Explaining the Real Estate Broker Settlement

Under the terms of a settlement agreement between home buyers as represented in a class action lawsuit and four large real estate brokerages, standard rules of engagement will soon change somewhat between real estate brokers and their clients. 

The conventional wisdom described in most news stories – hoped by consumers and feared by the realtor business – is that commissions on residential real estate sales will drop from a traditional 6 percent paid entirely by the seller, to some lower negotiated rate paid separately by sellers and buyers.

Lower transaction fees, especially for something as central to household wealth as real estate, seems like a win for homeowners, possibly at the expense of the realtor business. If real estate brokerage fees have been kept artificially high by an unspoken cooperation by big brokerage firms to cluster fees in the 6 percent range – which is the assertion of the original plaintiffs in the lawsuit – then this ruling and settlement may land the average fee at a much lower range, like a 3 to 4 percent range.

Possibly no change

In conversations with real estate professionals, however, their belief overall is that this settlement will likely lead to very little observable changes, especially in Texas. On the other hand, the settlement may have unintended consequences that actually hurt consumers. Mandated changes will go in effect August 14 or later, so we’re still in speculation mode.

Far from lamenting upcoming changes to her industry from this settlement, realtor Carolyn Rhodes of Kuper Sotheby’s International Realty in San Antonio told me “this is the best thing that has happened to us in 10 years.” She explained her confidence stems from two points. First, the rules of the settlement will mandate written agreements for buyer-side representation, and it will restrict certain types of commission listings by seller’s agents which might have been used to enforce – again in an unwritten way – a 6 percent standard commission. But Rhodes says reforms in Texas in the 1990s and 2000s already mandated buyer-representation contracts, and also already made commissions explicitly negotiable. Far from putting downward pressure on commissions, her theory is that new rules will lead to better disclosure and dialogue about brokers’ fees, which helps her business rather than hurts it. 

Nicole Webb (my wife’s cousin)

Outside of Texas I heard the same thing from Nicole Webb of Realty Executives in Knoxville, TN. She doubts the settlement will have any negative impact on her business. For starters, she says she’s rarely listing a property for a full 6 percent commission (she actually said “never”) so does not think downward pressure on commissions will be any adjustment for her. Next, she’s confident that she talks to clients upfront about how commissions work, what costs they cover in terms of marketing and advertising. And finally, like Texas-based brokers, she would always have had in place a written agreement with clear rules of engagement as a buyers’ broker. (Disclosure: Webb is my wife’s first cousin, once removed). 

Another real estate broker friend I spoke with who asked to remain anonymous expected very little change in her business. As a well-established broker who relies primarily on relationships and deep knowledge of her coverage area, she felt confident that future commissions would reflect value-added work in line with past commissions. Many of those were already negotiated away from the “standard” 6 percent anyway, based on the size or complexity of the transaction. 

The details of the settlement

Regarding the details of the settlements over the past few months, large brokerage firms Keller Williams, Anywhere, RE/MAX, and HomeServices of America were all sued by a group of home sellers. Anywhere and RE/MAX settled before trial, paying $83.5 mm and $55mm respectively.

A jury then ruled against the industry, and a judge ordered the National Association of REALTORs (NAR), Keller Williams, and HomeServices of America to pay damages of $1.8 billion. NAR agreed to pay $418 million, and Keller Williams settled for $70 million. In April 2024 HomeServices of America, owned by Warren Buffett’s Berkshire Hathaway, finally settled for $250 million. 

The NAR settlement

A central feature of the settlement is that when agents list property on the Multiple Listing Service (MLS) database of properties for sale, they’re now much more restricted in how they communicate on this listing about commissions. They can’t require a cooperative relationship between seller and buyer when it comes to commissions. They can’t filter listings by compensation. The intent is to make it more likely that seller’s agents and buyer’s agents are totally separately compensated, and they negotiate their own compensation separately with their own clients. 

Risks for homebuyers

One possible unintended consequence of this settlement, commented on by a few brokers I spoke with, was the risk that some consumers may actually be harmed by the settlement. 

That’s the speculative worry of J Kuper, president of Kuper Sotheby’s. In particular, homebuyers expected to pay for their own buyer’s representative face a problem. Under current rules that pre-dated this settlement, banks who offer mortgages at a real estate closing may not include buyer’s commissions in their loans. The result? Buyers may have to pay the 1 to 3 percent commission at closing, on top of the already-difficult-to-save-for down payment. If banks do not adjust their rules on mortgages in coming months, this could leave home buyers scrambling for extra cash at closing, or incentivize them to forgo representation. Neither is an outcome that will serve home buyers interests well.

