Jeff Taylor, the former longtime leader of Wells Fargo’s reverse mortgage division, had a stock answer when applicants declined a reverse because they felt the rates and fees were simply too high. Taylor had done the research for his own mother and decided the reverse was the best strategy to keep his mother comfortable in her later years.

“Too high compared to what?” Taylor would say. “Selling your home, paying the closing costs, and then attempting to find another acceptable place? Have you ever tried to find a senior an acceptable place, especially if that person is a member of your family? If you did, good luck on being able to afford it.”

I thought about that answer the other day when a recent AARP study (the group formerly known as the American Association of Retired Persons) revealed that 31.6 percent of seniors have experienced a substantial decline in their homes’ values in the past three years, and a fourth have exhausted their personal savings.

Among the findings in Recovering from the Great Recession: Long Struggle Ahead for Older Americans was that 66.6 percent of the 5,027 respondents at or approaching retirement age have had to tap into their retirement savings accounts during the past three years. A quarter of those polled had exhausted their personal savings, making them even less prepared for retirement.

If those older borrowers had taken out a reverse mortgage three years ago, chances are they would not have exhausted their personal savings or tapped as much into their retirement accounts. They could have had a lump sum reverse mortgage, a monthly draw, a line of credit, or any combination of those yet have made no payments.

A reverse mortgage historically has enabled senior homeowners to convert part of the equity in their homes into tax-free funds without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are available to individuals 62 or older who own their home. The maximum amount of funds received is based on age, current interest rates and a current home appraisal. Funds obtained from the reverse mortgage are considered tax-free.

The biggest lift to reverse mortgage credibility came in 1989 when the Federal Housing Administration agreed to insure the Home Equity Conversion Mortgage (HECM), which not only allowed owners over 62 to stay in their homes for as long as they wished, but it also protected the owner in the event the lender went out of business.

HECMs now account for nearly every reverse mortgage written today. Last year, AARP reported that approximately 93 percent of applicants were satisfied with the process.

The Housing and Economic Recovery Act of 2008 approved the HECM for purchase program, allowing older homeowners to make a large downpayment on a new home and then utilize the reverse mortgage as permanent financing.

The same law reduced the maximum loan fee on reverse mortgages to 2 percent on the initial $200,000 of the home’s value and 1 percent on the balance thereafter, with a cap of $6,000.  Previously, HECM fees were capped at 2 percent of the home’s value or the county lending limit, whichever was lower.

Look at the cost of obtaining a reverse mortgage this way: Let’s assume the three-year decline in home value cited by the AARP report is lost – whether with a reverse mortgage or not. However, without the reverse, also lost are all/some of the owner’s savings and retirement funds. What also needs to be considered is the loss of any increase in the share price of stocks and bonds and interest paid on retirement funds.

For those who depleted savings, had the reverse been completed three years ago, only the loss in home value, amount spent and interest would be gone. Little, if any, other assets would have been touched.

The homeowner can never owe more on the reverse mortgage than the value of the home. If the home continues to go down, and/or the senior spends more than the home is worth, the senior will never have to come out of pocket to repay the lender.

Never owing more than the value of the home is one of the reverse mortgage’s “four nevers.” The three others are payments are never required, the use of funds are never restricted and the lender never takes title to the property.

Most seniors want to age in place – stay in the home they have now. How do you put a price tag on the anxiety of leaving their long-time home and the fear of finding a new one that meets their needs and expectations? Reverse mortgage funds can help them stay put and close to their friends, church and familiar environment.

Tom Kelly’s new E-book “Bargains Beyond the Border: Get Past the Blood and Drugs: Mexico’s Lower Cost of Living Can Avert a Tearful Retirement” is available online at Apple’s iBookstore, Amazon.com, Sony’s Reader Store, Barnes & Noble, Kobo, Borders Books, Diesel eBook Store, and Google Editions.

An old friend of mine who owns and operates a small development company showed up in town for a weekend event. We blocked out some time to revisit the old days and what was next for his living and work future. Like me, his four children had grown and gone.

“If I were to do it again,” Vince said, “I probably would not have focused so much on commercial buildings. They are difficult to cash-flow because of tenant demands and tenant turnover. They all expect so much in improvements now when they move in. I probably would have bought some nice vacation properties and rented them out. Maybe even moved into one.”

The vacation rental industry continues to thrive. More and more owners are operating small vacation home businesses – especially in retirement. They are finding that even in a down economy, families often find a way to get away. The “staycation” philosophy rarely lasts longer than one year; people tend to invest in family vacations and reunions consistently – even if for shorter periods of time.

