6 ms·

The reply was a bit harsh, but let's not act like the real estate industry isn't riddled with skeezy practices. 1) Home inspections that aren't really "inspect

by rplst8 3y ago

The reply was a bit harsh, but let's not act like the real estate industry isn't riddled with skeezy practices. 1) Home inspections that aren't really "inspections" and are just there to grease the skids 2) Buyer's agents don't have a fiduciary duty to protect the buyers. 3) Pricing "knowledge" that is typically public info, just locked behind access restrictions 4) predatory lending practices It's a very incestuous market where the agents are friends with mortgage loan officers at banks, handymen, inspectors, and law offices that handle closing. The fact that it costs somewhere between 10-15% of the value of a home to actually transfer ownership is highway robbery.

onlyrealcuzzo 3y ago
> The reply was a bit harsh, but let's not act like the real estate industry isn't riddled with skeezy practices. Let's not pretend like this doesn't apply to almost every industry either...
- dehrmann 3y ago
  High-value emotional purchases attract it more for obvious reasons. You see it less in cheap commodities. Your transactions at the grocery store tend to be pretty honest.
rcme 3y ago
The seller is paying the buyer's agent so I'm not sure why they'd have a fiduciary duty to the buyer. Agents aren't about representation at all. That's what your lawyer and lender are for (the lender acts in your best interest in their own self interest). The purpose of the agents are to make the transaction happen. The seller's agent handles this on the seller side, e.g. showing the house, making it available for inspections, etc. The buyer's agent makes this happen on the buyer's side, e.g. makes sure the buyer schedules the inspections, has their lender lined up, etc. The agents are there to make the deal happen. That's their only purpose.
- pessimizer 3y ago
  Neither agent has a fiduciary duty even to the person that hired them, in the US. That situation took a lot of lobbying to create, and takes a lot of lobbying to preserve. The agents can make a deal between them that they both profit from and screws both the buyer and the seller.
jon_adler 3y ago
The estate agent percentage in the U.K. is typically around 2% of property value in total, paid by the seller, with virtually nobody using a buyers agent. I have never understood why fees are so crazy in the USA.
- pessimizer 3y ago
  Real estate lobbying associations such as the NAR writing state laws, massively donating to campaigns, and paying huge speaking fees to ex-politicians. I once worked pretty deeply in the industry.
alistairSH 3y ago
Totally agree on the inspection. They're next to useless - a friend bought a home a few years ago, super-weird water heater/HVAC system (co-mingled, WTF), never mentioned by the inspector. When it broke a year later, it was a VERY expensive fix, and I think they might have recovered a few hundred $$ from the inspector (on a many thousands repair). An agent is only getting 5-6% of the home value (assuming no split with a second agent). And a big chunk of that goes to the brokerage.
- Solvency 3y ago
  If their inspector sucks that's on your friend. We searched and vetted and found our own inspector. On Yelp of all places, one of the least trustworthy websites. It took us less than a day to find someone good. And he found absolutely every single imaginable problem even down to the most hysterically unimportant detail. Like the tension on one of the kitchen/garage door hinges being slightly higher than the bottom door hinge. This was on a list of over 100 other things. The point is, inspectors are jobs like anyone else. Some are good, some bad.
  - alistairSH 3y ago
    The problem isn't whether they find a problem. Even the best inspector will miss things occasionally. The problem is they have zero legal liability for that miss. The buyer is making the biggest purchase of their life on a report that cost ~$1000 and has no legal backing (beyond maybe recovering the ~$1000 inspection fee). And then you have home insurance which isn't a whole lot better. They might fix the problem or they might manage to declare is pre-existing and deny coverage, but even if they do fix it, it'll be the lowest bidder installing the cheapest parts possible.
    - PawgerZ 3y ago
      When dealing with Home/Property insurance, always talk to a reputable public adjuster or general contractor. I worked at a general contractor construction company in a state where contractors can also act as public adjusters. We routinely caught insurance adjusters overlooking damage, lying, or straight up committing fraud. The laws for insurance are very complex, and all of the material standards are locked behind paywalls. For an average person (me before I worked there) insurance is basically a black box; you can't argue against any of their points because they hide the criteria. >but even if they do fix it, it'll be the lowest bidder installing the cheapest parts possible. This is true, but illegal. You are owed for "Like Kind And Quality" according to the law. This means that the insurance company can't downgrade your materials, and they have to repair the property to AT LEAST pre-storm conditions. Additionally, it is your legal right to choose a construction crew or contractor of your choice, and the insurance company can't veto your decision. After the work is complete, make sure that you, the construction company, and the insurance company have copies of the specifications of your materials and what work was done. This way it will be much harder for insurance to fuck you over on your next claim. Most contractors in my area are genuinely trying to help the clients. There are some contractors who take advantage of the innocent and gullible population, though. I hate them just as much as insurance companies.
deelowe 3y ago
In my area, agent fees are 6%.
poulsbohemian 3y ago
>Home inspections that aren't really "inspections" and are just there to grease the skids I hear this a lot on here and I wonder what state people are in or if the laws are somehow different elsewhere. In the states where I do business, there are state mandated checklists of systems and inspectors could be held liable if they don’t show reasonable care and professionalism in gathering the data for their report. The inspectors I use pride themselves on the adoption of technology (drones for checking out roofs, thermal imaging for heat loss and insulation, etc) and often take the better part of a day on even small houses. So, I dunno man - I hear this stuff about inspectors a lot, but it doesn’t jive with what I expect the ones I refer to people to actually do.
- hattar 3y ago
  Colorado here and that wasn't the case for me. There were many, and varied things missed in my inspection. The biggest was the entire HVAC system being messed up. The furnace was incorrectly installed, improperly sized for the house, and didn't even have any return ductwork installed. The air flow seemed really bad in the bedroom and so one day I decided to climb up into the attic and take a look. The problem with the return air missing was immediately obvious. When I called the inspector to ask why they'd miss something so obvious I was given an excuse and pointed toward the part of the contract that states they're not liable. I eventually got them to refund the cost of the inspection, but it was hundreds of dollars back for over ten thousand dollars in missed issues. I was only able to get anything because I worked for a real estate company at the time and knew the right people who could apply pressure. IMO Home inspections are a total scam.
  - mike50 3y ago
    Those issues would require engineering judgment to assess. An inspector would be qualified to verify function and presence of the heating system.
    - hattar 3y ago
      That’s actually very close to the excuse they gave! It’s my opinion that if an inspector can’t identify the absence of a critical and primary component of a home, they don’t really provide much value.

