A wealth of knowledge is key to understanding every problem. Although each of us leads a busy life, we should take the time to understand key political, legal, socio-cultural, and economic issues because eventually they will effect us, and one should know the who, what, when, where and why’s. So, for those of you unfamiliar with the ins and outs of the latest real estate debacle keep on reading.

Although there are no definitive resources for marketing real estate books, as there are for the mystery, romance, or horror genres, right now, there is an advantage to being a real estate author. The real estate industry is at its peak in news coverage, and so authors should be driving their book sales using media coverage to their advantage. Every real estate author should be coming out of the woodworks and offering their opinion to spike book sales, so why not take advantage of this situation? Many companies are, so hop on the bandwagon.

Use your knowledge and join in with blogs, write a few articles for newsletters, contact newspapers and offer yourself up as a possible candidate to interview, or reference. You should be working hard to get your book some good PR through any of these options. It is always advantageous when an event is covered so fervently in your field. Since real estate is so crucial to the world now, it is time to let one’s expertise shine in the moment. Get yourself some coverage!

In the meantime we all should keep in mind that the real estate industry is complex, and is only cracked open to the public when it is thrown into turmoil. Most of us just see the industry as buying and selling houses, just as some see the publishing industry as buying and selling books. Yes, this is the basic foundation behind the industry, but there is a lot more that goes on behind closed doors. Beyond the fundamentals, everyone should know some basic vocab to get them through the next 6 months of newspaper articles. And, it is no wonder we stick to the basics when we start with our first word, mortgage…meaning dead pledge*:

Mortgage: etymology of the word means: dead pledge. A mortgage is basically using your own property as collateral against the debt you incur. In other words you use your house as a guarantee that you will pay your loans, otherwise the bank can take your property.

Foreclosure: This happens when you fail to comply with your mortgage, defaulting on payments for a consecutive amount of time (depends on terms of contract). A bank repossesses some of the real property owned by the investor.

Predatory Lending: When a lender convinces a borrower to unfair terms in a mortgage agreement. Sometimes these include some sort of collateral (such as the home itself) or charging high interest rates. This has caused a lot of the recent foreclosures. Individuals who were not financially secure were given loans that increased because their interest rates were not fixed. As the interest rates rose, their monthly payments rose and they defaulted on their loans leading to foreclosure.

Housing Bubble: A kind of economic bubble that happens in local real estate markets. It is caused by increases in house prices beyond their actual value sometimes because there is a high demand for property in that area. With the increased rate of foreclosures, one could say that there are now an abundance of houses on the market adding to severe price decreases. In other words let’s you got a loan for a $250,000 house. The bubble caused the house to be valued at around $300,000. But now, as prices have crashed and there are a lot of houses on the market, it is valued at $230,000. Add in the increased interest rates (if you do not have a fixed rate), and you are paying off a loan that is worth more than your house is.

Fixed versus Adjustable interest rates: The lesson learned (if you have read the examples above), is get a fixed rate mortgage, and get fixed in when the rates drop. Watch the market closely as the government has talked about cutting interest rates, and it may be in your interest to refinance. Fixed interest rates stay the same, and adjustable rates vary. In this case, some interest rates have almost doubled over the course of a few years, meaning that monthly mortgage payments have become too much for some families and individuals across the country.

Refinancing: When one decides to apply for a new loan to replace the initial loan, using the same real property. Most individuals do this so that they can get a lower interest rate, or use extra money (if the loan is larger) to do additions and add value to their house.

Case-Shiller Home Price Index: “...measures home prices based on recorded changes in home values and a repeat sales methodology.” This is said to be the most accurate measure of a home value. (Source: www.macromarkets.com)

Sellers Market vs. Buyers Market: During the sellers market, the seller is able to take advantage of economic times and price accordingly, meaning housing prices will spike. During the buyers market, homes may sit on the market, and cause a decrease in price—making it more attainable for people to purchase homes. This all pertains to the supply and demand of the area.

With the number of people having to default on their loans, increased foreclosures caused by increased interest rates, and the overall median price of houses about to drop this year in the United States, authors should take advantage of the current trend of news coverage. There are a lot of factors that need to be explained beyond the basic understanding of vocabulary and the buying and selling of properties. There are a lot of individuals that do not know what to do in their current situation, and have little knowledge of the Industry. This is where you get to step-in and do some good deeds, act on your expert knowledge, inform the public about what is going on and promote yourself and your book at the same time.

*Please note that the content of the article above is not legal advice, and is merely the opinions of the authors.