Helpful tools that enable vacation owners to run their businesses more efficiently also are on the rise. For example, HotSpot Tax Services, a Greenwood Village, Colorado-based company, specializes in gathering and paying city, county and state taxes for homes throughout the country.

“My brother and I bought a three-bedroom condo in Vail in 1999 and decided to rent it out to defray the costs,” said HotSpot founder and partner Rob Stephens. “We checked out many of the property management models at the time and each required a commission of about 40 or 50 percent. We decided to list on the VRBO website for something like $119 a year and renting it out that way worked great.”

While exploring ways to best execute scheduling and cleaning, the brothers discovered three different tax forms that needed to be registered and paid.

“We were both CPAs and we began to wonder if other rental property owners understood what they needed to do to be in compliance,” Stephens said. “That discovery really provided the basis for our business model.”

HotSpot charges a one-time set-up fee of $49.95 and monthly ($6) or quarterly ($11) filing fees and a $19.95 annual fee per property. Its six basic services:

• Obtain any required business or tax licenses based on location.

If an owner has not collected these taxes in the past or just purchased a property, HotSpot obtains the proper registration and license from the appropriate tax jurisdictions.

• Notification of the exact tax rate needed to charge renters

Based on the legal address of your vacation property, the company determines the applicable tax jurisdictions, tax rate and filing frequency. It also keeps owners informed of any tax rate or rule changes.

• Reporting reminders

The system tracks taxes that are due and automatically sends an email when it is time to report rental activity and file tax returns.

• Files monthly/quarterly tax returns and remits payments on an owner’s behalf

Customized software computes and collects the taxes due directly from an owner’s bank account. The company files tax returns electronically or prepares and files the tax return forms and remits payment of the taxes on the owner’s behalf.

• Recordkeeping

Retains copies of all tax returns filed. A history of all reported revenue, tax payments and tax calculations are posted to a personal account.

• Correspondence

Handles any correspondence with the tax jurisdictions. If an owner receives a letter, notice or any correspondence from a tax jurisdiction, HotSpot provides a response.

“For about $130 a year, we take care of all tax issues,” Stephens said. “It offers owners some peace of mind and also is a tax-deductible business expense.”

Another new vacation property service is San Francisco-based Yapstone, the parent company of RentPayment.com, which molded its electronic-payment program developed for apartments and commercial properties to fit the vacation rental industry.
RentPayment allows owners to accept credit/debit cards and electronic checks, as well as convert paper checks to electronic payments. The group options his company has set up with rental sites like HomeAway (parent of VRBO) are far less expensive than if an owner were to go it alone.

“What blows owners away is that we can get them better rates and fees on their credit cards than they can get anywhere else,” said Matthew Golis, Yapstone’s chief executive. “There’s no set-up fee, no monthly fees . . . it’s a fully operational expense platform with an electronic check option.  The vacation rental industry has been incredibly fragmented and what we offer no single owner could really do by himself.”

Tom Kelly’s new E-book “Bargains Beyond the Border: Get Past the Blood and Drugs: Mexico’s Lower Cost of Living Can Avert a Tearful Retirement” is available online at Apple’s iBookstore, Amazon.com, Sony’s Reader Store, Barnes & Noble, Kobo, Borders Books, Diesel eBook Store, and Google Editions. It mirrors a recent article by CNN on the benefits of the country, including increased rental possibilities.

We have been parents for 31 years and dragged children through three primary residences. All of the homes had terrific amenities – views, schools, nearby playgrounds and neighborhood pals.

The four kids are grown and gone now, but if you could find them (I am rarely able to do so) and ask where their fondest memories took place, all would balk at those homes and choose the lake cabin we have shared with another family.

Autumn sparks a new academic year and the unofficial close of the summer vacation calendar. Families all over the country have begun to winterize their cabins and condos, assigning maintenance chores and attempting to schedule 2012 getaway weeks.

But what happens when one family member continues to be no help at all, shows up to the family retreat without notice and has little regard for cabin tools and toys?

Attorneys David Fry and Stuart Hollander wrote Saving the Family Cottage (Nolo Press) to help answer questions about a family’s second home and encourage parents to establish a plan that spells out how things should run down the road. (“Cottage” is a term primarily used in the Midwest and Northeast; “cabin” is popular in other regions.

