BILL CHERRY, DALLAS BROKER-REALTOR

                                                       MY 4RD YEAR SERVING TEXAS

                                                                           972 380-7347

                                             Meet me on the web at www.billcherrybroker.com

In Dallas the weekends are filled to the brim with financial advisors who regularly buy thirty minute segments on the AM radio stations. They push annuities, systems that'll guarantee the investor up to 15% annual return without risk, hybrid mutual funds and life insurance products. And the list goes on and on.

They all promise they have a plan for you, no matter the magnitude of your current assets, that will make certain you don't run out of money between the day you retire and the day you are called to your heavenly reward.

While I haven't heard, much less studied all of the presentations, the only two whom I have ever had confidence in are the Metroplex's W. Neil Gallagher, Ph.D., who calls himself "the Money Doctor," and does his program on KAAM-AM on Saturday mornings, and a broker in Houston who broadcasts daily just before lunch time on KSEV-AM. His name is Steve Drake.

(If you will refer to my blog's home page, you will see my education in finance and investments and economics.)

The rest of them I frequently yell at while I'm driving and they're speaking.  I say ungentlemanly things like, "You know that's not true, you moron!"  "Stop saying things like that, you scum bag!"

But the most troubling to me are the fellows who push single family homes and duplexes as investment vehicles that they claim are all but risk free. Interestingly, these are investments that come without a prospectus, track record or third-party government monitor.  Frankly, in my mind there couldn't be a worse investment strategy if you don't have a nose and talent for it.   And huge amounts of leverage, which is what's required to follow these real estate investment plans, can fall like a house of cards if even one of the many components doesn't stay in place.

This past weekend, I came across what sounded to be a couple of young guys who were real estate agents, and they were pushing the idea that in a declining real estate market, sellers would be wise to pay the customary 6% commission PLUS a handsome bonus to the selling agent.

Their pitch was that this would cause the house to be shown more and by more agents. Consequently, you, the seller, could overprice your house and you would likely get it, and get it quickly.

I've seen bonuses offered on listings for years. I've always steered clear of them. First, I find the idea unprofessional and personally insulting to me.  But more importantly, I can't help but wonder why the listing agent and the seller think that it takes a bonus to get the house sold. And finally, if you are an ethical selling agent, you must reveal to your prospect that should they buy this listing, you get a bonus over and above the customary commission split. 

Quite frankly and parenthetically, if I were to be the selling agent on a listing with a bonus, I'd pass all of the bonus on to my client.  After all, I'm being well-paid with the agreed to commission.

If you are planning to sell a house, don't fall for the bonus idea. Just price the house right and prepare it so that it shows in its best light. If you are a buyer, before you make an offer on any home, bluntly ask the selling agent if he gets extra remuneration for the sale.

The watch to see if her or she twitches as they break eye contact with you.

Copyright 2007 - William S. Cherry

                                                                  All Rights Reserved