How raising the minimum wage threatens home ownership…

There has been at lot of talk over recent months and years about states raising the minimum wage.  On the surface…folks think it is a great thing…but this a conversation on why it may not be all that it is cracked up to be.

Every state has different minimum wage.  Locally…the minimum wage is $7.25 an hour (which is the Federal minimum).  Several states have discussed raising whatever their state’s wage is to give or take $15.00 a hour.  And as I mentioned earlier…the average Joe thinks…great…that is double what I make now.  But let’s explore what happens when a wage change occurs.

Generally speaking…anyone getting paid less than $15.00 will now get an increase in wage.  So in turn…businesses will need to raise rates, product costs, and labor charges to compensate.  So for example, that gallon of milk that local you pay $2.80 a gallon for…will now cost you say $4 or $5 (as a guess).  Prices of everything will go up very quickly after the wage goes up.

Employees already $15.00 an hour or above will not likely great an equal rate increase.  If say an employee makes $17.50…and another employee makes $11 an hour.  The $11 employee will go up to $15.00.  But the $17.50 will likely stay at $17.50.  May not sound fair, but that is likely what would happen.  It actually happened to me in my younger days when the minimum wage was $4.25 and it went up in the 1990’s.  I was making more than the minimum wage…my co-workers all got a raise and I did not.  Which is the common practice…mainly because the employer can’t afford to do it.

But here is where is will hurt home ownership, that which the Realtor prides themselves in helping accomplish.  Employees at entry level jobs (at $7.25 or slightly more) will find themselves unemployed.  From the teenager just starting out, to the less skilled worker, to folks trying to start over.  Fast food employees, retail clerks, wait staff, dishwashers, mail room clerks, the list goes on and on.  Self employed individuals will also struggle.  They will not be able to double their costs just because the cost of living has gone up.  They will increase their rate some…but their customers (who may also be struggling due to the increase of the cost of living) will not be able to or willing to pay a higher rate.

This will also in turn put a higher need to be qualified and educated in order to be employed.  But due to the higher cost of living…college tuition will also go up, and parents and young adults may find it even harder to afford a college education.  Thus, putting our society in a lose/lose, rock in a hard place situation.

It is all of these reasons that a wage increase will affect home ownership.  Less individuals will be employed in general and unemployment will increase.  There will more renting and less buying.  Even if we balance out in a few years and adjust…we as a country will be in the same general place we are now.  The employee may make more an hour, but since they are paying more for products and services…will be taking home or saving about the same as they are now.  So what then??? Raise minimum wage again?  $20 an hour?  $25 an hour?  Where does it stop.  In that instance…in theory only…you could reduce the minimum wage and accomplish the same thing.  Cost of living would go down and individuals would still have the same take home or savings.

There is no way to predict the future or the impact.  And with neighboring states already raising the wage…a state is almost forced to match the increase to not lose residents and employees to nearby states.  So this is not a message suggesting that a stop in wage increase is likely…but more of an understand and opinion of how it could have a negative impact on individuals as a whole and ultimately the housing market.

Thanks for reading.

Bob Faith
Dockside Properties
757-894-1479
http://www.chincoteaguehomes.net

 

Advertisements

Bob Faith is the #1 Volume Sales Agent on Virginia’s Eastern Shore for 2018.

I am very humbled to report that I have been announced as the number 1 agent in volume sales for all of Virginia’s Eastern Shore. This includes all agents participating in the Eastern Shore Assoc. of Realtors MLS.  Dockside Properties in turn was the top Volume firm.

Number one in volume means I closed more deals and assisted the highest number of clients, more than another other agent on Virginia’s Eastern Shore.  It shows the amount of respect and trust my buyers and sellers have in my experience and expertise.  And I appreciate each and every one of my past, current, and future clients and their business.

This does not include our going business and activity on Maryland’s Eastern Shore…which doubled from 2017 to 2018…and is already had a great start in 2019.

If you are interested in selling or buying a home on Virginia’s (or Maryland’s) Eastern Shore…give me a call.  It does not matter if your home is worth $50,000 or $500,000.  Or if your buying an affordable campground lot or waterfront home with all the bells a whistles.  I will provide you with fair & honest representation…and will provide results in competitive market.

I can be reached at 757-894-1479 or robertmfaith@outlook.com .

Online at http://www.chincoteaguehomes.net

Common Contract Questions – Part 4

In the final part of Common Contract Questions…I wanted to move from the purchase agreements to the Listing Contract and Buyer Representative Contract.  This is the document a seller or buyer signs with their Realtor to create a relationship.  A listing contract is used when you are putting your property on the market.  And the Buyer Representative is used when you are hiring a Realtor to work with you as a buyer to look at homes.

In both cases there is a start and ending date.  These forms are used to create a relationship.  The Realtor is committing to work with you and look out for your best interests.  In turn, the buyer or seller is also committing to work with that Realtor for the duration of the time in the agreement.