by rplst8 3y ago

onlyrealcuzzo 3y ago

> The reply was a bit harsh, but let's not act like the real estate industry isn't riddled with skeezy practices. Let's not pretend like this doesn't apply to almost every industry either...

dehrmann 3y ago
High-value emotional purchases attract it more for obvious reasons. You see it less in cheap commodities. Your transactions at the grocery store tend to be pretty honest.

rcme 3y ago

The seller is paying the buyer's agent so I'm not sure why they'd have a fiduciary duty to the buyer. Agents aren't about representation at all. That's what your lawyer and lender are for (the lender acts in your best interest in their own self interest). The purpose of the agents are to make the transaction happen. The seller's agent handles this on the seller side, e.g. showing the house, making it available for inspections, etc. The buyer's agent makes this happen on the buyer's side, e.g. makes sure the buyer schedules the inspections, has their lender lined up, etc. The agents are there to make the deal happen. That's their only purpose.

pessimizer 3y ago
Neither agent has a fiduciary duty even to the person that hired them, in the US. That situation took a lot of lobbying to create, and takes a lot of lobbying to preserve. The agents can make a deal between them that they both profit from and screws both the buyer and the seller.

jon_adler 3y ago

The estate agent percentage in the U.K. is typically around 2% of property value in total, paid by the seller, with virtually nobody using a buyers agent. I have never understood why fees are so crazy in the USA.

pessimizer 3y ago
Real estate lobbying associations such as the NAR writing state laws, massively donating to campaigns, and paying huge speaking fees to ex-politicians. I once worked pretty deeply in the industry.

alistairSH 3y ago

Totally agree on the inspection. They're next to useless - a friend bought a home a few years ago, super-weird water heater/HVAC system (co-mingled, WTF), never mentioned by the inspector. When it broke a year later, it was a VERY expensive fix, and I think they might have recovered a few hundred $$ from the inspector (on a many thousands repair). An agent is only getting 5-6% of the home value (assuming no split with a second agent). And a big chunk of that goes to the brokerage.