“The goal of ‘cottage law,’ or cottage succession planning, is to establish a legal arrangement that successfully keeps a cottage in the family over multiple generations,” Fry said. “One of the best ways to do so is to create a Limited Liability Company (LLC) because of the flexibility it offers.”

According to Fry, the problems caused by shared ownership under real property law are addressed by transferring the title to the cottage to a legal entity, such as an LLC, corporation, limited partnership, or an irrevocable trust. The entity provides a legal framework in which the parents or “founders” can script how the cottage is to be used, shared, and passed on to future generations.

According to Fry, the relationship of the members to one another and to the property is established in the LLC’s operating agreement. It determines everything about the cabin: schedule, contribution to expenses, who can be a “permissible” owner, whether a surviving spouse can inherit or use the place, and whether the property can be changed, mortgaged, or sold.

Once the LLC is organized, the owners of the cottage deed their interests to the LLC in exchange for membership units. These units, which function like shares in a corporation, can be given to children during the owner’s lifetime, or passed to children at the owner’s death.

Cottage LLCs normally are “manager managed.” This means that the family designates one or more of its members to perform such functions as paying the bills, coordinating schedules, and hiring contractors to service and maintain the cottage as stated in an operating agreement. The manager may have as much, or little, authority as the members wish, as provided in the agreement.

Decisions beyond the authority of the manager are made by the members. Less significant decisions might be made by a simple majority of members, where the biggest decisions (mortgaging the cottage, permitting renters, adding on to the cottage) normally are made by a greater majority of members (2/3 or 3/4).

“The art of cottage planning is in developing an agreement that addresses the needs and wishes of your family,” Fry said. “The biggest mistake families make is not taking the time to spell things out.”

Which brings us back to the question of the problem member. Without an agreement or formal entity, family members usually co-own the cabin as tenants in common or joint tenants – the most common forms of cottage ownership.

However, holding title as tenants in common can spark some problems: each owner can force sale of the cottage through an action for partition (a court proceeding); there are no clear rules for sharing use or expense of the cottage; owners may transfer their interests in the cottage outside the family; owners can mortgage their individual interests in the cottage, with a default causing problems for all.

“Some of these problems can be solved by using a joint owner’s agreement,” Fry said. “But the current owners rarely sit down and negotiate an arrangement.”

Fry suggests if the parents still own the property and the children share use of the property, the parents could establish an ownership arrangement that could keep a sibling from a veto and would allow a form of majority rule.

“Or, if the parents agreed that a child was being unreasonable and difficult, they might not give that child an interest in the cottage, but instead give her other financial assets through their estate.”

What’s important is to ensure that memorable times continue with the least amount of aggravation. If you have a family getaway, take time to review your master plan.

Tom Kelly’s new E-book “Bargains Beyond the Border: Get Past the Blood and Drugs: Mexico’s Lower Cost of Living Can Avert a Tearful Retirement” is available online at Apple’s iBookstore, Amazon.com, Sony’s Reader Store, Barnes & Noble, Kobo, Borders Books, Diesel eBook Store, and Google Editions.

The example might come under the main category of “You Can’t Have It Both Ways.”

Probably the last straw for the reverse mortgage lenders that exited the market this year (Bank of America, Wells Fargo, Financial Freedom, Seattle Mortgage) was not only the “trailing spouse” controversy but also the fact AARP filed a case on the topic – a move that the industry considered a low blow.

Lenders once looked to AARP as a silent supporter of reverse mortgages, but the huge group formerly known as the American Association of Retired Persons has run for cover (see former lenders) at signs of negativity.

AARP refuses to jeopardize its reputation, or advertising base, with any product or service it deems controversial even though some products and services are useful and necessary. According to 2008 records, AARP pulled in $652 million in royalties on insurance products alone that it blessed with its stamp of approval.

The AARP case was against U.S. Department of Housing and Urban Development regarding its policies for the Home Equity Conversion Mortgage (HECM), the country’s most popular reverse mortgage program. In a capsule, the case involved a surviving spouse who wanted to stay in her house after her husband died. She had not been listed on the loan. The judge ruled in favor of the lender because under the loan contract, the loan became due if the property was not the principal residence of one surviving borrower.

A reverse mortgage historically has enabled senior homeowners to convert part of the equity in their homes into tax-free funds without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are available to individuals 62 or older who own their home. The maximum amount of funds received is based on age, current interest rates and a current home appraisal. Funds obtained from the reverse mortgage are considered tax-free.

