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Why do realtors try to claim 6% ownership to all property in the U.S.?
2012 Jun 6, 1:09pm 57,210 views 114 comments
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investor90
@
2012 Jun 12, 3:25pm
Everyone knows that. We need an encore. How about encouraging them to sky dive without a parachute. Geronimo!
As a counterpoint to all this animosity towards real estate agents....
After 9+ years, we're buying again. While I think there is a good slide in prices to come, we simply waited thru enough of the zaniness and back on the other side now. We have good income and FICO...we have been quite purposefully renting and are now on our 3rd house. The current owner of this house is getting re-married and will move back here - so our choices were to look for another rental (rents up about 10% the past couple years here in San Fran area) or buy.
We judged the least of our pain to be buying right now (we had a HORRIBLE landlord for the first 5 of those rental years). Tho prices haven't dropped quite as much as hoped (maybe 20% around here from peak), but the 3% mortgage rates today are simply helping the monthly nut a lot.
Anyhow, we had some complex last contingencies to drop before the house transaction moves forward (based on appraisal, pest and home inspection done last week). Our agent, a totally buttoned up lady down the street, has been available via email and phone every single day for a week to discuss these issues and sort them thru. She set up the Pest and Home Inspectors - and they were both total pros. She set us up with an insurance agent - and that ins agent beat the pasts off AAA and GEICO (both of whom I contacted) in price for homeowners.
Further, both last nite and the nite before we had thorny issues to overcome with the sellers and we had conversations about it at 10PM.
Truly, this lady gets the bronze start for efforts and is earning every bit of the 1.5-2.0% she gets from this transaction from the sellers (no agent makes 3%; that's generally shared with the agency). She's every bit as good as she advertised herself to be to us.
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If competition could be restored to the home buying process, transaction costs could be greatly reduced which would connect more buyers and sellers with deals. This claim to 6% ownership of all real-estate causes the market to be sticky, fewer transactions occur as a result. More sales would occur if there wasn’t a 6% barrier between the seller and the buyer, and the purchase price would be lower for the buyer as well.
The housing market would recover faster if home deals could omit this expensive middle man. People should not revert to realty offices when thinking of buying or selling homes. Individuals need to default to internet sites like Zillow.com or other housing sites in order to reduce the market collusion from realtors. The internet is a great device for competition! Now people need to realize that websites can be used to organize home buyers and sellers just like Amazon, Craigslist, or Ebay, without the expensive middleman.
Many people argue that buyers do not pay the fees to the realtor so they should not care if the realtor gets paid. Well due to the fungibility of money, the buyer could have bought the house for 94% of what they paid because that is what the seller was willing to accept for the house. This makes it obvious to see that the seller nominally pays for the realtor fees, but the buyer, in real terms, pays about 6% too much for the home. Not realizing that a realtor’s 6% could be negotiated is a flaw that must not be overlooked.
#housing