Ban the word ‘equity’

With the direness of foreclosure projections being revised to the worse, I think it’s time to officially and legally ban the word “equity” from real estate agents, realtors, mortgage brokers, etc. in any part of a home sales pitch.

Picture going to your Toyota, GM, Honda or Ford dealer. If the salesperson, after complimenting you on your eye for vehicles, said, “And you’re building up equity when you buy that,” you’d laugh in his or her face.

But people go along with the same schmuckery all the time when buying a home.

No, you’re not buying equity at all.

Given that today’s cookie-cutter suburban tract homes have a planned obsolescence that basically comes due about the day the warranty expires, you’re actually buying yourself long-term repair bills at the 30-year mark.

Given that everybody else in the same neighborhood probably believes that equity crapola, too, you’re buying midterm remodeling bills at the 10-15 year mark.

Oh, and if your repairs are good enough to raise the price of your home, you’ re buying yourself a higher tax bill, too.

You’re not buying “equity,” though.

Buy a home as a residence, not an investment. Buy something MUCH more affordable, and invest in an actual investment. Maybe something safe, like CDs or slightly more “open,” like a market-based CD.

In most parts of the country, at the 30-year mark, you’ll actually have more money this way than if you bought a fancy new home for “equity.”
I’m serious on the banning. If I were the president, the Platonic philosopher-king or the head of the Federal Trade Commission, I would ban the word “equity” as false advertising.