This week, the 3rd Edition of my book, 100 Questions Every First-Time Home Buyer Should Ask, is being published. I wrote the first edition of the book in 1993 (it was published in 1994), just as I was starting the “Real Estate Matters” column.

You never know these things as you’re going through them, but 1993 was a turning point for many home buyers and owners.

Interest rates fell below 7 percent for the first time in years, and the refinancing boom began in earnest. Homeowners in California, who had been hard-hit by base closings, job losses and a severe reduction in their home value, found for the first time since the late 1980s, that they were at least breaking even, if not making money, on the sale of their homes.

Things we take for granted today didn’t really exist a decade or so ago. Today, 70 percent of home buyers start their search for a home on the Internet. In 1993, most people had just begun to hear of a small company called America Online. In fact, as I was turning in the final draft of the manuscript for my book, the last thing I did was to sign up with AOL and put my new email address in the book as a way to contact me.

(The last thing I did before sending the 2nd edition of my book off to the publisher in 1999 was to create a website,

You didn’t have 2 million listings on the Internet in 1993. Or hundreds of thousands of real estate-related websites. You couldn’t email your agent. Most real estate companies shied away from the web, afraid that they would be revealing too much information in a medium they didn’t understand.

Google didn’t exist, so you couldn’t instantly look up the seller disclosure or home repair fraud statutes in your state or even the phone number for the state commission on real estate. You couldn’t find 360 degree color photos of gorgeous vacation homes to rent in Mexico or the coast of Latin America, or castles and manor houses in England and Scotland, or hotels in Goa, India.

The Internet has also had a profound effect on the commission sellers pay to agents. Ten years ago, the average commission was still around 6 percent. Today, the average commission is 5.1 percent, according to the National Association of Realtors.

Discount brokers and Internet-only companies have sprung up in force, making the real estate market more competitive. Increased competition has give sellers the ability to ask for, and get, a lower commission rate. In some parts of the country, real estate agents are “unbundling” their services, allowing home buyers and sellers to pick and choose what they want to pay for.

Financing, too, has changed dramatically since the mid-1990s. Today, our credit scores dictate everything from what kind of a mortgage we can get to the insurance rates we pay to the credit card interest we’re charged. Many employers are now pulling a copy of your credit score before deciding whether or not to offer you the job.

Lenders now offer zero point loans, zero-cost loans, 103 percent loans (which include the cost of points and fees in the loan amount up to 3 percent), and the new FHA loan which will give home buyers up to $15,000 in cash after they close in order to pay for home improvement projects.

And then there is the fantastic rise of interest-only loans. In 2001, interest-only loans accounted for maybe 1 to 2 percent of all loans. Today, nearly half of all adjustable rate mortgages are interest-only loans, according to Amy Crews-Cutts, deputy chief economist at Freddie Mac.

In the early 1990s, interest-only loans were specialty loans reserved for high net-worth individuals who wanted to preserve their equity for other investments.

Today, many home buyers use interest-only loans to buy a bigger house than they would otherwise qualify for with conventional fixed-rate financing. And, economists worry that these folks don’t understand what will happen when their interest-only loan adjusts, and their monthly payment doubles.

But after spending the past 11 years interviewing thousands of people for my real estate columns and books, I’ve come to the conclusion that most home buyers “even first-time buyers” are sophisticated enough to know what to do when their mortgage payment becomes too expensive: Refinance.

May 23, 2005.