Solvency 3y ago
If their inspector sucks that's on your friend. We searched and vetted and found our own inspector. On Yelp of all places, one of the least trustworthy websites. It took us less than a day to find someone good. And he found absolutely every single imaginable problem even down to the most hysterically unimportant detail. Like the tension on one of the kitchen/garage door hinges being slightly higher than the bottom door hinge. This was on a list of over 100 other things. The point is, inspectors are jobs like anyone else. Some are good, some bad.
- alistairSH 3y ago
  The problem isn't whether they find a problem. Even the best inspector will miss things occasionally. The problem is they have zero legal liability for that miss. The buyer is making the biggest purchase of their life on a report that cost ~$1000 and has no legal backing (beyond maybe recovering the ~$1000 inspection fee). And then you have home insurance which isn't a whole lot better. They might fix the problem or they might manage to declare is pre-existing and deny coverage, but even if they do fix it, it'll be the lowest bidder installing the cheapest parts possible.
  - PawgerZ 3y ago
    When dealing with Home/Property insurance, always talk to a reputable public adjuster or general contractor. I worked at a general contractor construction company in a state where contractors can also act as public adjusters. We routinely caught insurance adjusters overlooking damage, lying, or straight up committing fraud. The laws for insurance are very complex, and all of the material standards are locked behind paywalls. For an average person (me before I worked there) insurance is basically a black box; you can't argue against any of their points because they hide the criteria. >but even if they do fix it, it'll be the lowest bidder installing the cheapest parts possible. This is true, but illegal. You are owed for "Like Kind And Quality" according to the law. This means that the insurance company can't downgrade your materials, and they have to repair the property to AT LEAST pre-storm conditions. Additionally, it is your legal right to choose a construction crew or contractor of your choice, and the insurance company can't veto your decision. After the work is complete, make sure that you, the construction company, and the insurance company have copies of the specifications of your materials and what work was done. This way it will be much harder for insurance to fuck you over on your next claim. Most contractors in my area are genuinely trying to help the clients. There are some contractors who take advantage of the innocent and gullible population, though. I hate them just as much as insurance companies.

deelowe 3y ago

In my area, agent fees are 6%.

poulsbohemian 3y ago

>Home inspections that aren't really "inspections" and are just there to grease the skids I hear this a lot on here and I wonder what state people are in or if the laws are somehow different elsewhere. In the states where I do business, there are state mandated checklists of systems and inspectors could be held liable if they don’t show reasonable care and professionalism in gathering the data for their report. The inspectors I use pride themselves on the adoption of technology (drones for checking out roofs, thermal imaging for heat loss and insulation, etc) and often take the better part of a day on even small houses. So, I dunno man - I hear this stuff about inspectors a lot, but it doesn’t jive with what I expect the ones I refer to people to actually do.

hattar 3y ago
Colorado here and that wasn't the case for me. There were many, and varied things missed in my inspection. The biggest was the entire HVAC system being messed up. The furnace was incorrectly installed, improperly sized for the house, and didn't even have any return ductwork installed. The air flow seemed really bad in the bedroom and so one day I decided to climb up into the attic and take a look. The problem with the return air missing was immediately obvious. When I called the inspector to ask why they'd miss something so obvious I was given an excuse and pointed toward the part of the contract that states they're not liable. I eventually got them to refund the cost of the inspection, but it was hundreds of dollars back for over ten thousand dollars in missed issues. I was only able to get anything because I worked for a real estate company at the time and knew the right people who could apply pressure. IMO Home inspections are a total scam.
- mike50 3y ago
  Those issues would require engineering judgment to assess. An inspector would be qualified to verify function and presence of the heating system.
  - hattar 3y ago
    That’s actually very close to the excuse they gave! It’s my opinion that if an inspector can’t identify the absence of a critical and primary component of a home, they don’t really provide much value.