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Folks here should check out http://patrick.net/ http://patrick.net/, run by a SF bay area programmer, for an opposing view on the necessity and desirability of

by declan 12y ago

Folks here should check out http://patrick.net/ http://patrick.net/, run by a SF bay area programmer, for an opposing view on the necessity and desirability of Realtors(tm). In terms of the MLS, at least in California, which has the largest one, it's run by Realtors(tm) for Realtors(tm). The board members are Realtors(tm); so are the "34 REALTOR® Associations" that are the MLS's customers. You can see crmls.org for more details. In terms of attorneys, at least you can pay them by the hour. In the SF bay area, where house prices can be 10x-15x the national average, why should a Realtor(tm) be paid 10x-15x as much for doing approximately the same amount of work? Haircuts, which require approximately as much skill on the part of the service provider, don't cost 15x as much here. Also the more you spend, the more the Realtor(tm) gets paid; this precisely misaligns incentives. Attorneys also have a far higher degree of legal obligation to you than a Realtor(tm) does. Check out the standard real estate contract, which is designed primarily to eliminate any legal responsibility on the part of the Realtor(tm), and only secondarily to conduct the actual house transaction. Also it's rather silly to compare the amount of knowledge required to represent someone in court vs. show a house. To be a real estate agent in California, you have to spend 18 days taking three simultaneous correspondence courses. One of which can be "Computer Applications in Real Estate," which will teach you such difficult-to-master skills as "setting up e-mails," "using digital cameras," and "designing a power point presentation." Tests are T/F and multiple choice. I am not making this up: http://www.accreditedcareers.com/ca_info.pdf http://www.accreditedcareers.com/ca_info.pdf Here's part of Assignment #1 (representing almost 10% of your final grade!): 1. Search Online for 5 Internet Service Providers and make a list with the URL next to the ISP name and list the price of each. 2. Search Online and find 5 different Online Vendors of computer hardware and make a list with the URL next to the Vendors name. 3. Search Online and find 5 Computer Software Vendors and make a list with the URL next to the Vendors name. 4. Using your URL go to http://www.dre.ca.gov http://www.dre.ca.gov find the latest Real Estate bulletin and just send the URL address to the bulletin on the list. 5. Download Yahoo Messenger and Install program. Using Yahoo Messenger Application set up a username and messenger account and send a request to ca_ares_course@yahoo.com to join your buddies. (this will also allow chat to the instructor) It's true that Realtors(tm) can provide some value, for instance when they have deep knowledge of the local area. But whenever I've spoken at Realtor(tm) conferences -- a few times at Inman Connect in SF -- I've outraged the audience by telling them they'll be disintermediated as surely as their travel agent brethren, and describing how it will happen. My only regret is that it's taking so long. If anyone is working on a startup to dislodge the Realtor(tm) effective monopoly[1], let me know. [1] The DOJ sued the National Association of Realtors(tm) in 2005 for antitrust violations during the antitrust-averse Bush administration. Unfortunately the case was settled in 2008: http://www.nytimes.com/2008/05/28/business/28realty.html?_r=0 http://www.nytimes.com/2008/05/28/business/28realty.html?_r=...