Reverse mortgage funds can be distributed either in a lump sum, regular monthly payments, line of credit or in a combination of those options. When the house is sold, or the last remaining borrower dies or moves out of the home, the loan amount plus the accrued interest is repaid. The borrower can’t owe more than the value of the home.

Most of trailing spouses who remain in the home after one spouse dies were part of the reverse mortgage agreement when it was first signed. However, several were left out of the document, usually because they were too young to qualify or because including them would have meant a reduced amount. Now, some of those trailing spouses who were never vested in the reverse mortgage want to stay in the home without paying off the underlying reverse mortgage.

You can’t have it both ways. You are either in the deal or out of the deal, but you cannot reap the benefits if you were never in the game. AARP sided with the trailing spouse.

The ramifications of the case have already taken a toll. In addition, some seniors have not made property tax and insurance payments, triggering reverse mortgage clause that states lenders may begin foreclosure proceedings if taxes and insurance are not kept current. Earlier this year, FHA issued new, relaxed guidelines for dealing with HECM borrowers who are behind on or stopped paying their property taxes and homeowners insurance.
However, these issues – along with slumping houses prices – have pushed lenders away from reverse mortgages. Those reverse mortgage lenders that remain say that the pool of potential candidates continues to grow.

“We view this as a time of great opportunity,” said Peter Bell, president and CEO of the National Reverse Mortgage Lenders Association. “As a result of the recession, home equity has emerged as the primary source of wealth among America’s seniors and needs to be considered an essential retirement planning tool. And as some companies exit the sector, it creates room for others to enter and grow.”

FHA reverse mortgage lending remained steady at $1.4 billion during the month of June. However, servicers filed 5,650 claims on FHA-insured Home Equity Conversion Mortgages during the first three quarters of 2011, a 70 percent jump from the same period in 2010.

Tom Kelly’s new E-book “Bargains Beyond the Border: Get Past the Blood and Drugs: Mexico’s Lower Cost of Living Can Avert a Tearful Retirement” is available online at Apple’s iBookstore, Amazon.com, Sony’s Reader Store, Barnes & Noble, Kobo, Borders Books, Diesel eBook Store, and Google Editions. It mirrors a recent article by CNN on the benefits of the country, including increased rental possibilities.

Wells Fargo announced in March it would no longer accept reverse mortgages through its broker network and yesterday it got out of the industry altogether.

Wells Fargo, the nation’s largest reverse mortgage lender, was the kingpin in the industry in more ways than one. It had a 26.2 percent market share, according to the latest data from Reverse Market Insight, the largest network of reverse mortgage professionals and a money-making operation.

It simply did not like the road ahead.

HUD has been considering lowering the maximum borrowing amount for its reverse mortgage. In addition, lenders are concerned that if taxes and insurance payments are not kept current on homes, they could be forced to foreclose on cash-strapped seniors. No lender is eager to do so.

A reverse mortgage historically has enabled senior home owners to convert part of the equity in their homes into tax-free funds without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are available to individuals 62 or older who own their home. The maximum amount of funds received is based on age, current interest rates and a current home appraisal. Funds obtained from the reverse mortgage are tax-free.

“Reverse mortgages and HECM loans are readily available to seniors as an important tool to help them stay in their homes and to fund their longevity,” said Peter Bell, president of the National Reverse Mortgage Lenders Association. “The decision by Wells Fargo that it will no longer originate new reverse mortgage loans does nothing to change this. The HECM program remains a relevant tool and the vast need for it continues.”

Reports show Wells closed 1,317 reverse mortgages in April and its annual total for 2010 came to 16,213 FHA Home Equity Conversion Mortgages.While its monthly average was down slightly, overall volume did not appear to have any substantial change leading up to the exit.

All of the reverse mortgage industry’s big-name players have left the business this year. Financial Freedom, Bank of America and Seattle Mortgage preceded Wells Fargo’s exit. Like the others, Wells Fargo indicated it was closing the reverse component to focus on its core mortgage business, or “forward” mortgages.

Earlier this week, Vicki Bott, HUD’s deputy assistant secretary for single-family housing, announced she was leaving to focus more time and energy on personal family matters.

Bott hastily uprooted her family in Austin, Texas and moved to Washington, D.C. to help supervise FHA’s single-family loan programs during a period of unprecedented growth as the nation slowly dug itself out of a housing foreclosure crisis.

Although she supervised a staff of hundreds focused primarily on FHA’s “forward” mortgage programs, she had a profound impact on the HECM program.