J. Kuper of Kuper Sothebys

Steve Yndo has been a long time broker for King William Realty and currently is a developer and commercial broker at Yndo Urban in San Antonio. 

Although his bread-and-butter is not residential real estate, he also foresees complications from the settlement and new rules.

As Yndo says, “The biggest pitfall, the biggest problem might be that if the prevailing deal becomes ‘Hey sellers, you’re now expected to only pay for the seller rep’ and they’re only going to pay those guys half the current prevailing fee, then buyers are kind of on their own.

In concrete financial terms, what Yndo describes goes like this: A first-time home buyer diligently gathers her $60 thousand down payment for her $300,000 dream home. Or $30 thousand down-payment for a 10 percent, or whatever. And the new rule may require her to come up with an additional $6K to $9K at closing to compensate her buyer-side broker. 

So as Yndo speculates: “What first-time buyer is able to pay that fee, unless the practice also becomes that the fee just gets rolled into the deal and as part of the mortgage? Which is more or less how it has always worked. If that doesn’t come about…[Buyers] may go unrepresented, trying to do it on their own.” Since that buyer’s fee isn’t financeable under current rules, there may be a problem in the future. 

J. Kuper’s strong belief is that real estate markets depend more than anything on stability and clarity. The uncertainty around adjusting to the new settlement is what could slow down transactions, not the substance of the settlement itself, which he finds, like his colleague Rhodes, not particularly worrisome. 

In May 2024 not all the details are yet known. A final agreement on new rules of engagement are still being worked out, and will not take effect for real estate transactions until August 17 2024 at the earliest or the months after, adding to uncertainty for real estate industry professionals.

A version of this ran in the San Antonio Express News and Houston Chronicle

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Video: Buying Your Dream Home

Part of the series of 10 personal finance videos I made with public television station KLRN – This one focuses on home buying.

There’s the same content, but in podcast form if you prefer…

And, of course, if you like text, we’ve got that too.

Linked to here on the KLRN site.

Please see related posts:

The Rent vs. Buy Debate, resolved

On Home-ownership Part I

Home-ownership Part II

Home-ownership Part III

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Book Review: Automatic Millionaire Homeowner

How important is homeownership to building wealth in the United States? I’d put it on a list of the top five most important things people should do.

Off the top of my head the other four are probably

  1. Stay out of high-interest debt
  2. Automate your savings and investments
  3. Invest in risky, not safe, things
  4. Invest for the long term, greater than 5 years.

As a top five action, why and how is homeownership important? And can it go wrong? Oh yes, it can go wrong. It’s been less than a decade since homeownership went terribly, horribly wrong for many, so even while I want to extol ownership, it’s worth reviewing painful lessons too.

In 2014, the last time the Federal Reserve published their Survey of Consumer Finances, reporting median homeowners’ net worth of $195 thousand compared to renters $5 thousand net worth. Homeowners have nearly 40 times as much net worth as renters.

Of course you scientists will point out that correlation does not imply causation, and also that causation goes both ways. People own a house because they have wealth, AND people have wealth because they own a house. Even so, the mechanism by which home ownership builds wealth matters.

Homeownership works to build wealth because of automation, tax advantages, and leverage.

By automation, I really mean to highlight the way in which paying a mortgage over 30 (or even better, 15) years steadily builds, month after month, year after year, your ownership in a valuable asset, and in a way that matches your monthly budget. Your monthly mortgage payment is a combination of interest and principal, and every bit of principal you pay adds a steady drip into your bucket of positive net worth. Sleep like Rip Van Winkle and then wake up 30 (or even better, 15) years later and boom! You own a valuable asset free and clear of debt.

By taxation, I really don’t want to highlight the mortgage interest tax deduction that everyone seems to know about already, and that quite frankly I’d be happy to see disappear.

Instead, the tax-reducing key to wealth building through a lifetime of home ownership is the capital gains tax exclusion of $250 thousand, or $500 thousand for a married couple. Home ownership doesn’t work like other investments. It works better. If you buy a house for $200,000, and then manage to net $450,000 when you sell it many years later, you have a $250,000 capital gain. Normally, Uncle Sam takes a cut of a wealth-gain like that, like 20 percent, or $50 thousand. But as long as certain conditions are met – you lived there 2 out of the last 5 years – then that entire $250 thousand gain is yours to keep, tax free.

