Affiliated Business Disclosures in Arizona Real Estate — What They Mean for You

by Bob Baronas

What Is an Affiliated Business Arrangement?

An affiliated business arrangement exists when a real estate brokerage has a financial connection to another company involved in your transaction.

Common examples include:

A brokerage that owns part of a title or escrow company
A real estate company connected to a mortgage lender
An affiliated home warranty or inspection company

Federal law requires this relationship to be disclosed in writing. The disclosure must clearly state:

What the relationship is
That the brokerage may benefit financially
That you are not required to use the affiliated company

The purpose is transparency. It is not a requirement.

Why This Can Help Clients

Easier Communication

Affiliated companies often:

Share systems
Work together often
Fix problems faster

This can lead to fewer delays and less confusion during escrow.

Possible Cost Savings

Some affiliated companies offer:

Lower fees
Package pricing
Fewer duplicate charges

This does not always happen, but it can.

Fewer Surprises

Teams that work together regularly understand each other’s timelines. That can make the process feel smoother and more predictable.

The Downsides to Watch For

Less Real Choice

Even though the form says you can choose, some clients feel pressure to use the affiliated company.

Disclosure does not remove influence.

Costs Are Not Always Lower

Affiliated does not mean cheaper.

Fees may be average or high
Clients who do not compare options may overpay

Comparing providers matters.

Conflicts of Interest

This is the main concern.

Referrals may be based on ownership, not service
Speed and volume may matter more than quality
Problems may get brushed aside

The disclosure shows the conflict, but it does not remove it.

How This Affects Buyers and Sellers

Buyers

Buyers often see affiliated relationships with:

Lenders
Title and escrow companies

The benefit can be speed.
The risk is missing better loan terms or lower fees elsewhere.

Sellers

Sellers usually deal with affiliated title and escrow companies.

Service may be fine
Costs may not be competitive
Pressure to use the affiliate can limit choice

Sellers benefit most from comparing fees and timelines early.

Smart Moves for Clients

Whether you are buying or selling:

Read the disclosure
Ask why a provider is recommended
Compare at least one other option
Get fees in writing

Even if you choose the affiliate, you will know it was your decision.

Bottom Line

Affiliated business disclosures are about transparency. They are legal, common, and sometimes helpful.

They can offer:

Better communication
Faster closings
Possible savings

They can also:

Reduce competition
Increase costs
Create conflicts of interest

The key point is simple: you always have a choice. Ask questions. Compare options. Do not assume a referral is the best option.

If you want help reviewing a disclosure or comparing providers, that is exactly what a good agent should help you do.

Uncategorized • December 19, 2023

Welcome to Winter 2023-24 in Flagstaff Arizona!

by Bob Baronas

Unlocking the Charms of Flagstaff: Your Ultimate Guide to Homeownership in the Pines

Hello, future Flagstaff homeowners!

As a Realtor who’s had the privilege of helping countless families find their dream homes in this enchanting corner of Arizona, I am thrilled to be your guide to the vibrant and welcoming community of Flagstaff. Nestled amidst the breathtaking Ponderosa Pines, Flagstaff is not just a city; it’s a lifestyle. So, grab a cup of your favorite brew, settle into a comfy chair, and let’s embark on a journey to discover why Flagstaff might just be the perfect place for your next home.

Nature’s Embrace

One of Flagstaff’s undeniable charms is its natural beauty. Surrounded by the Coconino National Forest, Flagstaff offers a myriad of outdoor adventures right at your doorstep. From hiking and biking in the summer to skiing and snowshoeing in the winter, there’s a seasonal activity for everyone. Picture waking up to the scent of pine trees and enjoying your morning coffee on the porch while the crisp mountain air invigorates your senses.

Community Spirit

Flagstaff isn’t just a city; it’s a tight-knit community that takes pride in its friendly atmosphere. From the local farmers’ markets to the lively events downtown, there’s always something happening. The sense of community is palpable, and it’s not uncommon to make lifelong friends at the neighborhood coffee shop or during one of the many community events that dot the calendar.

Educational Excellence

If you have a growing family, Flagstaff is an ideal place to nurture young minds. Home to Northern Arizona University, Flagstaff provides access to top-notch educational opportunities. The city’s commitment to education extends to its excellent public and private schools, ensuring that your children receive a well-rounded and quality education.

Real Estate Wonderland

Now, let’s talk real estate. Flagstaff’s housing market is as diverse as its landscape. Whether you’re dreaming of a cozy cabin in the woods, a historic downtown bungalow, or a modern family home, there’s something for every taste and budget. As your Realtor, my mission is to turn your dreams into keys in hand, and I’m here to guide you through every step of the home buying process.

Flagstaff’s Four Seasons

Flagstaff enjoys all four seasons, each offering its unique charm. From the blooming wildflowers of spring to the golden hues of fall, Flagstaff’s ever-changing landscape ensures that there’s always something beautiful to behold. Embrace the snowy wonderland in winter and relish the long, sunny days of summer. It’s a place where every season feels like a new adventure.