We have some friends who rented a home in the mountains for Memorial Day weekend. It was the only weekend of the summer their entire family could gather.

Summer jobs, baseball tournaments and out-of-town weddings erased the chance of taking their usual time during July and August, so they settled for the traditional opening weekend of summer.

The owners of the home were “friends of friends” and did not typically rent out their home, keeping it instead for family use only. The main reason for this was that the owners had inconsistent work schedules and usually made last-minute decisions to use the mountain place.

Long story short, our friends said they did not get what they paid for. The home that could “comfortably sleep eight” had a double bed in one room, single bed in another room and various foam mattresses and cushions in the second-floor loft.

“The setup would have been fine several years ago, but some of our children are grown adults,” the mom said. “I was just expecting a few more real beds for the amount of money we paid.”

People who do not rent out their homes on a regular basis can underestimate what they need to do to get it ready and the basic information they should communicate to renters. If visitors are paying to use the place, they should receive the product, or service, they are paying for.

While some vacation homeowners deliberately try to deceive their customers, most of them know that one bad review can spread online in a hurry. Misleading information can lead to vacancies, upset vacationers and lost income.
Here are some vacation-home topics for owners and renters to consider:

1. Steps and stairs. If your mountain cabin is reached only by a long trail from a community parking lot, be upfront about the time it takes from the car to your door. While most people in the area might be familiar with the territory and common quirks, don’t surprise out-of-area renters with what you might assume as an obvious custom. Also, grandma may not be able to make the trip if the steps are steep and numerous. “You can see by the photo that the house is on a hill” is a poor excuse for not explaining why a renter would have to be a finely tuned athlete to negotiate the switchback staircase to the beach.

2. For the dogs? If don’t want pets in your summer place, make sure everybody who might rent it knows. Some people take it for granted they can take their pets anywhere unless told otherwise. If you do allow pets, you will lure those looking for that possibility and also warn people who may be allergy-conscience at the same time.

3. Not-so gourmet kitchen. Some visitors love to cook. The traditional breakfast pancakes and hot dog dinners are not the only entrees vacationers plan to serve. If your kitchen offers only basic utensils, a fry pan and an oven, make sure your vacationers know what to expect. They may have planned all year to show off their new blended drink and may be isolated high on your hill without a blender.

4. Every picture tells a story. If the pictures on your site or flier do not give an honest account of the views, furniture and fixtures a visitor will encounter at your place, don’t use them. If you have to stand on the toilet with a high-powered camera to see a tiny portion of the lake, it’s probably not a good idea to use that shot in your promotional materials. Display photos that show the actual views renters will see from the living room, bedrooms, kitchen and deck. If you deliberately mislead, karma has a way of circling back to you.

5. Out of range? Many guests now expect to have Wi-Fi service (and/or cell phone coverage) in homes that they rent. One member in the party might even need it to do work while he or she is away from home. If your home does not have Internet access, disclose it in your marketing material. It’s best to mention how far away the nearest connection might be.

Every home has plusses and minuses but paying customers do not like to drive all day, or fly all night, and walk into a negative surprise. So, if your “private” hot tub is actually shared by two other units, that might not be the late-night picture your guests have in mind. If you are an owner, do your best to accurately describe your property. If you are a renter, make sure you understand what you are renting.

Tom Kelly’s book “Cashing In on a Second Home in Central America: How to Buy, Rent and Profit in the World’s Bargain Zone” was written with Mitch Creekmore, senior vice president of Houston-based Stewart International and Jeff Hornberger, the National Association of Realtors’ international market development manager.

Mark Greene, chief executive officer at FICO, told attendees at a loan processing conference in Orlando that it would be 50 months before the foreclosure problem in this country “goes away, and that’s assuming there are no more foreclosures.”

Minneapolis-based FICO provides lender analytics and measures consumer credit risk. Among its products is the FICO Score that lenders use for residential loan applicants.

Lew Sichelman of the National Mortgage News also reported that Shelley Leonard, the executive in charge of consumer and home equity lending initiatives at Lender Processing Services, said it could be two years or more after that for the market to return to “normal.”

According to Leonard, there are simply so many distressed properties and it will take until mid to late 2013 for them to clear. And that’s just to get to 2009 levels, Leonard added. “To get back to prior to that, we’re talking much longer – 2015 or 2016.”

Both the Federal Housing Administration (FHA) and mortgage investor Fannie Mae recently launched startups in the energy conservation arena.

