A good realtor can guide you through the market, inspections, and negotiation - all of which hugely affect the largest investment most people make. But that's no reason for them to demand a PERCENTAGE off the sale of the home!
Closing fees plus realtor fees are a big reason why it takes so long for a home to break even for most people - something like 7 years in NYC. And one reason why there's so much pressure for home prices to keep going up. The cost of selling a home and buying another one also makes the labor market less dynamic - people find it harder to move to where there's better opportunities.
I read the article, but I still don't understand how the National Association of Retailers enforce the 5-6% total commission. Does anyone know? The incidence question (is the fee "paid" by the buyer or seller) is a semantic one, but if the cartel is able to inflate the total fees, that's something else entirely.
It's mostly due to the fact that in order to list a house or find a house you need to use a system called MLS. In order to use the system you need to be a realtor. It's quite simple actually
Of all the scams associated with real estate transactions, title insurance is kind of legitimate. The title chain itself may be recorded, but there may be some lien against the property that was not properly recorded. That’s the situation you protecting against.
I read the article, but I still don't understand how the National Association of Retailers enforce the 5-6% total commission. Does anyone know? The incidence question (is the fee "paid" by the buyer or seller) is a semantic one, but if the cartel is able to inflate the total fees, that's something else entirely.
It's mostly due to the fact that in order to list a house or find a house you need to use a system called MLS. In order to use the system you need to be a realtor. It's quite simple actually
Technically, you don’t need to use MLS.
You can put your house up on Craigslist, Facebook marketplace, make your own website, put a sign on your front lawn, etc.
But most people predict they will earn per time they invest in selling by going with MLS, where the home buying audience is largest.
Real estate sales is an industry rife with anti-competitive and corrupt practices. Appraisals, home inspections, lending, and sales are all in it together on this. I absolutely loathe them.
Home inspections aren't compulsory are they? I thought that they weren't even required by lenders. Of all the things listed they sure seem like real value to the buyer.
If you're not borrowing to purchase a home you probably wouldn't need an appraisal. I think lenders just want objective evaluation of the collateral. Who can blame them?
I read the article, but I still don't understand how the National Association of Retailers enforce the 5-6% total commission. Does anyone know? The incidence question (is the fee "paid" by the buyer or seller) is a semantic one, but if the cartel is able to inflate the total fees, that's something else entirely.
It's mostly due to the fact that in order to list a house or find a house you need to use a system called MLS. In order to use the system you need to be a realtor. It's quite simple actually
But what's preventing realtors from defecting and offering their services for a lower rate?
A good realtor can guide you through the market, inspections, and negotiation - all of which hugely affect the largest investment most people make. But that's no reason for them to demand a PERCENTAGE off the sale of the home! Closing fees plus realtor fees are a big reason why it takes so long for a home to break even for most people - something like 7 years in NYC. And one reason why there's so much pressure for ho…
> A good realtor can guide you through the market
Sure they can, but the entire incentive structure creates a situation where it's in the agent's best interest to get the sale done regardless or the outcome to the buyer/seller.
I find that it's very similar to mob tactics. Prospective homeowners just get passed and funneled from person to person that they effectively have no choice but to interact with. And each of those people take a piece of the pie.
And there are a lot of fear tactics used as well. Or FUD, at least. "Don't skip the inspection, what if something is wrong" sounds sensible but pre-purchase home inspections are quite surface level, will only find visible, obvious problems, and in the fine print they disclaim responsibility if they miss anything.
I mean yea, but also not yea.
It's definitely you get what you pay for. If you have a good home inspector they may be able to tell you something like "Yea, the roof is fucked", or "That crack you didn't notice in the foundation is really bad news".
I don't build homes nor do I troubleshoot them on a daily basis. Someone that does, and has a at least a modicum of experience will still notice more than I.
It's mostly due to the fact that in order to list a house or find a house you need to use a system called MLS. In order to use the system you need to be a realtor. It's quite simple actually
But what's preventing realtors from defecting and offering their services for a lower rate?
The other agent won't bring clients to you if the cut is too low.
I find that it's very similar to mob tactics. Prospective homeowners just get passed and funneled from person to person that they effectively have no choice but to interact with. And each of those people take a piece of the pie.
And there are a lot of fear tactics used as well. Or FUD, at least. "Don't skip the inspection, what if something is wrong" sounds sensible but pre-purchase home inspections are quite surface level, will only find visible, obvious problems, and in the fine print they disclaim responsibility if they miss anything.
In my area, you won't get an offer accepted if you don't waive the home inspection. In fact, it's basically required to waive all inspections, such as radon and others. So the state says you have a so-called right to these, which divests the state from liability, but on a practical level, you need to waive these. Buyers end up having to buy ~$1M homes based upon just looking at them once or twice over just a couple of hours with basically no history given at all. It's such a messed up process. I get to do more due diligence buying something off of Reverb or eBay than I did with our home. And as you say, all of the people you're forced to interact with force you to sign papers that says that they have no responsibility for anything whatsoever.