By RYAN TAYLOR

Friends are people you can trust. They will come pick you up when your car breaks down. They are there to pick you up when you are down and there to celebrate when something goes right. Friends are the most valuable thing you have.

Friends do not try to hurt, deceive or manipulate you. (Bernie Madoff is not your friend).

If you bought a house in 2008, most likely your Realtor is not your friend. Almost every single person who bought a house in 2008 now owns an asset that is worth less than what they paid.

Did your Realtor at least tell you that you were making a poor short-term financial decision? Probably not, because he or she is not obligated to do so.

Realtors are not motivated to help make you a good financial decision; they are motivated to create a transaction and earn fees. If President Obama is outraged over Wall Street compensation packages then you should be outraged over Realtor commissions.

And while Wall Street may not have much of a choice about their bonuses for the foreseeable future, there is something you can do as a potential home buyer to protect yourself from making a big mistake when making the biggest purchase of your life.

Ask the right questions and demand the right answers.

Here a few questions you should ask your Realtor and the answers that are adequate and answers that are concerning:

With economic conditions continuing to deteriorate, why do you think this is the right time to buy, as opposed to 6 months from now?

Wrong Answer: Interest rates are at historical lows and sales are up, so we are near the bottom of the market.

Right Answer: Property values are not likely to rise in the next six months and in most cases it is not worth the risk to buy a house now as opposed to six months from now. However, if you have been waiting for this particular house to come on the market for a few months because it is in a well-maintained neighborhood with good schools and an abnormally large lot, it may be a good time to make an offer that fits comfortably within your budget.

What is the value trend over the last three months for properties like the one I am looking at?

Wrong Answer: Sales are up more than 100% year over year. With the increased demand, values are going to be on the rise or are already on the rise.

Right Answer: Allow me to find you 3 comparable sales from the last two months that will show you the current market trend. In addition, I will find you three comparable listings that also give you an indication of what others are asking for. Please realize that listings are very negotiable and so do not necessarily represent the value of the homes they are attached to.

When you are prospecting for homes you want to show me, how do you determine what to show me and what not to show me?

Wrong Answer: I only look for properties that have been listed within the last 30 days. Anything that has been on the market for more than 30 days must have some problem that makes it very undesirable. I also do not look for REOs as they have been neglected and are frequently sold “as-is”.

Right Answer: I apply the criteria you provided me and look at everything that is listed in the school district and city you are interested in. Personally, I like to show some homes that have been listed for a while because I know they are not generating as much interest as some of the new properties. This way we can avoid bidding wars and potentially find a truly motivated seller.

In addition, I enjoy showing REOs because I know banks continue to be strapped for cash and they are willing to negotiate over everything from closing cost incentives to repairs. Finally, I do show short sales but I realize that most end up becoming REO properties, and you as a buyer will most likely get a better deal on a home when it is REO rather than a short sale.

Please provide me with a few closings you are most proud of over the last year that you believe were really good deals for the buyers?

Wrong Answer: I got a great deal for a couple in October where they got a $5,000 closing cost credit. I also helped one of my friends get a home that they bought for $35,000 below list.

Right Answer: There are a few deals I am proud of and I will put together a report for you detailing the price the buyer paid, the closing cost incentives granted by the seller and what their home is worth now. Furthermore, I will have an independent valuation firm run values on these homes so you know you can have an unbiased opinion of value.

If you receive the right answer on your questions, you may just have a friend in the real estate business.

This post first appeared on Minyanville.

That glitzy McMansion you’ve always wanted may finally be within reach.

Or not.

If nearly 3 years of home price declines, historically low interest rates and a relentless media barrage of half-truths from the National Association of Realtors haven’t been able to stabilize home prices, it’s doubtful a gimmicky used-car-style sales event will do the trick.

Coldwell Banker, one of the nation’s largest real-estate brokerages, launched a nationwide campaign last Friday to boost the flagging housing market. The 10-day sales event aims to close the gap between buyers and sellers by offering up to a 10% discount on listed homes for, you guessed it, 10 days.