In conclusion, Flagstaff is more than just a city; it’s a way of life. From the towering Ponderosa Pines to the welcoming community spirit, this Northern Arizona gem has a lot to offer. As your friendly Flagstaff Realtor, I’m here to make your homebuying journey as smooth as possible.

Ready to embark on this exciting adventure? Let’s chat! Whether you’re a first-time homebuyer or looking to make a move in Flagstaff, I’m here to help you find the perfect place to call home.

Here’s to new beginnings in Flagstaff – where the pines whisper, and your dreams come to life!

Happy house hunting,

Bob Baronas

Flagstaff Realtor

Associate Broker

Home Buying • Home Selling • Interest Rates • Northern Arizona Home Market • March 27, 2023

Inflation, interest rates and buying or selling a home

by Bob Baronas

There has been a lot of news in the past couple of weeks regarding inflation and interest rates. The first question we need to answer is what is the Federal Reserve? The Federal Reserve System (the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics led to the desire for central control of the monetary system in order to alleviate financial crises. The two stated goals of the Fed are to stem out-of-control inflation in the economy and promote full employment. Without getting into the weeds too deep it can be said that the tools used to stem inflation directly and negatively impact the unemployment rate in most cases. That is, the way the Fed chooses to stem inflation is to raise the cost of borrowing money which can often result in putting people out of work. Like it or not, what the Federal Reserve Bank does has an impact on our economy.

So what does this all mean to home buyers and home sellers? I believe there are two main thrusts to this question. One, higher interest rates now disincentivize those who are currently in a home from selling. That is if you are in a home now and are paying a 4% interest rate on your home loan it makes little sense to move if you don’t need to then go on to pay 6.5% on a new home loan. Last year there was a housing shortage with few homes to buy for those interested. This had the result in increasing inflation in the price of homes. Two, new home buyers will continue to have fewer choices, and the cost to buy a home is more expensive independent of the actual price of the home.

Homeowners are staying put. If you are living in your primary residence and are paying on a mortgage you acquired in the past 10 years or so you are sitting in a pretty strong financial position. Your home is worth a bunch more and your loan is much lower than it would be if you established it today. So why would a home seller list their home and move? Well, because this may be a great time to do just that. Higher interest rates create a circumstance where your buying power is just a bit stronger. Investors have largely left the home-buying market due to an increase in interest rates (nearly 2% higher than a home buyer would pay). Fewer are buying homes right now due to higher interest rates that are not expected to drop considerably ever again. That is to say that 5.5% interest will be amazingly low looking into the foreseeable future. People take new jobs, relocate and pass away and all of these folk need to sell their homes in a timely manner. All homeowners in Northern Arizona have benefited from an extremely healthy market over the last several years. With fewer buyers due to increased interest rates homes will be on the market for longer and longer periods of time. When this environment exists negotiation between buyers and sellers is most possible unlike in the last couple of years. Sellers are not losing money on any home they have owned for at least 5 years right not so there must be some flexibility in home pricing for those who must sell their homes.

For home buyers, there is a window right now where interest rates are at the historic average. Interest rates are actually good if one takes out the artificially low-interest rates of the past 10 years or so. I say with confidence, we will not see 4% interest rates in the future and we are unlikely to see 5% interest rates anytime soon. 6%-6.5% interest rates are now gold. Take advantage of them. If I am wrong then in the future refinancing is always an option. If interest rates go up, you will wish you had listened.

If interest rates decline in the next few months (again I don’t expect to see them dip below 6%) I expect another highly competitive home market with inflated home prices. Buy your first home in Northern Arizona now. I don’t see too many scenarios where this will have been a bad choice.

Uncategorized • December 19, 2022

Fed Watch. Anticipating interest rate hikes or reductions

by Bob Baronas

Forecasting Federal Reserve policy changes in coming months. The new expectations from the futures market are for a quarter percent rate hike in February, which should hold through March and May. Note: In the lower chart a 100.0% probability of change is a 100.0% probability the rate will rise. The current rate is 4.25%-4.50%.

AFTER FOMC MEETING ON:	CONSENSUS
Feb 1	4.50%-4.75%
Mar 22	4.75%-5.00%
May 3	4.75%-5.00%

Probability of change from current policy:

AFTER FOMC MEETING ON:	CONSENSUS
Feb 1	100.0%
Mar 22	70.1%
May 3	76.9%

Uncategorized • December 19, 2022

Christmas Week Interest Rate Update!

by Bob Baronas

Last week, the Fed’s decision to slow the pace of rate hikes from 0.75% to 0.50%, along with lower-than-expected consumer price inflation, sent mortgage rates lower. Both signaled that inflation may be starting to cool.

Freddie Mac confirmed: “Mortgage rates continued their downward trajectory this week…. The good news for the housing market is that recent declines in rates have led to a stabilization in purchase demand.”

The Mortgage Bankers Association chimed in with the view that declining rates should “encourage more homebuyers to return to the market in early 2023,” as overall mortgage applications already rose 3.2% last week.