So the important thing to know that this too is binding…just like a purchase contract.  All parties need to honor the agreement.  For example, if a Realtor lists you home for say six months…you can not sell your home on your own or with another real estate agent during that time period.  If you sell your home independently or with another agent…you still may be required to pay a commission due to the agreement.  So in cases of when you have tried to sell your home without your Realtor…you have cut off your strongest ally and advocate…and will still end up paying for those services – or – in cases of using a second Realtor…you may end up paying double the commission since you ultimately agreed to work with two Realtors.

With that said…if you can document that the firm involved is not properly looking out for your best interests (such as not advertising as agreed upon or not properly presenting offers), then you would have grounds to terminate the agreement.  The property not selling halfway through the agreement is NOT a valid reason for terminating the agreement.

The same can be said about the Buyer Representative agreement.  If you agree to have a Realtor help you find a home…you can not just decide to use a different Realtor without the agreement expiring or you terminating the agreement for just cause.

And it is a two way street.  A firm needs to honor the agreement, and can also terminate with just cause.  Say if the seller is chronically not allowing the home to be shown or the grass is always 6 foot tall.  The firm could terminate since the home is not “showable”.  Discuss what a Realtor needs you to do to keep your property “show ready”.

In all four parts of this blog series…the message to understand is that all contracts are binding.  They should be understood and respected.  Your Realtor is your biggest advocate.  They want you to succeed in your goals.  Communicating and discussing your concerns is the best way to have a successful transaction.

Thanks for reading…

Bob Faith – Dockside Properties
757-894-1479 – http://www.chincoteaguehomes.net

***This information is for general use only.  It is not meant to replace the advice of a Realtor or attorney specifically involved in a certain transaction.

Common Contract Questions – Part 3

In part three of Common Contract Questions…I want to discuss the settlement date.  Contracts from state to state are different.  But here are some basic tips.

The date written in for settlement in a purchase contract is almost NEVER the date the settlement will actually occur.  In most states, the attorney or settlement company is in charge of the settlement date and they will schedule it with the party or parties involved.  There is no need for both parties to be present at the same time…or even at all.  The seller can do their settlement at one time and the buyer at another time.  Or one or both parties may choose to do the settlement electronically or by mail.

A closing by mail (or any other means when a buyer or seller is not present) is more common for land settlements, settlements involving an estate, or other simple transactions.

Different states have different wordings in their contracts.  Dockside Properties is licensed in Maryland and Virginia…so lets use those states as an example.  The Maryland contract has wording that say that the settlement will occur “on or before” the date filled in.  This means that if the settlement is not going to occur before that date…an extension is needed to keep things moving along smoothly.  In Virginia, it is very different.  In Virginia, the contract reads “on or about” the date filled in.  That gives the parties involved a certain flexibility to schedule settlement.  On or about is pretty vague.  But the idea is that if you are scheduled to goto closing on say March 15th…and one or more parties can’t meet until say the 20th…then all is well as long as everyone has communicated the intentions to close on a agreed date.  But every attorney has a different opinion on how much flexibility on or about gives you.  Talk to your attorney or Realtor about this if you have concerns.

Ultimately, the important message here that just because your contract may have a certain date in it, do not assume that is the date you are going to closing.  Contract your settlement agent (usually the attorney or title company) handling the transaction early on in the process to discuss when you would like to settle.  Do not wait until right before for the date in the contract to ask when settlement will be.

Thanks for reading…

Bob Faith – Dockside Properties
757-894-1479
http://www.chincoteaguehomes.net

***information in this blog is for informational purposes only.  It is not meant to replace the guidance by a Realtor or attorney involved in a particular transaction.

Common Contract Questions Part 1.

I thought in today’s blog I would discuss a few of the common questions and misunderstandings about contracts.

The first thing the seller or buyer needs to understand is that when you complete most paperwork with a realtor, it IS a contract. In most states, any kind of agreement it’s supposed to be in writing. Let’s use the purchase agreement as an example.

It doesn’t matter if it’s called a Purchase Agreement, a Residential Contract for Purchase, or anything else, we are discussing the document a buyer would sign when they want to make an offer on property.

When a buyer signs an offer, they are signing a contract. If the seller accepts the offer and signs the same document…it is a binding contract. So that means the buyer (or seller) can’t just up and change their mind. It does not matter if it is 5 mins, 5 hours, or 5 days after the seller signs…the contract is binding.

And short of having a contingency activated, the party wanting out of the contract would need to seek legal advice if they wanted out of the contract…because they would ultimately be breaching the contract.

So it is important that all parties understand what they are signing.

Stayed tuned for Part 2 on “Deposits”.

Bob Faith -Dockside Properties
757-894-1479 – http://www.chincoteaguehomes.net

***this information is for general knowledge and does not replace the advice of attorney or Realtor involved in a specific transaction.

Zillow…who is answering the phone?

