The best home buying rule I can offer you is my 30/30/3 home-buying rule. If you follow my home buying rule, you will have a greater chance of surviving any financial downturn. Even if you just follow one part of the rule, you will also be able to enjoy your property more because you will be less stressed about your finances.

Way too many homebuyers overextended themselves during the 2008-2009 financial crisis. As a result, most of us paid the price. Having your neighbor conduct a short sale or foreclosure isn’t good for your wealth even if you borrowed well within your means.

There is a lot of demand for real estate during the pandemic. You can get a 30-year fixed-rate mortgage for under 3%. The stock market is volatile. Finally, we’re all spending way more time at home.

It is only logical that interest in real estate has increased. However, this is all the more reason to stay disciplined.

Just look at this national home price appreciation chart during a pandemic. It is accelerating!

For those of you buying a home during a period of maximum uncertainty, please follow my 30/30/3 home-buying rule. Not only will the rule save you from a lot of stress, but it will also better protect our economy.

Your net worth might be much higher and you don’t even know it. This is a realization I came to after receiving some feedback from a reader.

In the post, To Pocket List Or List On MLS, I wanted to help home sellers who value privacy to get the best price possible for their homes.

It is now a national pastime to go online and view homes for sale on Zillow and Redfin. It’s like escapism for the millions who are trapped in their dungeons.

However, if you are a Stealth Wealth practitioner, the last thing you want is everybody to know the details of one of your largest assets.

As a result, I’m a proponent of pocket listing first, and then, if necessary going on MLS. By going the pocket list route, you also get to test out the market without growing your Days on Market count. The higher the DOM count, the more your property will take a price hit.

Although the National Association Of Realtors has banned pocket listing for its member agents for now, you can still do a pocket listing by privately sharing the listing within your agent’s real estate brokerage house. The larger the real estate brokerage, the more agents and potential buyers will see your listing.

After sharing my experience with both pocket listing and the MLS, I got shot down by a realtor named Igor. He said I was wrong to pocket list. He also said I was wrong to recommend people try pocket listing first.

It’s good to disagree so most people considering the two options can come to a better decision for themselves.

Given I did sell via a pocket listing, Igor implied that I left hundreds of thousands of dollars on the table. $655,000 to be exact! Ouch. Let’s explore what happened and see if we can learn some lessons if you plan to sell your house today. I’ll also discuss some general life lessons as well.

This post will teach you how to choose the right Realtor to help sell your home for top dollar. You’ll also learn how to choose the right Realtor to help you buy a home and get the best deal.

Despite the pandemic, the real estate market is very strong right now due to record-low mortgage rates and more time spent at home. Perhaps you are thinking of buying too or selling into strength.

For the right price, everything is for sale. So when my real estate agent friend pitched to put my home on the market in the summer of 2012 given the lack of inventory, low interest rates, pent-up demand and Facebook going public, I figured why not test things out.

I had a single family home that is suitable for a young internet couple looking to start a family. I told my Realtor that if I don’t get X amount, then I’m not selling. He agreed to the terms.

My asking price of $1,700,000 was $100,000 over estimated market value, but he still thought a sale was possible. Given he was the one who was going to do all the staging, marketing, photographing, and showing, the burden was on him. For me, I was just going to tidy the house and get out of the way during showings.

It felt good not having to sell if I didn’t get your aspirational price. It’s kind of like going to a bar with your buddies and having no fear talking to the most attractive person there because you already have the most beautiful wife already. Or it’s kind of like getting a free roll at the casino.

My biggest goal is to gain enough insight to write this post! I want to teach people how to choose the right Realtor because mine was terrible.

The best way to sell a house is either via the Multiple Listing Service (MLS) or through a pocket listing. I wouldn’t go the self-listing route, unless you are a licensed real estate agent, a real estate attorney, or already have a buyer lined up. There’s too much at stake, especially now.

In normal times, the MLS is the regular way most people sell their homes. But we are certainly not living in normal times. Therefore, it may be wise for sellers to consider selling through a pocket listing first.

A pocket listing is a type of real estate listing that is retained by a listing broker and not made public on the multiple listing service.

The listing broker will privately market the listing to his or her network of other brokers and potential buyers.

Pocket Listing Headwinds

A pocket listing was common place until on November 11, 2019, the National Association of Realtors (NAR) board of directors voted 729-70 to ban the practice of pocket listings, also known as private listings.

As of May 1, 2020, pocket listings are no longer allowed if you are an agent who belongs to the NAR. This banning of pocket listings is absurd. The NAR does not have the right to regulate sellers – just agents who belong to the association. Out of the roughly two million licensed agents in the U.S., about 70% are Realtors who belong to NAR.

According to the NAR, if you want to sell a property, you must “within one business day of marketing a property to the public, submit the listing to the MLS for cooperation with other MLS participants.” Talk about wanting monopoly-control! Maybe the NAR will start telling us how we should remodel our homes too.

The MLS is the largest public database of properties for sale in America. Once your home is on the MLS, the whole world can see what you’re up to. Good luck to the NAR for trying to enforce people to not privately try and test the waters first with their own property.

Like many industries, the real estate industry is hurting. Volume is down due to shelter-in-place and the desire for sellers to hold onto a stable asset in an uncertain world.

To help with volume, the NAR board could vote to allow pocket listings again and decrease commissions. Doing these two things should help boost business. But old ways die hard. As a result, even less realtors will probably get paid.

In a previous post, I estimated how real estate performs at various levels of a stock market decline. In my opinion, the sweet spot for real estate outperformance is somewhere between a 15% – 25% stock market decline. This post highlights real estate outperformance examples during the pandemic.

During such a level of decline, mortgage rates tend to fall as investors buy Treasury bonds for safety. As a result, real estate demand increases because affordability increases. Further, during a stock market correction, money tends to flow out of the stock market and into real estate and other more defensive asset classes like bonds.

Once the stock market declines by ~30 – 35%, real estate price appreciation tends to stall as potential buyers rethink their decision to buy any asset, including real estate. After a ~35% decline in the stock market, real estate prices are most likely falling as people fear losing their jobs.

No Open Houses Are Tough

We know that forced lockdowns have hurt the real estate brokerage business as potential buyers aren’t able to visit open houses and transaction volume declines as inventory gets pulled out of the market. However, please don’t confuse the real estate brokerage business with real estate prices.

When the real estate market eventually opens up again, sellers should negotiate for a commission discount while buyers should ask for a commission rebate. The coronavirus pandemic might finally be the catalyst to permanently lower commissions. However, I do think a great listing agent is incredibly valuable for getting too dollar.

In this article, I want to present to you an example of how one property performed during a global pandemic and a lockdown. It’s an interesting example given the final sales price and timeline of the sale. I’ll then share several more real estate outperformance examples, including one that closed more than two months into a lockdown.

While use of real estate lawyer is mandatory in some states, in most states it is optional. I’ve bought four properties and sold one property. For all the transactions, I have never once used a real estate lawyer because California law says using one is not required.

However, even if you live in a state that doesn’t require a real estate lawyer, you may want to consider paying for one.

Let me share several examples with you why getting a real estate lawyer may be a good idea. A real estate lawyer could save you from a lot of pain and suffering, as well as from financial loss.