In the bad old days – before 1997 – Congress only let you do this tax trick once in a lifetime. Since then, however, you can do it over and over as much as you like. Now doesn’t that make you love Congress more? Congress is WAY better than cockroaches, traffic jams, and Nickelback, even if it consistently polls worse.

By leverage, I mean that middle class people can’t normally borrow four times their money to buy a valuable asset. If you experience home inflation, that borrowing juices your return on investment in an extraordinary way.

Please forgive the oversimplified math I’ll use as an illustration of leverage: If you invest $50 thousand as a down payment and borrow $200 thousand for a home, and then the home goes up in value by 10 percent, what’s the immediate return on your investment? Hint: The answer isn’t 10%.

If you managed to sell your house with a 10% gain in value, you’d clear $75 thousand after repaying your loan. If you invest $50 thousand in a thing and net $25 thousand on that thing, you have a 50% return on investment. That’s the power of leverage.

When you combine automation, tax advantage, and leverage, you have a powerful wealth-building cocktail from home ownership.

Ready for the cold water to spoil your mojito? Home ownership as an investment can also go terribly wrong.

I was thinking of this recently because I checked a personal finance book out the library that has aged very badly, David Bach’s The Automatic Millionaire Homeowner.

Published in 2005, a few years before the 2008 Crisis, Bach’s book is a combination of good advice, like I reviewed above, and terrible advice.

Bach urges people with weak credit scores to check with their banks about alternative mortgages specifically tailored to them. Bach also describes in detail the opportunities for prospective homeowners to purchase with just 5 percent or 10 percent down, or even “no money down,” rather than seek the conventional 20 percent down-payment mortgage. Bach describes without apology the idea that your house could increase in value by 6 percent per year, every year for 30 years, turning your $200,000 starter home into something worth $1.1 million. In fact much of the book reads, in retrospect, like an excited exhortation to flip one’s way from a starter home to a millionaire mansion through risky mortgages, low money down, and price appreciation as far as the eye can see. Needless to say, that isn’t the way to do it.

I’m not saying low down payments, or buying with weak credit will always go wrong and should be forbidden. I’m just saying that, given what we experienced a few years later, we know it will lead to tears for many. And I’m not saying your house won’t appreciate, I’m just saying that a more normal annual price increase like 2 percent – in line with inflation – is a much better bet.

millionaire_homeowner

Good personal finance books are evergreen, and that one isn’t. If you want a good one however, may I suggest Bach’s excellently readable and important The Automatic Millionaire, in which he extols the concept of automating savings and investments, a key for most middle-class people to build wealth over a lifetime.

 

 

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A Road Runs Through It

I had a weird thing happen to me recently that prompted thoughts on real estate investing, “eminent domain,” and BIG GUBMINT.

I (re-)learned that what you don’t know might hurt you, and also what you think you know about your constitutional rights might not be true.

Through a series of unfortunate events, I became a one-fifth owner in a parcel of agricultural land in Southeast Bexar County, Texas.[1] I’ve been trying to sell it ever since. I have areas of investment expertise, but real estate development isn’t one of them. Which is probably why I found myself in this awkward spot.

Major Thoroughfares

Last fall I learned from our realtor that a 50-acre parcel of which I am a part-owner has a planned “Major Thoroughfare” running through the middle of it.

My realtor sent me the city parcel map and yup, there’s a bright yellow line cutting right through our property. As owners we can’t build on that. Any development done on the property has to make way for a future, theoretical, 120-foot wide road right down the middle.

major_thoroughfare
A Road Runs Through It

Art Reinhardt, Assistant Director in the Transportation Department for the city of San Antonio explained to me that in 1978 – and then periodically updated afterwards – the City of San Antonio mapped out future theoretical roads, to account for growth.

The long-planned major thoroughfare is not built yet, and might not be built for decades, or even built at all, ever. But in the meantime, we can’t use that land for anything except a road.

All-in, the as yet non-existent “major thoroughfare” will take about five acres out of the parcel and make it unavailable for building. Multiply those five acres times the cost per acre, and we’re talking about real money lost by myself and my fellow owners.