This selling bonanza was hatched in response to a recent survey of over 3000 of the firm’s real estate agents, which found that a majority feel listing prices are too high to attract buyers. The survey also showed almost 80% of the agents believe more appropriately priced homes are garnering more attention; apparently, you need a license to know people like to pay less for a house, not more.

Coldwell Banker’s president and CEO, Jim Gillespie, is confident the housing market may finally be nearing a bottom. He told our friends at Marketwatch: “Despite the difficult headlines regarding our overall economy, the residential real estate market has been showing several positive signs over recent months that could be signaling a tipping point.”

It’s unclear whether continuing price declines, historically high levels of inventory, tightening lending requirements or frozen credit markets are the “positive signs” he’s referring to.

Gillespie also believes the unprecedented sales event will encourage buyers to jump back into the market: “Because of higher inventory, buyers have more homes to choose from and they can take advantage of near historically low interest rates and affordability levels that are the best they have been in years.”

Yes, affordability levels are the best they have been in years: Much better than when the only way to get into a house was to lie about your income and take out an Option ARM with a 1% teaser rate.

About this time last year, homebuilder Hovnanian (HOV) tried a nationwide fire sale to flush out its bloated inventory. More recently, Lennar (LEN), Centex (CTX), and DR Horton (DHI) tried a similar approach with both land and homes – to no avail. The fundamental forces pushing housing prices down will persist, regardless of futile ploys aimed at tricking buyers into paying more than they should for homes.

To be clear: Being negative on the housing market isn’t exactly a contrarian position. Therefore, anyone claiming it’s a great time to buy – like Coldwell Banker and tens of thousands of real estate professionals around the country — clearly have their own reasons for doing so.

Real estate agents get paid to close transactions; whether their client receives (or pays) a fair price is a non-issue.

Commission expenses are borne by sellers, typically to the tune of 6% of the sale price. In California, where the median home price is still over $350,000, that’s $20,000 out of the pocket of someone who’s already seen his home’s value evaporate before his eyes.

The selling agent usually splits the commission with the buyer’s agent, a pay structure that gives both sides an incentive to not only focus exclusively on closing deals, but also to sell homes for as much as possible.

Coldwell Banker correctly asserts that many sellers have unrealistic expectations about their homes’ final selling price, and as a result keep asking for prices too high for too long. Their cute little sales event, however, is aimed more at earning commissions for their struggling agents than advancing true price discovery in the troubled housing market. If the firm truly had the best interests of homeowners in mind, agents would volunteer to take a pay cut to ease their troubled clients’ burden.

Gillespie, Coldwell’s CEO, claims the event will “help move the US real estate market in the right direction.” He’s right – home prices must continue to fall. Simple economics, the interplay between supply and demand, is driving most markets, as tens of homes sit on the market for every one qualified buyer. Until this overhead supply is worked through, prices will remain under pressure.

In some of the most depressed areas – Las Vegas, the California Central Valley, Florida and Phoenix – homes have reached or surpassed traditional levels of affordability. Unfortunately, there’s more to buying a home than just being able to make the monthly payments. With down payment requirements returning to pre-bubble levels, low interest rates are almost a moot point.

There just isn’t any economic rationale for buying if home values keep sliding.

Even if a borrower can afford the monthly payments, home price declines wipe out the tax benefits of writing off mortgage payments and risk putting the new homeowner in the paralyzing position of owing more than his home is worth. Buying a home today is almost like buying a new car: You’re upside-down as soon as you’re handed the keys.

Until there’s real, verifiable evidence that home prices have stabilized, buying a home remains a dangerous financial proposition. This is true in every market, not just the ones that make the headlines for mind-boggling foreclosure rates.

Renting is still the far more fiscally responsible option. Staring into the teeth of a recession, families should be making choices in the best interest of their financial security, not for bragging rights at cocktail parties.