MAXIMIZING REAL ESTATE SAVINGS: A PILOT’S GUIDE WITH KEVIN WALKER

Tim:[00:00:59]My name is Timothy P. Pope, I’m a certified financial planning advisor, specializing in the planning needs of the professional pilot. I am glad you’re here and you’re joining us. Because it’s still pretty new after the name change, I’m gonna remind everybody, this podcast was formally called the Pilot’s Money Podcast. So if you were wondering, wait where did Tim and the Pilot’s Money Podcast go? I’m glad you’re here and that means you found us. So in today’s episode we’re going to have an excellent conversation about how you, the professional pilot or if you’re actually an air traffic controller listening to the show. How you guys can save money on your next real estate transaction. Okay, we do have a guest episode.
[00:01:42]Joining me today is Kevin Walker. Now Kevin was actually on the show last year when it was called Pilot’s Money podcast, we actually talked about aircraft ownership, the cost beyond the purchase. If you haven’t listened to that episode, go back and listen to it. We recorded that in September of 2024. So Kevin’s journey with aircraft ownership was fascinating to listen to. But in today’s conversation we’ll talk about the other things that Kevin does in his company Beacon relocation, and how they help professional pilots and air traffic controllers save money. Which is one benefit and I think there are other benefits that we’re going to get into. So with that, let’s jump into today’s conversion with Kevin.
[00:02:22]Welcome back Kevin.
Kevin:[00:02:23]Thank you. I’m happy to be here. Thank you. Tim:[00:02:26]Before we jump into today’s conversation, we are actually recording this just days after the PSA and army helicopter crash. I know as a private pilot myself, and then you as a retired controller who worked the Bravo in Charlotte, and you do contract trips now in a jet, and you’re also an aircraft owner. I’m sure that, I mean, this is just on everybody’s mind. Kevin:[00:02:53]Yeah, it’s very unfortunate. our NAS system is the safest in the world, you know, but I think if you have enough airplanes over enough time you’re going to have an incident. Just things are going to happen. And, feel for all the families out there and I’ll tell you, I also feel for the controllers that were in the tower and, and I guess as a former controller just thinking about. The impact it would have on me as a controller that was working those flights. It would be devastating. I know they have some programs there for controllers for
counseling and I sure hope the controllers that witnessed that they’re able to seek counseling there too. I can’t imagine what that would have been like for them too. Tim:[00:03:37]My heart just goes out to the 67 families that have this huge gaping hole. And I think to your point, I mean, this is the first mass casualty crash, like, you know, in 16 years, which is a testament of the safety in our system. So yeah, thoughts go out to the families and, you know, we’ll let the NTSB do their job and, you know, over time we’ll learn more about it, I’m sure. Kevin:[00:04:01]Yeah..
Tim:[00:04:03]Well, I am glad to have you back on the program. So, last time that you were on the show we were flying a different flag. It was the Pilot Money Podcast last summer. And, you talked about the cost of airplane ownership. So the cost beyond the purchase if listeners haven’t listened to that episode, it was fantastic. They should listen to it. It’s episode 20 where you can go and hear that. I know for me, after listening to that, I started thinking about partnerships and airplane ownership as opposed to just owning it outright myself. So, a lot of value in that conversation today. We’re going to talk a little differently. So, you are a retired controller, obviously an airplane owner, but you also help controllers and pilots in their real estate transactions and also saving money in their real estate transactions. So, talk to us about that, what’s your company called, and how are you guys helping pilots and controllers across the country?
Kevin:[00:05:01]Okay. Thank you. Yeah. Our company is called Beacon Relocation and we are a first, full service real estate company. We have little over 1500 realtor partners throughout the country. And, when a NACA member, air traffic controller, that’s part of the labor union moves from facility to facility, they can reach out to us and we would place them with a real estate agent. Same with airline pilots. If they’re interested they can reach out to us as well through a program. And also now our pilot portfolio folks can do the same. So, we’d place you with one of our vetted five star real estate agents in the area that you’re moving.