At first, I thought the carved-out five acres would be no big deal. Because, well, I’m an American. And I was flipping through my copy of the US Constitution, as one does in one’s free time, and I re-read Article V of the Bill of Rights: “Nor shall any person…be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

This amendment is the basis for limitations on any government – city, state or federal – claiming “eminent domain” over private property, taking it for public use without paying the private property owner for that taking.

So no problem, I thought, the City of San Antonio will certainly pay us for that public use, right? I mean, I read it right there in the Fifth Amendment of the US Constitution. So, cool, I’m good.

That’s when I called city officials to test my theory.

Nope. There will be no compensation. I checked with multiple city officials familiar with this type of matter in the Planning, Transportation, and Office of Legal Counsel.

I further learned that even if an un-built but planned major thoroughfare exists, it will not show up in a title search, the typical due diligence step real estate purchasers use to be certain they have full to ownership with no liens or counter-claims from anyone, like an unpaid creditor or previous owner.

It seems the only practical way a buyer would know about this is through hiring a specialist attorney familiar with maps showing city plans for major thoroughfares. Something we clearly hadn’t done.

I talked to San Antonio attorney David Denton, a specialist in eminent domain and governmental real estate issues. He helped walk me through the legal particulars that would define an “eminent domain” case versus a “tough luck, private property owner” case.

Cities and other government entities obviously have rights and the need to restrict private usage through zoning, parcel platting, infrastructure requirements, and transportation. These may be considered ‘exactions’ imposed by a city government.

In legaleze, getting paid for eminent domain reasons hinges on whether there’s an ‘exaction’ (no compensation for the private land-owner) or a ‘taking’ (possible compensation for the private landowner.) Exactions provide government cover for a variety of legitimate uses, including it seems, future theoretical road access on this property. Denton also mentioned case law around the “proportionality” of the government’s requirements. I understand that to mean that if a higher proportion of a full property value was lost, it might start to resemble a ‘taking,’ but my situation didn’t rise to that level.

Lessons

One lesson, obviously, is don’t get into investing in things without really knowing what you’re doing. In other words, do as I say, not as I do.

Another lesson, more subtly, is that the world of real estate is not as simple as a bright line between private property rights and public or government property rights. We rarely can do precisely what we want with private land, and the public interest can impinge upon our theoretical property rights.

krispy_kreme
Please bring one of these to my rural land

The third lesson I learned along the way is that BIG GUBMINT can be serendipitously profitable. It turns out there’s private silver lining opportunity in this public impingement. As a developer buddy of mine explained, some investors seek out land like this, with a major thoroughfare plan running through it.

Here’s why. If the major thoroughfare did get built soon, I’d be sitting on a potential gold-mine (a very small-scale gold-mine, but still). Suddenly my rural land would become far more valuable from the expected increase in automobile traffic. I could lease it out to a Krispy Kreme or whatever fast food joint would build a store next to the major roadway cutting through the property.

Actually, who am I kidding? If we could lease to Krispy Kreme specifically, I would move into a trailer next door and never leave. I love that sugary goodness.

 

 

[1] I wrote once about my star-crossed real estate investment a while back, as it gave me insight into the “Agricultural Exemption” game that developers play, in which they run a cow over their land once a year at tax inspection time and the county collects only a tiny fraction of the land’s market value.

 

A version of this post ran in the San Antonio Express News and Houston Chronicle.

 

Please see related posts:

A real estate rant about “agricultural” exemptions

 

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Tax Liens In My Life

tax_liensSince I like to write about finance, all of real life is merely raw material for finance lessons, so I beg your pardon while I talk about tax liens in my life.

A while back  I described my astonishment at how low property taxes were for ‘agricultural exemption’ property that I happened to be eyeing for investment purposes. Long story short, I ended up buying a one-fifth interest in raw land in a rural part of the County where I live (Bexar County, TX) agricultural exemption included.

My property investment

I mention my property investment to illustrate the role of tax liens. Bear with me for a bit as I explain a sort of complicated situation.

I only bought one fifth of the property, while the other four-fifths remain owned by four siblings (not mine) who inherited the property. While the family dynamic is opaque to me (they were strangers to me before my investment), I understand that some siblings have sufficient money and some don’t, and some siblings care to pay attention to details like property taxes, and some don’t. Meanwhile, taxes on the parcel of land have gone unpaid for a few years.

This makes me extremely nervous for my investment.

