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We sent in an offer of $460,000 and one day later got our answer: the sellers accepted. The better way to think about the injustice of this story is to realize

We sent in an offer of $460,000 and one day later got our answer: the sellers accepted. The better way to think about the injustice of this story is to realize that his Realtor & Co. earned at least $27,600 (Six percent of the $460,000) for less than a day's worth of work. Bob called back the next morning. “Your credit scores are almost perfect,” he said happily. “Based on your income, you can qualify for a mortgage of about $500,000.” Translation as to what Bob was really thinking: "Based on your credit score, I can earn about $30,000 today, without blinking." Realtors are the evil behind the mortgage meltdown. If this article doesn't make it obvious, I don't know what does.

Chocobean 17y ago
They do provide valid services though: driving you and your family to and from many showings, talking to the owner/owner's Realtor, take care of the legal mumble jumble, provide info on the house's previous owner records, previous sale pries, insight into school districts, commute hours, community by-laws..etc. House-hunting is certainly NOT less than a day's worth of work. If they end up not buying from him, all this time spent on working their profile earns him exactly $0. The goods that he sells are his time: time that he can't spend with another customer simultaneously. Bob was an evil realtor; evil [profession] are evil. That's all.
MaysonL 17y ago
Bob wasn't his real estate agent, he was his mortgage broker. (He may well have made 30K off the deals, though, anyway).
Empact 17y ago
If this bothers you (it does me), you should look at Redfin.com. They do realty for 1% each, rather than 3%, and can afford to because they do much of their work online.
HSO 17y ago
"for less than a day's worth of work" Look, if Google earns x cents on a click from you, does it earn it on "less than a second's work"? It does not, because someone had to take the risk to acquire the necessary skills and contacts/reputation over a long period of time, had to set up an office and legal forms, had to acquire a rolodex, etc etc. There is a lot of risk involved. THe fact that the transaction itself, if sufficiently isolated, takes place in a blink so much as doesn't matter! In fact, our system works such that people are not paid based on their (highly subjective) work effort but on result. Result in terms of what other people are willing to pay for your services. If you go down the slippery slope of "fairness" in pay based on effort, you will end up in pure, almost literal communism -- everything owned by the community, nothing for yourself, because there is no basis for judging effort from outside. Effort doesn't count, results do.
- indiejade 17y ago
  This is not sound logic. Did you get everybody in your real estate office to sign up for a YCNews account and upvote this comment? The mortgage problem is resultant, largely, because of lack of information between buyers and sellers. Note that I didn't say lack of information between a homebuyer's Realtor and the seller's broker. In economics, we learn about the concepts of buyer's surplus and seller's surplus. In real estate, there is this third entity (usually colluding brokers, agents, etc.) eating away, often entirely consuming all potential surplus. Why else would this mortgage meltdown have happened? People make decisions based on information presented to them. Mortgage brokers and their Realtor friends go out of their way to throw up as many brick walls and make the process as overwhelming and confusing as possible. If you're a Realtor, you surely are aware of the antitrust case against the National Association of Realtors: http://www.usdoj.gov/atr/cases/nar.htm/ http://www.usdoj.gov/atr/cases/nar.htm/ Home buyers are usually required to sign STACKS of papers during closing. During this process, they rarely notice that one most important to the Realtor & Co which is the one they slip in there that states the "percent" that the Realtors are making and the "percent" that the brokers are making in the deal; this number is NOT mandated by any laws, but Realtors and Co. always give homebuyers the impression that it is; after all, all the other papers they're signing are supposed to be for their "protection". After all who would hire a Realtor who didn't claim to "be working for you"? They talk dollars when it comes to house prices and percents when it comes to what they're making in the deal. This is evil, deceptive practice and it should be illegal. I think most rational people would think twice about taking out a loan to pay five or six figures to somebody who calls shuttling around in an SUV and counting their riches "work". I'm not even remotely "communist" as you seem to be implying; I simply think that this "rolodex" argument you're making is beyond outdated in the 21st Century. After all, your risk-reward argument only makes sense if there's competition. And if you'll look over the DOJ case I linked to above, you will see that the National Association of Realtors does everything in its power to restrain competition. Need more evidence? Watch the video: http://themermaidtavern.blogspot.com/2009/02/realtors-are-evil.html http://themermaidtavern.blogspot.com/2009/02/realtors-are-ev...
  - HSO 17y ago
    Your suggestion is off base. As for the rest of your comment, please read my comment again. It says nothing about realtors about whom I know too little to say much. It is concerned with the meme that people seem to earn money "on a day's worth of work". I think it is in the same category as that investors earn money only by "skimming off" other people's "productive work". The transaction is only one moment in a long chain of preparation and risk. Whether it takes place over a second or a month does not matter. To make another outdated reference to the last century, Michael Jordan didn't earn his millions by winning this or that particular game for his team. It was years and years of preparation and taking the risk of ending up like the other 99.99 percent of ballplayers, i.e. with little money to show for his efforts. The only job I can immediately think of which could fit the description of lots of money for very little work is that of Jamal's contestant in Slumdog Millionaire ;) And even there you can argue it is a long chain and that the money is earned through attracting the attention of many people.

