The only “catch” is that there could be potential tax consequences that should be discussed with your tax professional. Other real estate agents may not be thrilled that Victors Realty can offer a rebate because of our reduced overhead expenses. However, even the National Association of Realtors in the October 2010 edition of REALTOR magazine (article by Bruce Aydt on page 16) acknowledges that there is nothing ethically wrong with offering freebies to clients. The article references applicable sections of the “Code of Ethics and Standards of Practice of the NATIONAL ASSOCIATION OF REALTORS” and comes to the conclusion that “Freebies are OK if Terms Are Clearly Disclosed.” The applicable Standard of Practice 12-3 states that “The offering of premiums, prizes, merchandise discounts or other inducements to list, sell, purchase, or lease is not, in itself, unethical even if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR  making the offer.”

When an independent owner / operator signs up for a franchise they are primarily buying into a marketing plan. In the case of something like McDonalds that plan comes with a commitment for uniformity. If you buy a Big Mac anywhere in the country you can be pretty sure of what you will get. Because of differences in real estate laws from state to state real estate franchises can’t provide the kind of uniformity that McDonalds can provide.  However, all real estate franchises in a particular state have to follow the laws of the state that they are in. Independent (non franchise) real estate brokers have to follow exactly the same state laws.  So what benefits arise from working with a franchise real estate office?  Well you get the privilege of contributing to the overhead of maintaining the franchise. A typical franchise arrangement might require that 6% of any commissions earned by that office go towards franchise fees.  The bulk of the fees collected then may be used to advertise the franchise brand itself.  So when you sign up with a franchise and you see their ad on television you can proudly say “Hey I helped pay for that ad. Did you like it?”

It is pretty much accepted that about 80% of the people looking for a house to buy use the internet to help identify a house. I would like to convince the remaining 20% of buyers why they should do the same. Buying a house is a huge investment for most people. Before you decide to buy a particular house you should be sure that you understand what equivalent houses are actually selling for. Information that used to be hard to get is now easily accessible. Search tools are available that can pull information directly from the MLS data base. The advantage of linking directly to the MLS data base is that the information you get will be as fresh as it can be. I want my clients to have as much information as I can possibly get to them.  As unbelievable as it may sound I’ve actually run across agents who give their clients information about the features of a home but initially withhold the exact address to make it difficult for the client to locate the home by themselves. If you know how to do your own searches you will quickly be able to tell if you are working with a knowledgeable agent. One last closing thought. Once you have identified a property you want to make an offer on ask you agent to put together a summary of equivalent houses that have recently sold. Your agent has easy access to that kind information and if an agent is not willing to provide it to you should really ask them why not. Having information on comparable sales will help you decide what a reasonable offer might be.

I’ve attended some seminars put on by the world’s most recognized real estate coaching organization. I believe it’s safe to say that at one point or another, the most successful real estate agents (read that as the highest earning) have been to one of these seminars. Some of the key points that stuck in my mind from those seminars, and I don’t necessarily agree with all of them, are that: 1) Buyers typically don’t pay any commission so they consider the real estate agent’s time free for the taking. Therefore working with Buyers takes up time that could be better spent signing up more Sellers. (I differ with this view and believe that Sellers and Buyers are equally important. You can’t have one without the other).  2) A property put on a MLS at a competitive price will sell.  It will sell even if it is not otherwise advertised and even if there are no open houses held. (I completely agree with this view) 3) A property put on a MLS at a price that is not competitive will not sell. It doesn’t matter how much it gets advertised or how many open houses are held. (I completely agree with this view also). Looking at historical data I’ve found that the agents who take the most seller listings find a buyer for their own listings at about the same percentage or maybe even a slightly lower percentage than the agents who take much fewer listings.  This could be because they are so focused on signing up sellers and not nearly as focused on working with buyers. Based on statistical data it appears that as long as a property is priced competitively it does not really matter who puts the property on the MLS (assuming that the person who enters the MLS info knows what they are doing).

It depends. If you are buying with the expectation of the kind of rapid price increases we saw in the past I don’t see that happening.  If you are buying a home that you would be satisfied living in for at least the next five years I would say buy now. Prices are low and interest rates are low. If you get a fixed rate loan with payments that you can afford I don’t see how you can go wrong (with the exception of someone losing their job). If you own any stocks you know that you don’t typically trade in and out of the stock every time it moves (unless maybe you are a day trader). It is possible that if you buy a house now the price could go down somewhat. Considering where we are now if it does go down it probably won’t be a huge amount. If you have the mindset that you are buying the house to have a place to live and that you can afford the house payments so what if it goes down by some nominal amount?  If you go into the deal now with a five year time horizon it is unlikely that you will regret the decision at the end of the five year period.

Yes, with one possible exception. The one exception applies if you are unlucky enough to be in an area that has lots of short sale and bank owned properties for sale. In such areas you have a tough decision to make. The glut of homes for sale is probably driving prices down in the short term. If you have the flexibility of waiting for a few years you might want to consider that. If you must sell in the near term the quicker you do it the better off you will probably be because the glut of homes for sale in your particular area may continue to drive prices down. If you are in an area that does not have a huge inventory of homes for sale you might as well sell now. I say that because if interest rates go up the price you can get for your home will most likely go down. I also don’t believe that overall home price increases for the next several years will significantly outpace inflation or salary increases. Considering the time value of money the present value of what you can get by waiting a few years probably won’t be that much different than what you can get now. (Google “present value” to find out more about what that term means).

Most people get the largest home loan they can qualify for. The loan amount that someone can qualify for depends on their income, their other debts, the interest rate, and the overall criteria used for loan qualification.  As we all know home prices increased dramatically in the period from 2004 to 2008. They increased because anyone could borrow pretty much any amount they wanted with very few questions being asked. Let’s assume that the current basis for loan qualification stays constant. Then the maximum amount that someone can borrow will depend on the interest rate and their verifiable income. The interest rate on home loans currently remains quite low. It probably won’t go down very much below where it has recently been. At some point we know it is going to go up. With everything else constant when interest rate goes up the amount you can borrow goes down. Over the longer term when interest rate goes up that usually indicates that the inflation rate is also going up. To keep up with inflation most people see an increase in their income. Higher income means the amount you can borrow goes up. In the near term I believe that prices will remain relatively flat. They could even go down if interest rates increase. Prices could also go down if unsold inventory goes up too quickly as banks release more foreclosed properties for sale. Over the long term I expect prices will go up slowly consistent with the increase in incomes but the home price increase will be nothing like what we’ve seen in the recent past.

In putting together the Victors Realty web site I’ve tried to include information that will help buyers and sellers understand some of the key pieces of the home buying /selling process. I did not try to implement any home search tools specific to Victors Realty directly into the www.victorsrealty.com  web site. Instead I’ve chosen to adopt the use of Listingbook (victors-realty.listingbook.com ) to provide my clients a way to access the most up to date information directly from the MLS. Please let me know of any thoughts you may have on ways that I can improve the web site. Thanks.