Fail to pay property taxes, and you eventually run the risk of losing your property to the foreclosure power of the taxing authority, typically a city or town. Needless to say, I don’t want to lose this property, and if we leave taxes unpaid for too long, eventually Bexar County will take the land.

Tax lien lenders

Now, you may or may not have ever heard of ‘tax lien’ lenders and investors, so if not, let me be the first to illuminate for you a fascinating little section of the real estate finance world.

Ever since I registered my name on the property deed as partial owner last Spring, I have been inundated with solicitations from tax lien lenders. My name – along with the siblings – shows up publically as owners of a parcel with delinquent taxes owed. Hence, the solicitations.

The tax lien lenders offer to pay our property taxes now owed on the property. Meanwhile, if we did the deal, the lenders would use the real estate as collateral for the loan in the event I (and the sibling heirs) fail to pay back the loan in the future. Tax lien buyers (or in Texas, tax lien lenders) have the power to act like the municipality, and eventually take over the property for themselves in the event of non-payment.

In my complicated situation, with some of us owners unable to pay the taxes or possibly unwilling to put up money for the others for an indefinite amount of time, these lenders make some sense.

Partly I mention this whole anecdote because tax lien investing/lending is an obscure but important part of real estate and municipal finance.

Partly I mention this because tax lien investing may inspire a natural aversion. On the face of it, any lender who has the power to take away your property seems, I don’t know, scary? I mean, regular bankers seem unlikable enough. From a PR standpoint, however, the specific combined function of ‘tax collector’ and ‘money lender’ has an even tougher time getting a fair hearing. Those labels have served for thousands of years as biblical shorthand for enemies of the common people.

Personally, I have no problem with the solicitations to pay my taxes in exchange for an eight to twelve percent loan. We might need that solution.

The ironic thing here is that – in my old investing life – I was on the other side of this situation.

My tax-lien buying

I discovered tax lien investing in 2005 after buying a book called The 16 Percent Solution, in which the author explained a high-return and low-risk path to wealth through tax lien investing. Through my investment company I first started purchasing liens in New Jersey and New York, eventually branching out into Connecticut, Vermont, Rhode Island and even Mississippi.

Incidentally, I was a very unwelcome (meaning: Yankee) participant in my one Mississippi tax lien auction. I’m just happy to have gotten out of there in one piece. Bless your hearts, people of Wilkinson, Mississippi!

Tax lien investing and lending happens around the country, with state and local variations adding to the complexity. On the positive side, the interest rates earned seem very attractive, while the risk seems low. On the negative side – as I learned over the course of a few years of tax lien investing – it’s quite easy to lose money through tax lien investing as well.

As I purchased liens, I sometimes wondered about the complex situations that led people to become delinquent on their real estate taxes. Now I’m in one of these complex situations, and I sort of get it.

My situation

I don’t know when we will all be able to agree on paying the taxes. It may be a better idea to borrow the tax money – even if we have to pay eight to twelve percent on the loan – than to risk losing the property outright to the county via foreclosure. A loan may give us enough time to figure out an eventual solution – either by paying the taxes or selling the property.

 

A version of this ran in the San Antonio Express News.

See related post:

 

Real Estate Tax Rant – Agricultural exemptions

 

 

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Rent vs. Buy – The Simplest Answer

white_picket_fence
Just add 2.3 children and a Viking stove and you’ve got the American Dream!

The “Rent v. Buy” discussion offers endless opportunities for debate.

We can talk about the opportunity to buy a piece of the mythical ‘American Dream’ – on the path to acquiring key accessories like a white picket fence, 2.3 children, and a Viking stove.

We can talk about the extraordinary risks taken by mortgage borrowers borrowing to the maximum before 2008 and the devastating financial losses many suffered in the aftermath of that financial crisis.

We can talk about the pride of fixing up one’s own dwelling as an owner. Or just as easily, we can note the smug satisfaction of calling Bob the superintendent and ordering it done. Make it quick, Bob!

Some of these preferences derive from personal leisure time preferences, risk tolerance, or lingering Leave It To Beaver fantasies. I don’t have any comment on those factors.

leave_it_to_beaver
Are Leave It To Beaver fantasies leading you to home ownership?

I do have comments, however, on the financial implications of the Rent v. Buy debate.

Online calculators

You can find delightful Rent v Buy calculators online.