FHA’s program, “PowerSaver,” allows eligible owners to borrow up to $25,000 at fixed rates between 5 and 7 percent for as long as 20 years to finance high-efficiency windows and doors, heating and ventilating systems, solar panels, geothermal systems, insulation and duct sealing, among other retrofits.

Fannie Mae’s “energy improvement” mortgage add-on folds the cost of the improvements, capped at up to 10 percent of the estimated market value of the home after the energy-efficiency enhancements, into the mortgage itself.

Seattle-based Zillow, which introduced automated home valuations known as “Zestimates” several years ago, said it has improved and expanded they way it evaluates homes, its third major overhaul since 2006.
According to Stan Humphries, Zillow’s chief economist, the company’s third algorithm allows the company to evaluate 97 million homes (up from 72 million) while being 33 percent more accurate.
“As with our previous two algorithms, now we’ll start tweaking the algorithm to fix all the little issues that Zillow users find and researching entirely new approaches that will, in time, become version number four of our valuation algorithm,” Humphries wrote.

First-time homebuyers are critical to the housing industry. Once they get in the door, this enables the former first-timer to move up, etc. In a nutshell, first-time buyers help to keep the housing ladder moving.
What has skewed this traditional ladder is the number of distressed homes on the market. There are more homes than buyers. So, I wasn’t concerned when I read the latest statistics that some investors had beaten out first-time homebuyers to a purchase. The market needs investors, too.
What made the topic a bit more interesting was a call from an investor friend who conducts rather thorough research in his goal to obtain one rental property each year. Historically, his key variables have been location, condition of the property and the ability to rent it out to pay the mortgage – or the money borrowed/invested to purchase and maintain the home. Recently, he’s looked for attractive financing terms, especially situations where the seller (or foreclosing lender) is willing to carry all or part of the financing for a few years.
“I lost the place to another investor,” my friend said. “The buyer was a realtor.”
This should not come as any big surprise. In fact, on May 17, statistics from the National Association of Realtors revealed that 22 percent of all existing home transactions were to investors.
“A good portion of the investors are likely to be realtor members based on the fact that realtor population historically has had a notably higher percentage of second- home and investment home ownership compared to the general population,” wrote Jessica Lautz, NAR research economist. . . “The most recent data suggest 43 percent of realtor members had at least one investment property.”
NAR has approximately 1.1 million members and is the nation’s largest trade organization. However, not all salespersons are members. Some analysts estimate the number of real estate agents in the U.S. is close to two million.
The question becomes: Should a person who serves home buyers and seller for a living be held to different guidelines if they are competing to purchase a home? For example, should the listing be exposed to the market for a certain amount of time (perhaps 48 hours) before a licensed agent can buy a home that somebody else is ready, willing and able to buy? Especially if that party is a first-time home buyer?

In this market, the seller probably does not care. While multiple offers are starting to surface in some neighborhoods, many sellers simply want out and will take the first solid deal that is presented. Rarely are new listings snapped up in the first few days on the market by an investor in competition with a first-time homebuyer However, it has happened and will continue to occur as the attractive investor market continues.

“It is the agent’s obligation to get the highest possible price for the home,” said Alan Tonnon, real estate attorney, author and a charter member of the Washington Real Estate Commission. “That price may even be higher than the listing price. It is typically in the seller’s best interest that no restrictions be set on offers so that the seller can consider all offers.”

Many real estate brokerages are members of multiple listing services. These “multiples” are large listings of all the properties available for sale in a specific area. When a seller signs a listing agreement to sell a home, the agent accepting the listing typically has until 5 p.m. of the next business day (formerly two business days) to enter the property in the multiple. So, if the property is listed on Friday, the agent has until 5 p.m. Monday to enter it in the multiple.
When homes are moving quickly and certain areas become extremely desirable, it’s common for a property to be sold to a client represented by an agent in the listing office within this “next business day” time period. Sales associates share the wants and needs of their potential buyers, despite the separation of information required by new agency laws. So when an attractive home becomes available, associates in the listing office typically have the first shot at selling it.

What is your opinion? Should agents be able to compete to purchase a home the first day it hits the market? If not, when? Should first-time buyers be given priority over investors? Agents? We will print your answers in a future column.

Tom Kelly’s book “Cashing In on a Second Home in Central America: How to Buy, Rent and Profit in the World’s Bargain Zone” was written with Mitch Creekmore, senior vice president of Houston-based Stewart International and Jeff Hornberger, the National Association of Realtors’ international market development manager.