Chocobean 17y ago

They do provide valid services though: driving you and your family to and from many showings, talking to the owner/owner's Realtor, take care of the legal mumble jumble, provide info on the house's previous owner records, previous sale pries, insight into school districts, commute hours, community by-laws..etc. House-hunting is certainly NOT less than a day's worth of work. If they end up not buying from him, all this time spent on working their profile earns him exactly $0. The goods that he sells are his time: time that he can't spend with another customer simultaneously. Bob was an evil realtor; evil [profession] are evil. That's all.

MaysonL 17y ago

Bob wasn't his real estate agent, he was his mortgage broker. (He may well have made 30K off the deals, though, anyway).

Empact 17y ago

If this bothers you (it does me), you should look at Redfin.com. They do realty for 1% each, rather than 3%, and can afford to because they do much of their work online.

HSO 17y ago

"for less than a day's worth of work" Look, if Google earns x cents on a click from you, does it earn it on "less than a second's work"? It does not, because someone had to take the risk to acquire the necessary skills and contacts/reputation over a long period of time, had to set up an office and legal forms, had to acquire a rolodex, etc etc. There is a lot of risk involved. THe fact that the transaction itself, if sufficiently isolated, takes place in a blink so much as doesn't matter! In fact, our system works such that people are not paid based on their (highly subjective) work effort but on result. Result in terms of what other people are willing to pay for your services. If you go down the slippery slope of "fairness" in pay based on effort, you will end up in pure, almost literal communism -- everything owned by the community, nothing for yourself, because there is no basis for judging effort from outside. Effort doesn't count, results do.

indiejade 17y ago
This is not sound logic. Did you get everybody in your real estate office to sign up for a YCNews account and upvote this comment? The mortgage problem is resultant, largely, because of lack of information between buyers and sellers. Note that I didn't say lack of information between a homebuyer's Realtor and the seller's broker. In economics, we learn about the concepts of buyer's surplus and seller's surplus. In real estate, there is this third entity (usually colluding brokers, agents, etc.) eating away, often entirely consuming all potential surplus. Why else would this mortgage meltdown have happened? People make decisions based on information presented to them. Mortgage brokers and their Realtor friends go out of their way to throw up as many brick walls and make the process as overwhelming and confusing as possible. If you're a Realtor, you surely are aware of the antitrust case against the National Association of Realtors: http://www.usdoj.gov/atr/cases/nar.htm/ http://www.usdoj.gov/atr/cases/nar.htm/ Home buyers are usually required to sign STACKS of papers during closing. During this process, they rarely notice that one most important to the Realtor & Co which is the one they slip in there that states the "percent" that the Realtors are making and the "percent" that the brokers are making in the deal; this number is NOT mandated by any laws, but Realtors and Co. always give homebuyers the impression that it is; after all, all the other papers they're signing are supposed to be for their "protection". After all who would hire a Realtor who didn't claim to "be working for you"? They talk dollars when it comes to house prices and percents when it comes to what they're making in the deal. This is evil, deceptive practice and it should be illegal. I think most rational people would think twice about taking out a loan to pay five or six figures to somebody who calls shuttling around in an SUV and counting their riches "work". I'm not even remotely "communist" as you seem to be implying; I simply think that this "rolodex" argument you're making is beyond outdated in the 21st Century. After all, your risk-reward argument only makes sense if there's competition. And if you'll look over the DOJ case I linked to above, you will see that the National Association of Realtors does everything in its power to restrain competition. Need more evidence? Watch the video: http://themermaidtavern.blogspot.com/2009/02/realtors-are-evil.html http://themermaidtavern.blogspot.com/2009/02/realtors-are-ev...
- HSO 17y ago
  Your suggestion is off base. As for the rest of your comment, please read my comment again. It says nothing about realtors about whom I know too little to say much. It is concerned with the meme that people seem to earn money "on a day's worth of work". I think it is in the same category as that investors earn money only by "skimming off" other people's "productive work". The transaction is only one moment in a long chain of preparation and risk. Whether it takes place over a second or a month does not matter. To make another outdated reference to the last century, Michael Jordan didn't earn his millions by winning this or that particular game for his team. It was years and years of preparation and taking the risk of ending up like the other 99.99 percent of ballplayers, i.e. with little money to show for his efforts. The only job I can immediately think of which could fit the description of lots of money for very little work is that of Jamal's contestant in Slumdog Millionaire ;) And even there you can argue it is a long chain and that the money is earned through attracting the attention of many people.