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Middle men generally have negative impacts on society overall once they become entrenched. Their role becomes less service provider/facilitator and more parasit

Middle men generally have negative impacts on society overall once they become entrenched. Their role becomes less service provider/facilitator and more parasitic. What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents? (I ask as a mid 20s engineer who is probably never going to own a home)

AussieWog93 5y ago
>What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents? Because a slight miscalculation in value, lack of market insights or poor salesmanship can lead to tens of thousands of dollars left on the table by the seller.
- vsskanth 5y ago
  Yeah, no. In countries like India you don't use agents to buy or sell property and the free market finds value just fine. That's just one example I'm familiar with and it was pre internet.
  - rayrey 5y ago
    America, home of the parasitic middleman. Let’s talk about title insurance and auto dealers too.
dredmorbius 5y ago
There are benefits and risks to intermediaries. A chief problem with technically-mediated intermediaries is that rather than buyers and sellers being directly connected, they are connected through yet another, larger-scale intermediary. Amazon, eBay, and Alibaba are three such instances, and each has its own motivations and opportunities to distort markets. Regulations, preventing the same intermediary from playing both sides of the transaction (in a pass-through mode, apparently, in the flipping case), fiduciary obligations, and of course, reporting, enforcement, penalties, and decertification for violations, are all highly useful steps.
mooreds 5y ago
> Middle men generally have negative impacts on society overall once they become entrenched. This book covers some very valuable roles middlemen play: https://link.springer.com/book/10.1007/978-1-137-53020-2 https://link.springer.com/book/10.1007/978-1-137-53020-2 > What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents? I wrote about this 8 years ago (was employed as a software engineer at a real estate brokerage at the time): "I think that there are lots of marketplaces have sprung up via the internet, but as far as I know, the significant ones all offer products that have one of these characteristics: * the consumer buys them often [for some definition of often] (airplane tickets) * the product is fungible (books, cars) * the product is relatively cheap (stuff sold on ebay, amazon) All of these characteristics lower the risk of purchase. Housing has none of these characteristics. And I don't know how it could, short of a real manufacturing revolution or more houses built out of shipping containers." https://news.ycombinator.com/item?id=5539026 https://news.ycombinator.com/item?id=5539026

AussieWog93 5y ago

>What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents? Because a slight miscalculation in value, lack of market insights or poor salesmanship can lead to tens of thousands of dollars left on the table by the seller.

vsskanth 5y ago
Yeah, no. In countries like India you don't use agents to buy or sell property and the free market finds value just fine. That's just one example I'm familiar with and it was pre internet.
- rayrey 5y ago
  America, home of the parasitic middleman. Let’s talk about title insurance and auto dealers too.

dredmorbius 5y ago

There are benefits and risks to intermediaries. A chief problem with technically-mediated intermediaries is that rather than buyers and sellers being directly connected, they are connected through yet another, larger-scale intermediary. Amazon, eBay, and Alibaba are three such instances, and each has its own motivations and opportunities to distort markets. Regulations, preventing the same intermediary from playing both sides of the transaction (in a pass-through mode, apparently, in the flipping case), fiduciary obligations, and of course, reporting, enforcement, penalties, and decertification for violations, are all highly useful steps.

mooreds 5y ago

> Middle men generally have negative impacts on society overall once they become entrenched. This book covers some very valuable roles middlemen play: https://link.springer.com/book/10.1007/978-1-137-53020-2 https://link.springer.com/book/10.1007/978-1-137-53020-2 > What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents? I wrote about this 8 years ago (was employed as a software engineer at a real estate brokerage at the time): "I think that there are lots of marketplaces have sprung up via the internet, but as far as I know, the significant ones all offer products that have one of these characteristics: * the consumer buys them often [for some definition of often] (airplane tickets) * the product is fungible (books, cars) * the product is relatively cheap (stuff sold on ebay, amazon) All of these characteristics lower the risk of purchase. Housing has none of these characteristics. And I don't know how it could, short of a real manufacturing revolution or more houses built out of shipping containers." https://news.ycombinator.com/item?id=5539026 https://news.ycombinator.com/item?id=5539026