situation. Some are just not funding any loans, even for those who had been already approved. And no doc loans? Forget it!

Wells Fargo, my mortgage lender, recently took themselves out of the jumbo loan market with a voluntary rate increase that is, needless to say, not competitive. Still others are downsizing their lending departments or getting rid of them altogether. American Home mortgage is in bankruptcy. Another laid off most of its workforce. Countrywide, one of the nations biggest lenders, has seen its stock value crash. The whole picture just looks awful.

I don't like dishing out advice to members of my family, but I did recommend finding an apartment to take time securing a loan. Even in this market, I'm sure you can find something just by taking your time. It just won't be as easy as it used to be. Lenders seem to be looking elsewhere, especially in areas that have been hit hard.

In the meantime, hold on to your houses. Based on a few people's experiences that I know of, its not fun to buy OR to sell right now.

Does "my house" = "my money"?

A comment in one of my articles reviewing a mortgage product got me thinking hard about the way we view our homes. What does a house represent? Sure its our homestead, where we raise our families and build memories. But is it an investment? Is it an asset or liability? Is it an ATM machine? Anonymous wrote:

in the 30 yr, I have to apply for HELOC 2nd or refinance again to get that money (MY MONEY) back!" Thus, I HAVE TO PAY (MORE MONEY)TO GET MY MONEY BACK!

What struck me about this was this idea that the HELOC was allowing us to get back "our money".

Is a house a source of cashflow? Let's look at that for a second. A house worth $200,000. You own it, you may or may not have a mortgage on it (so technically the bank owns most of it), you have (hopefully) "equity" in it. A HELOC is a "Home Equity Line of Credit".

If I buy a house, I've purchased something. The only way to really get my money back is to liquidate it. To sell it. Real estate is an "investment" because unlike just about everything else you buy, its value usually appreciates. So where do equity lines of credit fall in? Well, based on the value vs what I owe on the home, I can take out a loan using my equity as collateral.

How, may I ask, is this any different than going to a pawn shop and taking out a loan with a Rolex as collateral? Is that really "my money"?

It's a fallacy, I think, to regard your equity as money. It's not; it's simply the value of something you own. The only way to cash it out is to liquidate it. Anything else is simply a loan, a loan granted to you based on the presumed ability for you to pay it back because you have a large asset that you can liquidate.

However real liquid assets (cash) sitting in the bank earning interest does not equal a loan, where you pay interest. In fact, by taking out loans on your house instead of saving money and using that as your purchasing power and/or emergency fund, you are killing whatever "investment" your house might represent.

Borrowing money does not build wealth. A house is not an ATM. It is not "your money". When you take out a loan, any loan, you are paying someone else for the privilege. How is that "my money"?

Home owner's insurance nightmare

My home owner's insurance is a nightmare. I purchased my home two years ago, got the home insurance for around $700 a year. Then a few months later my mortgage company sends me a letter:

Did we forget to mention? You need additional windstorm insurance, we've happily applied some of ours at a hugely inflated rate for the few months since you've owned the house and adjusted your escrow to pay it. If you find your own insurance, let us know. Enjoy your new mortgage payment.

I wrote back complaining that they never told me about windstorm insurance and that I could have signed up for it in the first place, and didn't feel like I should be paying insurance for previous months for a disaster that never happened. Thanks for taking 3 months to bother realizing your mistake, and thanks to the insurance company and the mortgage company for never even mentioning that I needed this insurance. Oh, and thanks for telling me it's my fault and to pound sand when I complain about it.

So I go out and get my own insurance, which is cheaper, but my home owners insurance has still tripled. Our mortgage payment went up $200 (I inquired with a lawyer, btw, and they advised me that there was nothing I could do about it). Nightmare over? Hardly.

6 months later the insurance company that holds my windstorm policy goes bankrupt. So again I'm scrambling to find a new insurance company. I do, but now my insurance rate is again higher by a couple hundred dollars. Again, my mortgage payment (escrow) goes up.

Now my insurance policy is renewing. And apparently the complete lack of any hurricanes for the last 2 years is causing the rates to increase again! I get to pay another $25 a month for home insurance.

I'm going to shop around, but if its anything like the experience I had last year, the place I'm with is already going to have the lowest rate. Which begs the question; how much can we possibly pay in insurance before the citizens begin to riot?