[00:05:38]And, the real estate agents have agreed in writing ahead of time to offer back 20 percent of their commission towards closing costs, and it would be, it would be indicated on the settlement statement. So, it truly reduces the amount of money that the new home buyer that they’ve got to bring to the closing table. We’ve also got a preferred national lender that offers the best rates of the of any consumer in their bank. Those are offered to our clients and their
fees and their service. We’ve been working with them since 2009 and we have a lot of good feedback from the pilots and the controllers on that bank.And, we’ve got five or six loan officers in that bank that they provide the benefit to our clients.
Tim:[00:06:20]Wow, so there’s a lot there, so, you guys you help controllers, you help pilots, the real estate agents have agreed in writing to offer a percentage of their commission to the pilot, and then you also are connected with a national lender that it sounds like is doing discounted programs or at least rates as well. Let’s take a step back. So you started with the controllers, is that right? How did this program kind of get off the ground? How long has it been running?
Kevin:[00:06:49]This program started regionally when I was a controller at Charlotte and I was the resident real estate agent for controllers that were moving in and out. And, the labor union would refer new controllers to me. That started in 2004 and then when I retired as a controller in 2016 the union asked me if we could handle this across the country. And what they liked about it was the discount or the rebate, if you will. That rebate it varies, from there are a couple of states that the rebate varies so but it’s, by and large the 20 percent back. So we started that in 2004 and when I retired, it started nationally for the union around 2017. So, when we signed the contract with Natka and we’ve been providing it now since 2017 or 2018 we did have a sister company or still have that sister company called Flight Crew Homes. And, in one of the major airlines has our information posted up in the crew rooms. There as well, but it’s all beacon relocation also.
Tim:[00:07:53]So that started with controllers 21 years ago. Helping them move in and out of Charlotte and then nationally nine years ago. So, a lot of experience with this program, working out the kinks, you know, strengthening those key relationships. Now with interest rates being higher than what most of us are used to in recent history, right?
[00:08:13]On this show, we talk about how pilots can take control of their personal finances, keep more of their hard earned money, and ultimately maximize their life and maximize their money, right? So, we think about real estate transactions, a couple of use cases, hey, I’ve got hired by a major airline. I’d like to move in base. Maybe I’m still on year one pay, or maybe I’ve waited, a lot of times we talk about waiting beyond year one pay to years two and three, so you can just really settle down and get the home that you want. So there’s a use case there, and then of course folks doing rental properties, you know, and investment properties, you know, there could be a use case there. Now, with the
agent’s 20%, is that just if I’m buying a home, or does that work if I’m selling a home as well?
Kevin:[00:08:58]It works if you’re selling a home as well. So, whether you’re buying or selling, there would either be a rebate back to you on the buy side, or there would be a reduction of the listing fee by that 20%, if you’re selling a home,
Tim:[00:09:13]Okay. And, that with the selling I wanted to highlight that because our family has actually used this service a couple months ago. And, we had to sell a property. We live in Charlotte. We had to sell a property that was in Florida. And, I didn’t know a realtor in Florida. We were kind of going through and some folks weren’t returning the calls and this or that. And, I’m like, Oh, you know what? Kevin does this. Why didn’t I reach out to him? And your company and you guys, you know, took care of it and we sold for asking. So, yes, that happens, that works with, on the buy side and the sell side. Now, there has been changes in how realtors receive their compensation. Talk to us about what’s changed and what stayed the same. This is an education for me ’cause I’m not an expert in real estate, so I’d love to hear about that.
Kevin:[00:09:55]Well a lawsuit originated in the Midwest in 2022 and, historically a listing agent would charge a seller, a listing fee, and then they would split that listing fee or that compensation with a buyer’s agent. And that, that’s been the way that we’ve operated as real estate brokers for decades.
