In the real estate world, there was one word — repeated three times — that used to be the cardinal rule: location, location, location. Just about anybody could buy a house in a good location and easily make money by flipping, selling, or refinancing the home.
The new cardinal rule of real estate is information, information, information.
“For decades, the real estate industry has operated under the principle that the less information buyers and sellers have, the better it is for agents, lenders, title companies, and all the other folks who eat from the trough,’’ writes Ilyce Glink in “Buy, Close, Move In: How to Navigate the New World of Real Estate — Safely and Profitably — and End Up with the Home of Your Dreams’’ (Harper Paperbacks, $14.99). “But the real estate tide seems to be turning, as the housing and credit crises of 2008 have heightened awareness in Washington, D.C., and on Wall Street about the catastrophic consequences of a closed information loop.’’
I have no doubt that many professionals in the real estate industry will take great exception to Glink’s observation. But the evidence is on her side. We ended up in one of the worst housing market collapses because far too many borrowers were uninformed, ill-prepared, and overly optimistic about potential gain because of bad information they received and gladly embraced.
Glink has spent years covering the real estate industry and that’s why for August, I’m recommending her book for the Color of Money Book Club.
Glink is also the best-selling author of “100 Questions Every First-Time Home Buyer Should Ask.’’ She coauthors a syndicated column, “Real Estate Matters.’’
In her new book, Glink looks back at what happened and then forward to what’s to come in the real estate market. As she reports, millions of people have seen their home values plummet. One group of economists has suggested that housing prices won’t recover until 2017.
But this book isn’t all pessimism. It’s also a guide to help buyers and sellers navigate the new world of real estate. Glink offers advice on what to do in a new era of declining home values, the changing role of Fannie Mae and Freddie Mac, fixing your credit, calculating what you can afford, and snagging a house through a short-sell or foreclosure. She even ventures to help those still interested in investment property.
I think you will find the section on the 10 things that have changed in real estate sobering. If you’ve been looking for a home, you know that number one is that you need a lot of cash. The industry has long known that the more money someone puts down on a property, the less likely the person will default. In this case, an old rule is the new rule.
This is the worst of times and the best of times for real estate. It’s up to you to determine if this will also be the age of wisdom or the age of continued foolishness.
Michelle Singletary is a columnist for The Washington Post. She can be reached at singletarym@washpost.com. 
