Somali Real Estate Giant

[xiinfaniin]

Originally posted by ThePoint:

^Here's the situation. A real estate agent is a middle man between buyer and seller. He makes money through a commission on homes sold. How the homes bought or financed is not in his purview.

^^You made it sound like he is an independent middleman. As I understand it, the man is working for a riba-based institution.

 

Allah wax ka fiican ha ugu beddelo…

[ElPunto]

^Talk about placing endless restrictions on Muslims! When islamic financing is approved by Sharia boards and other scholars - I'm not sure where you come in and say it's all wrong.

[ElPunto]

^Ok Xiin - just took a look at the website. They do provide financing and most of their clients do choose their financing. So yes - allah wax ka ficaan ah siiyo. But most real estate brokerages do not offer financing - they simply refer you to the bank. A real estate broker who is simply a middle man is not a haram job.

[Gediid]

^^^I hate to answer a question with another question but do you think a loan borrowed from Wachovia or Bank of America by Guidance Financial is riba free??

[Gediid]

^^^I hate to answer a question with another question but do you think a loan borrowed from Wachovia or Bank of America by Guidance Financial is riba free??

[xiinfaniin]

^^Gadiid, you sure can escape if you understand what Islam is objecting to. Islam does not object to profit rates that are put on commodities. The practice of lending money to make money on it does not sit with our basic Islamic teachings of doing business. That’s what the Mortgage companies do. I think Guidance Financial is different and is sharia compliant in its practices. It does not lend money. It invests in a joint business venture, like a peace of real state for residential/business purposes. When you buy a house from Guidance, the profit rates they charge are probably the same as the conventional interest rates--you don’t get a break from that. What’s different is that they don’t lend you money and put a rate on it. Instead they jointly invest with you in a certain product, and equally share both burdens and profits. It’s called mushaarakah.

 

So Guidance Financial is a xalaal entity and you shouldn’t confuse people by saying that they are a mere front for Banks adeer.

[ElPunto]

^I see - it's not enough that scholars and others have examined these transactions and approved - you must impute riba into it through your speculations. I don't know where Guidance Financial gets its loans - I don't even know who they are. Nor do I know what the terms of these loans are. What I do know - that any claim of Islamic financing is examined thorougly by scholars, approved under the right conditions and monitored carefully for the duration. Now what do you know or will you continue with speculation??

[Gediid]

Xiin

I understand how lending in Islam works.It is based on the idea of profit and loss sharing but not on interest accrued over a certain time period fixed by the lender which the housing industry in America and the west is generally based on.And as far as I know there are no if's and buts when it comes to riba.What Guidance does is they borrow from a bank who charges Guidance a certain percentage as interest.Guidance in return adds the calculated interest of the loan with profit to the amount borrowed as a lumpsome.

A simple mathematical illustration of how this works.....

Assume I apply for a loan of $100

Guidance will borrow that loan from a bank at an interest of 5%....They will add a profit of 2% thereby making the total interest on that loan at 7%.Guidance will then add the 7% to my loan and say I now own a fixed loan of $107 payable in 3 months.

Now under Islamic condition if that loan makes me a profit of 50%,I am liable to share my profit with Guidance and vice versa if there is a loss....But this is not the case here,instead all Guidance wants from me is their fixed monthly premiums

Now is that Islamic I doubt and for the second part of your question read on......

 

ThePoint

 

You sound like a friend of mine who recently bought a house through Guidance.....He gave me all the same examples you just mentioned.

 

In America buying a house is everyones dream.This is also the benchmark to determine the strength of the country's economy.As such its a heavily regulated sector which the govenment invests heavily in.This is where Fannie Mae and Freddie Mac come in.On behalf of the government,they underwrite all mortages provided by the financial institutions for a percentage of the real loan, normally a small percentage over the course of the actual loan period.The lending institution in return also charges a certain percentage for the loan but then again you will not see that broken down in your paperwork.Instead you will only be told of an interest rate of %%%%.

I hope that brief intro into the mortage business will make you understand how this works unless of course you know of a "Islamic Mae" that exclusively underwrites loans for Muslim home buyers provided by Guidance and their likes which would totally validate your whole argument that these transactions are wholly in compliance with the Islamic form of lending but until that happens I will not trust any comapany that brands itself Sharia compliant.....

[Zafir]

^^Hmm. Interesting, I somehow came to be aware of a different notion all together. Well, out here in Canada anyway. The Islamic lenders are made up of bunch of people who are putting up the money to purchasing you home. (eg. Your home is $200.00 and you put down $5.00, Islamic lenders put down the rest of the payment making them the owner of you home along with your name, making your goal to pay them off. Now, your monthly mortgage is for instance $2.00, they take $1.50 and $.25 cents to the broker for his fee's, thus, making $.25 towards your principle, until your renegotiation in five years)

 

Do I have it all wrong here? I am pit confused Gadiid and The Point and Xiin

[Gediid]

Zafir

2 questions

 

1-Are the lenders using their own money?

2-What happens if you decide to sell the house at a value below what you bought it for,for example $50 before the loan is up, will the lenders be willing to share the loss incurred on the house or do they want their original loan back?

[Haneefah]

Originally posted by Faarax-Brown:

Thought i would pull a

Khayrie

It's called amr bil macroof dear, not pulling a 'Khayrie'! :cool:

[Sophist]

Haneefah; I like that though some of the other's comments smells of iney qaraaraayaan!

[xiinfaniin]

^^lol@iney qaraaraayaan.

 

Gediid,

if you concentrate solely on the business transaction between you and Guidance for a minute, you would find very hard to poke holes on this Group’s model. As a Muslim, you are not required to verify the validity of the finacial source from which they get their original investment. edit: or are we really required to do that?

 

What you need to worry about is if the deal between you and them is Sharia-compliant. In this case, it is. As far as I can understand all the elements of Islamic bayc are met. It’s a joint business venture; a co-ownership between you and them where the losses and the profits are proportionally shared, and where their balance declines and yours increases and ultimately leads you to a full ownership of the home. As I said before your knowledge of the source of their financing does not add any value to the validity of their model.

 

Again, what matters is the actual business transaction, its terms and conditions, and whether it adheres to the basic requirements of the Islamic commerce.

[Faarax-Brawn]

Originally posted by Haneefah:

quote:Originally posted by Faarax-Brown:

Thought i would pull a

Khayrie

It's called amr bil macroof dear, not pulling a 'Khayrie'! :cool:

Edited version should read: Thought i should pull a amr-bil-maroof wa-nahianil munkar like Khayr does every so often.

 

There you have it Eedo & JZK

 

Ps. Sophist,I dont think mentioning something evil & bad to a fellow muslim equates qaraar, if anything it shows compassion & love to the affected brothers

[Zafir]

Originally posted by Gediid:

Zafir

2 questions

 

1-Are the lenders using their own money?

2-What happens if you decide to sell the house at a value below what you bought it for,for example $50 before the loan is up, will the lenders be willing to share the loss incurred on the house or do they want their original loan back?

Gediid,

 

The answer to the first question is: Yes

But I don't the answer to your second question. However, I would assume they would want their original loan. I going to find out though I'A.