Does a mortgage eliminate the benefits of investing in real estate?

Is real estate really a good investment? I had a few minutes free and used zillow.com and bankrate's mortgage calculator to run some numbers. I picked a house in my neighborhood that was around 10 years old and had an average price today compared to the other homes in my neighborhood.

The home was originally purchased for $110,000 in 1999. With a standard fixed 30 year mortgage at a reasonable 6% interest, your monthly payment would be $660. Today if you were to sell the house, it is supposed to be worth $156k. Last year (home prices have gone down a bit in my area - and will get worse as there are so many homes on the market now! my neighborhood is FULL of for sale signs, but anyway) the home was work $160k, the highest in a 10 year period. I'll go with $160 assuming you sold it in 2006 and got the best possible price so far.

Your profit would be $50k minus 5% sales commission or so, leaving you with $42k in your pocket. Assuming you didn't put down a large down payment, the interest you paid to the bank for 7 years was $44,001. You lost $2k in your "investment" even though your house value went up $50k.

So, what do you think? Unless you pay cash (so your savings earn you interest while waiting to buy and your house value isn't eaten up by the money you're paying the bank while you own) isn't mortgaged real estate a pretty bad investment, without seriously high appraisals? Maybe like the appraisals we were seeing until recently?

Just a thought.

The prada bag of the housing market

This is just too bizarre; KB Martha Stewart homes. Of all the decisions you need to make when purchasing a home, does the fact that it was 'designed' in part by a woman on TV living somewhere on the east coast fall under a high priority?

"I love all her things," says Menyon Green, a 42-year-old nurse who recently bought a Martha Stewart-KB Home in the Atlanta suburb of Fairburn, Ga. "I just knew this was going to be a good subdivision."

What? How do you know it's going to be a good subdivision? I'll admit it, I own a Martha Stewart frying pan. It was on sale and it looked nice. But a house? Whether or not you have a door knocker with Martha Stewart's face molded in bronze on your house doesn't change the fact that it's a KB home - not exactly a builder known for its high quality.

"Right now it's a unique type of offering," says Rita Rodriguez, chief executive of Enterprise IG in the U.S., a brand and design agency. "You can invite someone to your home and say, 'This is a Martha Stewart home.' But if it's replicated and stamped across too many odd markets, the uniqueness can be gone. That cachet and aspiration isn't there, and you just become like everybody else."

Maybe I'm old fashioned, but has it occurred to these builders that instead of signing up celebrities in cross-marketing schemes, they should just offer more than 6-7 floorplans? All the new subdivisions going up are full of houses that look exactly the same, with the exception of some trim there or a colored brick here. They also all use the same "style", brick faces with hardiplank siding. The garage is always on the front, the walkway leading along the side right to the front door, and to the side of it a flat or bay window. Some have brick all around, but none of the two story has all brick (the upper half sides/back are ALWAYS hardiplank) until you start getting into the custom or $750k+ homes.

open kitchens and dining rooms suited for entertaining, plentiful windows to capture natural light and an exterior trim available on some homes that supposedly matches the color of Paul Newman's eyes.

...okay.

Some buyers say they are attracted to the Martha homes because they suggest quality, functionality and class. Others say they expect the homes will have a better resale value than other homes.

Sorry, but the quality of your home is going to depend on the builder, not the designer. This partnership looks like McDonald's selling knockoff prada bags in happy meals. Resale value? How is tying the "designer" aspect of your home to a woman who probably won't be remember 30 years from now help your resale value? Remember, this is supposedly a home that should last 100 years. Do you think anyone then is going to care that it was designed by some celebrity? Martha Stewart never even saw your home, or set foot inside of it. She brainstormed floorplan ideas and color schemes with some team that pulled up 64 plans and started mass producing them.

Interesting:

"It's our version of the iPhone. It illustrates the power of something different with a brand tied to it,"

We're turning whole houses into fads now. Unfortunately, fad and trendy designs tend to hurt resale value in the long run, not help it. Remember all those $100k commercial/industrial stainless steel 800 sq ft kitchens that were all the rage? They're darn hard to sell now. That's what following a fad gets you.