[00:10:20]So a lawsuit developed. Sellers say, Hey, why are we having to pay the buyer’s agent when we don’t know, why are they getting half of the money that we’re paying? We could be paying less and that developed and then buyers actually joined that lawsuit because their real estate agent was being paid from the listing agent, yet that total fee was all inclusive into the purchase price.
[00:10:48]So, really they were paying their buyer agent fee because, it was lumped up into this purchase price and the numbers, yet they had no ability to negotiate it and in most cases didn’t even know what it was. My understanding is there was a buyer agency agreement. In 18 of the 50 states that outlined how the buyer agent was paid, but there were 32 states prior to this lawsuit that didn’t use it, or they weren’t required to use it.
[00:11:14]So, the consumer wasn’t aware in many cases how their agent was being paid. Or could they, you know, could they negotiate that fee? So there have been settlements there and, and out of that, the national association realtors that they kind of protect the realtors, if you’re going to list homes on the MLS,
you have to belong to the association of realtors and they were one of the parties that settled. But admitted no guilt, of course. But the reason that they were sued was because there was a mandate that a listing agent was required to compensate a buyer’s agent through the MLS. So that’s all been removed now as of last August 17th 2024, all firms in the United States had to be compliant.
[00:11:57]So there’s no more offer of compensation, the MLS. But, what does that really mean to the consumer? There were two things that came out of that lawsuit that would affect the consumer. The first one is a consumer, the real estate agent, the buyer’s agent has to have a signed buyer broker, buyer agency agreement prior to touring the first home.
[00:12:18]So, and that’s many consumers weren’t accustomed to that. So before, for a real estate agent, no matter who it is which all real estate agents are, are supposed to be compliant now, regardless of their company or the state before they show you a house, you have to sign a contract with them while that is, is, is not negotiable, the terms of that contract is negotiable. So there are states you can do it just for one home. You can do it for the day. You can do it for a week. So just know that that buyer agency agreement is negotiable. And, I would recommend that you do it for a short term and just extend it. If you determine that the buyer’s agent is good for you.
[00:12:55]You’re a good fit and you want to extend it for several months, then, then you certainly can extend it. So that was the first thing that came out of it. The second thing that came out of it was indeed how our buyers’ agents are now paid. And there is one of three ways that they can be paid now. One is the way they’ve always been paid the listing agent can approach the seller when they’re listing the home and ask them, do you want to predetermine the amount of money that you would like to pay a buyer’s agent?
[00:13:22]Yes, no, or maybe. And, and if they say, yeah, I would, we’ll offer X percent to this buyer agent. So, out of that number 20 percent of that goes to the consumer in our program. The second way that they can be paid is through concessions. So if a buyer’s agent calls a listing agent and said, Hey, I’m going to, I’m going to bring some buyers here to look at your listing is your seller offering to pay the buyer brokerage fee the way that we’ve done for the past. You know, several decades, they may say, well, maybe it’s not predetermined. You just need to make an offer. And, in that offer, you need to ask for seller concessions. So, whatever your fee is, you need to ask, and let’s let the buyer and the seller negotiate that in the offer. And, then out of that, of course, whatever that percentage is that your buyer’s agents paid 20 percent of that would be allocated to the buyer. The last way that a buyer broker would be paid
is from the buyer directly. If a seller is unwilling to pay that buyer broker period whatsoever, then the buyer has to pay for it at closing in which they would get a 20 percent reduction off of that.
[00:14:29]We have data actually starting back from last July 1st, cause that was the first deadline for it before it was, it was pushed back to August 17th. And, I would say probably 70% the sellers are still predetermining the amount just like we’ve always done, and they’re paying the buyer’s agent that way, even though it’s no longer in the MLS, probably 25% or maybe close to 30% it is negotiating it in concessions and we’re seeing very few. It’s a one-off situation where. The seller is not willing to pay the buyer’s agent. So if you think about it, they’re going to get a lot less showings more than likely if they’re not willing to pay that buyer’s agent. So, I think that’s what listing agents are explaining to their sellers as they put them up on the market.