I recently had a conversation with a buyer I was working with…a conversation I have had many times before.  And I thought it would be a good blog topic.

This buyer uses Zillow to search for local real estate…something that I do not always recommend due to the inaccuracies Zillow often has on their site, and something I have blogged about in the past.  But this buyer who was committed to me and I to her.  She saw a property that she liked and even though she had my number, she used the button on the Zillow page “Contact an Agent”.  It was my listing and she was trying to reach me.  But instead she reached another agent, someone she had never heard of.  She told then “sorry…wrong number” and tried again.  This time, getting another different agent.  She said to herself…well I just have a general question (assuming this agent worked for me or my company) and asked her question.  Even go so far as to say…”tell Bob I may want to put an offer on this property…please have him call me”.

A day or two went by and when she did not hear from me…she called me from her contact listing wanting to know why I had to called her about the property.  It was then that we figured out that the not only had she talked to an agent who was not affiliated with my firm, but has the agent no experience in the community or geographic area she was interested in and worked too far away to properly assist her.  This is how Zillow works unfortunately.

When you click “Contact an Agent” you get a random agent who has paid Zillow for leads.  The listing agent is in that mix of potential agents…but they could be one of three agents or one of 10, 20, or more agents.  In all cases, the agent you get is licensed in the state in question…but many times have no experience in the area you are asking about and may even live or work hours away.  These agents in turn are not as experienced as the buyer may like…and may even provide poor advice.

So with this in mind…know who you are calling.  If you are trying to reach a particular Realtor, call that Realtor directly.  Don’t assume that if you see their picture and click “contact an agent” that you will get the agent pictured.  Zillow is okay for general information…but when you get serious about selling or buying a home…lean on your Realtor, a local Realtor.  They likely have a much better source for local information, often directly from the MLS and not on a third party website.  And just because someone’s name is attached to a listing does not mean they are the best agent for you.

If you are interested in selling or buying a home on Chincoteague Island, Virginia’s Eastern Shore, or Maryland’s lower Eastern Shore…give me a call

757-894-1479
robertmfaith@outlook.com
http://www.chincoteaguehomes.net

Real Estate Auctions…the Pros and the Cons

I thought now would be a good time to repost this article about auctions!!!

Chincoteague Island & Eastern Shore of Virginia/Maryland Real Estate Blog

From time to time I get questions about whether it is a good idea to buy property from a real estate auction.  First we need to identify why the auction is happening to begin with.

In most cases…an auction is happening because the owner of property owes money against the property and one of the lienholders is taking action to get the money owed to them.  It could be a foreclosure sale, a tax sales, a sale by an HOA, or even an auction by the owner themselves to try and sell the property.

There is one obvious reason, as a buyer, to buy at an auction…to get a property cheaper than the current market value.  Getting a property significantly below market value only happens about 50% of the time.

As for the cons…there are a number of reasons why there could be a negative.  The biggest reason is a buyer…

View original post 487 more words

Bob Faith is #1 agent in units sold for 2017 on Virginia’s Eastern Shore!!!

Earlier this week…I blogged how it was recently announced that Dockside Properties was recognized as the #1 volume sales office of 2017.  Well today, I am very humbled to report that I have been announced as the number 1 agent in volume sales for all of Virginia’s Eastern Shore. This includes all agents participating in the Eastern Shore Assoc. of Realtors MLS.

Number one in volume means I closed more deals and assisted the highest number of clients, more than another other agent on Virginia’s Eastern Shore.  It shows the amount of respect and trust my buyers and sellers have in my experience and expertise.  And I appreciate each and every one of my past, current, and future clients and their business.

If you are interested in selling or buying a home on Virginia’s (or Maryland’s) Eastern Shore…give me a call.  It does not matter if your home is worth $50,000 or $500,000.  Or if your buying an affordable campground lot or waterfront home with all the bells a whistles.  I will provide you with fair & honest representation…and will provide results in competitive market.

I can be reached at 757-894-1479 or robertmfaith@outlook.com .

Online at http://www.chincoteaguehomes.net

Dockside Properties #1 in volume sales in 2017 for all of Virginia’s Eastern Shore!!!

It was recently announced that Dockside Properties was recognized as the #1 volume sales office.  This includes all offices participating in the Eastern Shore Assoc. of Realtors MLS…which includes all of Virginia’s Eastern Shore.

Number one in volume means we closed more deals and assisted the highest number of clients, more than any other other office on Virginia’s Eastern Shore.  It shows the amount of respect and trust our buyers and sellers have in our firm.  And we appreciate each and every one of our past, current, and future clients and their business.

If you are interested in selling or buying a home on Virginia’s (or Maryland) Eastern Shore…give me a call.  We will give you “big box” results with a “Mom and Pop” feel.

I can be reached at 757-894-1479 or robertmfaith@outlook.com .

Online at http://www.chincoteaguehomes.net