So what ever happened to personal creativity and adding your own personality to your home?

"If I could afford to do it, I would do the whole thing Martha Stewart style," she says. "Matter of fact, I would like her to come to my house and show me how to do it."

So sad.

Trade in your house?

On the surface, this looks like a pretty good deal. Instead of the tradition of buying a new home while trying to sell off your old one, some developers are offering deals to trade in their existing homes for a new one. The catch is that the new one needs to be 20% higher in price than the one you're giving them. Of course we'll also assume you need to roll over any existing mortgage principle you have, and you are going to have to step up to a more expensive home. Depending on how long you've had your first mortgage, you may or may not be looking at lower monthly payments.

They also offer you around 95% of the appraised value of your home. Not bad when you consider a real estate agent would probably take 6% anyway.

Apparently the way the developer makes his money is by flipping it (trendy term for upgrading a house and selling it for more than you bought it for). Depending on your situation, this might be a good deal, especially if you were already planning on buying a new, more expensive home.

I wonder how much risk developers are willing to take? They are motivated to offer this deal because homeowners are having difficulty selling in the recent housing market, so how will that eat into the developer's profit?

Unfortunately, they don't give anywhere to read the fine print.

Dangers of Home Equity Loans

In a recent Bankrate.com article, Dave Ramsey talks about the dangers of home equity loans. I found this to be a fantastic read, and it's rare that I find someone who doesn't believe in home equity loans.

As for myself, I don't believe in them either, because I do not feel that risking your most valuable asset, your most important one at that, is worth the benefit of a slightly lower interest rate. Read Ramsey's full article, but the meat of it is that he believes that home equity loans lull people into a false sense that they've paid off their debt, when really they've just moved it somewhere else.

I often hear this humorous phrase, 'I paid off my credit card debt with a home equity loan.' That's humorous because you didn't pay off anything, you just moved it. It just has a new name.

And although he doesn't say it outright, the amortized interest on a 30 year loan for your Disney vacation and steak dinner is going to cost you far more than a higher simple compound interest credit card.

The problem, he says, is our behavior regarding debt. Once our debt vanishes into our mortgage and our of our mind, people continue to accumulate debt.

The figures that we're seeing are that about 80 percent of the people that move their credit card debt onto a home equity loan don't change their habits and continue to go into debt further.

Worse, it seems Ramsey feels from his experience that people do not fully understand the terms of their home equity loans.

They don't know if they've got a variable rate; they don't know if they have to requalify credit-wise every one or two years.

Perhaps they assume the terms are the same as their original mortgage? Of course, this isn't true. A home equity loan is a separate loan that simply uses the value of your house as collateral.

when they start tapping that because everyone at the bank is telling them what a great idea it is, when they turn their biggest asset into their greatest liability

All math and consumer debt behavior aside, this is the single most important reason why I think home equity loans are evil. They put at risk the most important 'necessity' you have. Losing a home can be the biggest financial disaster you can face.

Home improvements? Vacations? Repairs? This country has fallen in love with debt and easy credit. More debt is not the answer.

You don't need to go on vacation unless you can pay for it. If you have a home repair, in almost every case, that home repair is not an emergency situation. We put a nice patio with a screened-in porch on the back of our home a couple of years ago. We just saved up and paid for it, same with the vacation...When it comes to consolidating your debt, in almost every case mathematically, but certainly from a behavior modification standpoint, you're much better off to pay those debts separate from your home.

I have not read much from Dave, but I'll be keeping an eye out for his articles.

People think I'm a freak because I don't believe in these loans and stuff

I for one find it refreshing that someone is speaking out about these loans.

Home equity loans: Are you kidding?

I hate home equity loans. A few people are going to argue with me on this one, but let me offer a little perspective first. I see a home (at least, your primary residence) as a home, not an investment. There is nothing that could convince me to sacrifice the security that I have in my home. To me, equity is security. The more equity I have, the more security I have. That is why my personal goal is to become debt free including my mortgage. I want to own my home free and clear. Unfortunately, thanks to the laws of our government (the same government that years ago encouraged banks to sign subprime loans in order to increase home ownership and diversity) allows them to take my home away for nonpayment of taxes whether I own it or not.