Tim:[00:15:15]Yeah. So it sounds like that law change or the result of that lawsuit put a lot more control in the buyer’s hand, because first and foremost you know, you’re having to sign, with your showing agent or your buyer’s agent, but that’s negotiable. So, like you said, hey, you can take it, take them for a test drive if we’d like them if they’re experienced, if they’re knowledgeable, if we get along, if we have good chemistry, then hey, we’ll extend it.
[00:15:38]But if not, hey, thanks for showing us the home and you can go and find another buyer’s agent. So that’s one. And, then two I like that it gives the buyer control on how their agent gets compensated because, if it’s only dependent on, on the sales price of the home and it’s a percentage, then it’s like, well, is my buyer agent really motivated to help me get the best price possible? And so that, that’s kind of in the back of your mind, and the commissions are negotiable. But, what’s the typical commission that a pilot who is looking at buying or selling a home, what’s the typical percentage that they could expect to pay their real estate agent?
Kevin:[00:16:16]Well, we’re not seeing. You’re talking about from a buyer’s agent because we’re not seeing buyers paying the buyer’s agent. We’re only seeing sellers pay the listing agent
Tim:[00:16:25]Okay, yeah, walk us through how that works, when the seller pays the listing agent and then how the buyer’s agent would get compensated, are they splitting it 50-50, that kind of thing, so maybe there’s two questions there.
Kevin:[00:16:35]Well so all numbers in real estate have always been negotiable and they still are. In my market, from my experience, you see a lot of it being split 50, 50. Sometimes you’ll see a listing agent take just a little bit more of it. it varies literally from home to home, from agent to agent. But, as an example, what that number would be in the Charlotte market where I am and I pulled this from NAR third quarter, 2024. That was the most updated number that they had in Charlotte. The average sales price is $421,000. So just as an example, if you’re purchasing a $400,000 home and your buyer’s agent, and again, this is just an example, let’s say your buyer’s agent was being paid two and a half percent, that would be a $10,000 brokerage fee and 20 percent of that would be pulled off. So a couple thousand dollars. So each one of these transactions generally would be a couple of thousand dollars or more. I think the airline pilots transactions are much higher than 400,000. So the credit would be higher.
Tim:[00:17:38]Yeah. So, okay. So, you said two and a half percent if they’re splitting it 50-50. So, two and a half times two, that’s five percent, is going towards the real estate trend, or, agents commissions there both on the buy side and the sell side. So, then that’s split two ways. Yeah, walk us through. So as no surprise, most of our listeners are in Charlotte, Atlanta, Dallas, Houston, and Denver, right? So, maybe walk us through what the median home prices are in those cities. And let, let’s see how, how that could shake out in savings.
Kevin:[00:18:07]Again NAR on their website, they post numbers first quarter and third quarter of each year. So this is Q3 of 2024. They’ll have new numbers that’ll come out. First quarter of 2025, but Q3, 2024 in Atlanta, the median sales price in Atlanta is $382,900 in Charlotte, it was $421,800, Dallas, $384,100, Denver was the highest the median sales price in Denver, $654,600. And Houston $348,200.
Tim: [00:18:44]Okay, so those were the median homes that you listed. So, most was between the high threes, the mid fours, with Denver being the outlier. For those who fell asleep in stats class, the median is that price point where 50 percent of the properties are going to be higher than that, and then 50 percent are going to be lower than that. And you made a comment that I agree with 100 percent is that typically with our clients so, airline pilots, we’re seeing home prices higher than that. Maybe, I probably say two standard deviations of the deals we usually see are when we’re helping somebody buy a home easily 750 to 1.5 million.