I prefer The New York Times’ calculator myself, but there are other great ones on various realtor’s sites as well as brokerage sites. Another site, BankRate.com walks you through a series of qualitative questions to determine suitability for home ownership versus renting. These are all fine and cool.

I do not recommend spending too much time with any of these online models, however, because ultimately the financial models depend on inputting assumptions about a bunch of unknowable future financial factors. Do you know what your income taxes and real estate taxes will look like five years into the future? Do you know the future rate of inflation, the rate of increase in rent, the insurance and repair costs of a home? I mean, if you had certainty and accurate insight into these things you’d be running a high frequency trading fund by now, not fiddling around with online rent v. buy calculators.

I’m in the ‘making things simple’ business, and I believe you only need to satisfy two conditions to make the move from rent to buy.

First thing: Do you have a steady, predictable income? If you do not, then home ownership is a terrible idea. It’s just too risky.

Second thing: Do you plan to stay in the same place for the next five years? If not, real estate values are too volatile to mess with, and the frictional costs of getting in and out of real estate ownership are too high – after factoring in brokerage, title, loan, and attorneys fees.

So that’s it: If you’ve got a steady income and plan to stay five years in the same place, then go for it.

Wait, I haven’t said this strongly enough.

Commodities Trader says Buy
Commodities Guy says: BUY! BUY! BUY!

Picture me for a moment like those commodity trading pits guys (who don’t really exist anymore) a phone in each ear and tie askew, hands gesticulating wildly and shouting “Buy! Buy! Buy!” into both phones simultaneously. That’s how strongly I feel about the financial advantages of home ownership, if you can satisfy my two conditions above.

In order of importance, here’s why home ownership offers powerful financial advantages.

Automatic Savings

I can’t prove this, but I’m convinced this is the most important financial reason to buy a home. Most of us have no extra money month-to-month, so the idea of putting money away for long–term investments is, let’s say, elusive. But when we own our home with a mortgage, we end up paying small chunks of principal in the ordinary course of paying for our shelter. Over 30 years many middle-class homeowners manage to sock away hundreds of thousands of dollars of wealth without much pain because it happens monthly, automatically, even sneakily.

Tax Advantages

Everybody talks about the mortgage interest tax deduction, which is fine, but not the most important tax advantage of home ownership. The most important tax advantage – by far – is that in most scenarios when you eventually sell your home, $250,000 of capital gains are tax free, or $500,000 for a married couple. No other financial asset offers that kind of tax-free growth in value. Not only that, but real estate taxes are deductible from federal income taxes, as are other mortgage expenses like ‘points.’ Home ownership is just a great big bundle of tax advantages, courtesy of your middle-class homeownership-pandering Congress. Thank you US Congress! We love you! Muah!

Inflation hedge

Hey gold bugs, you’ve got the wrong idea. Home ownership is an awesome inflation hedge, because you can reasonably expect the price of your home to go up in line with inflation. When you rent, inflation hurts. When you own, inflation helps. If you own a home, especially with a mortgage, you can be all, like, ”Inflation? Bring it on! I am hedged!”

gold_as_an_inflation_hedge
Not an inflation hedge I endorse. But home ownership, yes!

Leverage

That’s finance-speak for buying more than you can actually afford, through borrowing. Of course being debt-free is a great idea that everyone should aspire to, but the leverage part of home ownership has long been a key part of middle-class wealth-building.

Outside of mortgages, lenders will never offer you 4-to-1 leverage, meaning the chance to buy a financial asset by only putting 20% upfront and paying off debt over time.

How does leverage work?

If you put down just 20% of the value of a thing, and then the thing goes up in value by 10%, with 4-to-1 leverage the value of your ownership in that thing increases by 50%. This is amazing! Obviously leverage (aka debt) is a double-edged sword and can lead to catastrophic losses if your thing goes down in value by 10% (or more!) But still. Leverage!

rent-v-buySmall print disclaimer before my summary conclusion: I have not mentioned the issue of down payment (you need it!) and decent credit (you need it!) when deciding on Rent v. Buy. So there’s that to consider as well. But for now let’s focus on the simple message below.

The four factors above make ownership awesome. If you have a steady income and five years in the same place, BUY!

 

Please see related posts:

Housing Part I – What we do when we own a home

Housing Part II – The Risks

Housing Part III – Big Opportunities

Please see related video on Rent v. Buy

 

 

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