That said, it is easy to presume that we never really own our home (well, we don't) we just lease it from someone else. We lease it from a bank at a high cost, we lease it from the government at a low cost. But let's focus on our relationship with the bank here.

Let's say I buy a home and finance $100,000. I pay for 5 years and have around $30,000 in equity (thanks to the principle I've been paying and the appreciation on the home). Now I decide to take the bank up on its offer (aren't they so generous?) to take out an additional home equity loan. I now owe $125,000. I'm still paying interest, I now have two loans so I'm paying more interest, and I've now borrowed more against my home than I bought it for in the first place half a decade ago.

And what do these home equity loans do? If I take the advertisements at the bank as any indication, they go towards home improvements, vacations, debt consolidation.

Home Improvements: Very few home improvements are going to provide a 100+% return. Worse, now that I've financed this home improvement, I have to gain a much higher return to get my money's worth. When I go to sell the house, that improvement simply isn't going to give back what I put into it in the initial payment and the interest thereafter. It's simply not an investment to improve on your house. If you want to do any improvements, you must save for it. You (hopefully) intend to stay in your home for many, many years. It isn't going anywhere, and you have plenty of time to save. Plus, your savings draw interest for you, instead of just making your home improvement that much more expensive.

Vacations: Do I even need to touch on this? It's very simple. Never finance a consumable! This includes gas, food, entertainment, and vacations. You continue to pay interest on the balance for many years after the initial purchase is long gone. What kind of crazy financial plan is that? If you must finance, at least keep it to physical things that retain value and can be sold if you need to pay off your loan.

Debt Consolidation: This is a fine goal, but there are so many different avenues for debt consolidation, I just don't think low-interest equity loans are the answer. You can get a low interest credit card or credit union loan instead. If you are in so much debt that you are considering consolidating, the last thing you want to do is pull out the equity in your home. It could lead to a financial disaster should you ever be forced in a position where you have to sell, and if you do need to do something drastic - like declare bankruptcy - it is still possible to keep your home through the process, something that is much less likely if you cannot afford the payments.

A home purchase should be considered final at the time of closing. Any further decisions regarding the home loan should be focused on reducing the overall principle and total interest that you pay out of the loan. Note, I did not say that changes should be made to lower your monthly payment. That may sound good in your head, but anything that reduces your interest liability and principle is going to reduce your monthly. If your monthly is reduced without those two, it is likely a loan that is going to land you in a financial black hole.

None of this applies to investment properties, which you hopefully won't be living in. But a home is a huge purchase, and you spend a huge amount of money getting into it and financing it. Long-term, any risk to that property is just a bad idea.

The problem with real estate agents?

According to this report, real estate agents are becoming increasingly unpopular as complaints rise. The real estate agent issuing the report claim this:

'I think possibly it's down to people being less ready to be satisfied with something which they perceived as poor service - given the size of the financial commitment that they're taking on by buying a house.

I completely disagree. While some real estate agents may provide poor service from time to time, I feel there is a fundamental problem with the way real estate agents do business. The problem stems not from the agents themselves but from the industry in which they operate. The entire system puts the buyer at a disadvantage and drives up the price of homes.

The agent on either side, either buyer or seller, makes all of their money through commissions. The higher the final price, the more the agents get. This makes perfect sense for the seller. They want their agent to sell their home for as much as possible. But the buyer's agent also wants it to sell for as high as the buyer is willing to go. That doesn't give the buyer's agent much of an incentive to haggle down the price, does it?

What's the solution? Base seller commissions from the sale price, base buyer commissions off something else entirely. Perhaps buyer commissions can be based on the value of the asking price verses the selling price. The buyer's agent gets paid more when the final price is lower than the asking price. To make it fair, increase the standard percentage that the agent receives. This puts the agents in the position of competing with each other for their commissions, rather than pushing the price up for their mutual benefit.

If the new 21st Century commercials are any indication, real estate agencies know that their usefulness is coming to a close (if you have seen these commercials, apparently one of the most important jobs of a real estate agent is watching your eyes light up as you enter a home and knowing that you love it) with the Internet becoming increasingly more useful for finding everything from the home to the mortgage, insurance and title company. There needs to be some advantage for a buyer to bother with using an agent. So far, their usefulness is dwindling.