[00:19:21]There’s going to be a little bit more on the higher end and then some that are on the lower end of that But I think that would be fair. So let’s say if we had an 800, 000 purchase price and 5 percent is going towards the agent. So,
they’re going to split that at 2.5 percent each. Okay, so my buyer’s agent or my seller’s agent would be $20, 000 and then 20 percent of that $20, 000 would be $4,000, right? So that’s $4,000 that we could apply towards the closing cost. That’s real, that’s real money. That’s real savings.
Kevin:[00:19:54]That’s right. Yeah, that’s true it all shows right up there and it reduces the amount of money that you bring to close.
Tim:[00:19:59]So, I think in today’s market with interest rates being fairly high. I mean, we’re talking high sixes, low sevens in a lot of cases with home prices being high as well. Hey, pilots should really be looking, hey, where can I you know, how can I keep more of my hard earned cash, right? And it sounds like the Real Estate Agents Commission, that rebate of 20 percent is one of the ways. Now, is this deal available all over the country or are there carve outs that folks should be aware of?
Kevin:[00:20:29]The 20% is available in 41 states There are nine states that the individual state’s real estate commission doesn’t allow those amounts in which cases it’s capped at $500. And, if somebody inquired, we’d have to let them know what those states are. I could tell you if you wanted to know real quick, but that’s limited to a 500 gift card, but that’s only, it’s only because of the individual state, the real estate commission. We have to abide by their state laws.
Tim:[00:20:58]So, if you want to know more, if you want to know if your state or the state that you’re moving to falls into those nine, you guys can reach out to Beacon Relocation. They can let you know. But, even if it is one of those nine, it’s still worth a conversation. Because, you can quickly get them connected with your network of real estate partners and then also the national discount protograms with.
Kevin:[00:21:24]So, we also have two on our website discounts through pods. If someone wants to use that, they can just reach out to us too. Generally I’ve found with pods that the longer the distance that you’re moving, the better the deal is. But, just as an example last year we had someone moving from San Francisco to Philadelphia. My understanding was they’re full service. Van lines was $32,000 and the pod option was half of that was $16,000. So it took three pods. They left two of them in San Francisco. They moved into a rental for a year in Philly and took one pod. And, then when they purchased their home, they called for the other two pods and those were delivered as well.
Tim:[00:21:59]Okay. Wow. So the savings and the discounts are stacking up and guys, you specialize with controllers, you specialize with the professional pilot and that’s why you’re also your partner on the show and we thank you for your support. You’re bringing the savings that your clients have enjoyed for the past 21 years and you’re bringing it to our listeners as well. So they can go to, into the show notes and click on beacon relocation. Once there, you guys have a pilot’s portfolio link.
Kevin:[00:22:29]Yeah. You’d click on the red button that said apply now on the homepage. And then it’ll be a dropdown and you’ll see Pilot Portfolio there in the dropdown.
Tim:[00:22:38]Okay. So is there anything else that you think the listeners should be thinking about as they evaluate their own real estate transactions at this point?
Kevin:[00:22:47]The prices are still a little bit high. The interest rates are still a little bit high. The credit is very important you can use that credit if you want to, towards buying down the interest rate as well, if you don’t want to use it towards closing costs. But, the real estate agents that we use are five star agents throughout the country. If for whatever reason, personalities don’t match, just let us know. We can reassign a new one there as well. So it seems to be pretty popular. We’re always thinking two steps ahead. As a pilot or a controller would be doing that seems to resonate with them really well. And we teach the real estate agents that also, so it seems to be a pretty good connection. With the, with this program and the pilots and the controller. So, if you have any questions whatsoever, just, just reach out to us at Beacon Relocation and we can certainly get your questions answered.
Tim:[00:23:37]Awesome. Well, perfect. Well, hey, well, thanks for joining the pilots portfolio. Kevin, looking forward to having you back on throughout the year just to give us updates. What’s happening in the local markets that our listeners care most about. So thank you for joining.
Kevin:[00:23:56]Yep. Thank you for having me. I really appreciate it.
Tim:[00:23:54]And that brings us to the debrief section. So the first thing that I want you to think about is how you can use the dollar saved on your next restate transaction. Okay so for buyers and sellers and 41 out of the 50 states, you could be eligible to receive up to 20% of the realtor’s commission towards your closing costs. So during the interview, I worked up some quick math, on an $800,000 purchase price. So that equals about $4,000 in money towards closing
cost. And that assumes you know if the agents split 5% commission equally between themselves. So $3-4,000 is $4,000 right? So if you’re 50 years old, that’s half of your backdoor roth for this year. If you’re under 50 it’s more than half of your backdoor roth contribution this year. Right, so how could you use the savings on your real estate transaction.
[00:24:46]And as I mentioned you know, I have used, my family has used these services on the sale side, savings are available for both buyers and sellers. So that’s the first thing. The second thing that I want you to think about is that changes in real estate regulations, it has put more control, more power, more choice in your hand as a buyer. So Kevin mentioned that you have to have a buyers agreement signed before touring the first home. But this agreement is negotiable, meaning you know, if you don’t have a relationship with your buyer’s agent you can sign the agreement for a short term duration. You can get your feet wet, you can see if that arrangement is going to work for you. And if it dosen’t work, no harm, no foul. Let it expire.
[00:25:29]And you move on to the next buyer’s agent. If it works for you, and that’s who’s going to be working for you to look for a home. I can think of like four families right now that are in the process of buying homes. And you move from city, a lot of times it’s multiple states away, several states away. You don’t know anybody there, I guess it’s like google review, it’s more recommendations from a friend or something I guess. It’s how you’re finding the buyers agents, right? So I think that this buyer’s agreement is good because you can take it for another test drive and see if it they’re gonna work for you. The last thing that I want you to think about is the other possible benefits that Kevin discussed.
[00:26:08]So he mentioned that Beacon Relocation has the national lender who is offering competitive interest rates. And interest rates right now, they’re higher than what we’ve been accustomed to in recent history, I’ll say. Either we’ll look at the data and we’ll find periods where they’re much higher than they are now. But still, I think they’re higher than most people want to pay. And so I actually in retrospect, I wish we had gone more into that during our interview. So maybe i’ll have Kevin back and we’ll talk about those points. But my perspective is, anywhere that you can get competitive interest rates, I think you should look at it. Again like I just mentioned, there’s about four families that are looking at buying homes right now, moving in our practice that come to mind. And as we go through this process we will look at the loans that the mortgage loan officers have put before them and we’ll figure out what their goals are. You know a 30 year mortgage, you’re going to be spending a lot of money on interest over that time period. Especially if you don’t pay it off early.
[00:27:12]Or you make additional payments and you know, aggressive payments on the front end. And so what I say is, if you can find competitive interest rates, and also you wanna certainly do your diligence and shop. Because we’ve seen some things where, hey, you know what i’m not really sure why the mortgage person recommended this particular loan for you. I don’t know if that meets the goals that you’re trying to accomplish. And so look around, shop around for the rates. The other thing is Kevin. He caught my attention when he brought up the scenario of a client moving across the country and they were able to use the relationship with pods to drive value with that client versus an alternative. That was pretty cool, it caught my attention because I would not have thought about that. I’m not into the realtor business or the moving business. That’s not something that I think about, so I was like oh that’s pretty neat. So I think the key take away from here is that if you’re a professional pilot and you plan to buy or sell a home or an investment property in the near future check out Beacon relocations to see how they can help. Now if you’re settled and you’re not thinking about moving anytime soon, good for you. I hate moving, it turns everything upside down for a little while. So just keep that in your back pocket. Keep Beacon Relocations in your back pocket. So when your time comes up to move, you can go check them out. So guys thank you for listening to this episode, thank you Kevin, and thank you Beacon Relocations for your support of Pilot’s Portfolio. This is gonna do it for this one and we’ll see you on the next episode.