burntsushi 12y ago
I really liked your comment. It's insightful and provided a perspective I hadn't really heard before. This is important, because I'm gearing up to buy my first house in about 2 years or so. The thought of working with a realtor has been somewhat terrifying, if only because I believe competence is rare generally. And the incentive inverse has always been a bit of a put off too. I've certainly considered the possibility of going without a realtor when the time comes, but multiple people whose opinion I respect have claimed that a realtor was worth it. So your comment piqued my interest. In search of more information, I decided to check out patrick.net. Umm. What? Here's what I see: * Money is a form of social control and most Americans are debt slaves * Midieval spikes thwart London homeless from sleeping in apartment doorways * Michael Moore in cat fight with wife over divorce settlement * Photo of US at Night * "Go and rape women" Why do we just stand by? * God bless the free market! * ... I mean, really? I understand that this is probably some dynamically generated list of hot threads from a message board, but if your goal is to convince someone that maybe realtors aren't necessary (a pretty mind-bending claim for most people, I imagine), then you have provided a source that inspires exactly zero credibility. I'd suggest you stop linking people to it. I had expected to see some material on how one would achieve tasks that a realtor would normally perform for you. I can at least understand how this open data stuff would help replace the realtor's job of finding houses for you, but what about all the legal mumbo jumbo? I know almost nothing about it, but I know it exists. So how would I tackle it? Is there anything else that a realtor generally does that I'll have to do myself?
- huherto 12y ago
  I also got lost on the site. But this article is really good. http://patrick.net/housing/crash1.html http://patrick.net/housing/crash1.html
- declan 12y ago
  These are fair points. I've met Patrick in person and used to follow patrick.net a while ago (>4 years ago), but the discussion threads appear to have gone downhill a bit. But as someone else pointed out, there are some FAQs there that provide a useful counter to the conventional wisdom. Also it looks like Patrick now has a book out you can buy on Amazon.com: http://www.amazon.com/Housing-Trap-Buyers-Captured-Yourself/dp/1479156213/?tag=patricknet-20 http://www.amazon.com/Housing-Trap-Buyers-Captured-Yourself/... Put another way, even if there's an 0.9 probability that the advice there is wrong, buying a house is nevertheless the most significant purchase of your life for most people. It's also a very illiquid purchase, meaning it's difficult to sell and you need it to appreciate ~7% just to make back what you paid (that's because of Realtor(tm) commissions). You owe it to yourself to seek out a different opinion even if there's only a 0.1 probability it's accurate. Edit with an addendum: My goal is not necessarily to get people to avoid Realtors(tm). This is not yet possible given the state of the market; I made some effort in that direction and was unsuccessful when I bought a single-family home on the SF peninsula. Instead, it's to get folks to realize that especially in coastal markets, they are likely not worth it, have minimal mandated training, and do not necessarily have your best interests in mind. In the long run, what I'd like to do is encourage HN readers to come up with ways to make real estate transactions more efficient. Some Realtors(tm) with deep knowledge will probably stay in the industry; most others will end up doing something more productive with their lives.

by declan 12y ago

burntsushi 12y ago

I really liked your comment. It's insightful and provided a perspective I hadn't really heard before. This is important, because I'm gearing up to buy my first house in about 2 years or so. The thought of working with a realtor has been somewhat terrifying, if only because I believe competence is rare generally. And the incentive inverse has always been a bit of a put off too. I've certainly considered the possibility of going without a realtor when the time comes, but multiple people whose opinion I respect have claimed that a realtor was worth it. So your comment piqued my interest. In search of more information, I decided to check out patrick.net. Umm. What? Here's what I see: * Money is a form of social control and most Americans are debt slaves * Midieval spikes thwart London homeless from sleeping in apartment doorways * Michael Moore in cat fight with wife over divorce settlement * Photo of US at Night * "Go and rape women" Why do we just stand by? * God bless the free market! * ... I mean, really? I understand that this is probably some dynamically generated list of hot threads from a message board, but if your goal is to convince someone that maybe realtors aren't necessary (a pretty mind-bending claim for most people, I imagine), then you have provided a source that inspires exactly zero credibility. I'd suggest you stop linking people to it. I had expected to see some material on how one would achieve tasks that a realtor would normally perform for you. I can at least understand how this open data stuff would help replace the realtor's job of finding houses for you, but what about all the legal mumbo jumbo? I know almost nothing about it, but I know it exists. So how would I tackle it? Is there anything else that a realtor generally does that I'll have to do myself?

huherto 12y ago
I also got lost on the site. But this article is really good. http://patrick.net/housing/crash1.html http://patrick.net/housing/crash1.html
declan 12y ago
These are fair points. I've met Patrick in person and used to follow patrick.net a while ago (>4 years ago), but the discussion threads appear to have gone downhill a bit. But as someone else pointed out, there are some FAQs there that provide a useful counter to the conventional wisdom. Also it looks like Patrick now has a book out you can buy on Amazon.com: http://www.amazon.com/Housing-Trap-Buyers-Captured-Yourself/dp/1479156213/?tag=patricknet-20 http://www.amazon.com/Housing-Trap-Buyers-Captured-Yourself/... Put another way, even if there's an 0.9 probability that the advice there is wrong, buying a house is nevertheless the most significant purchase of your life for most people. It's also a very illiquid purchase, meaning it's difficult to sell and you need it to appreciate ~7% just to make back what you paid (that's because of Realtor(tm) commissions). You owe it to yourself to seek out a different opinion even if there's only a 0.1 probability it's accurate. Edit with an addendum: My goal is not necessarily to get people to avoid Realtors(tm). This is not yet possible given the state of the market; I made some effort in that direction and was unsuccessful when I bought a single-family home on the SF peninsula. Instead, it's to get folks to realize that especially in coastal markets, they are likely not worth it, have minimal mandated training, and do not necessarily have your best interests in mind. In the long run, what I'd like to do is encourage HN readers to come up with ways to make real estate transactions more efficient. Some Realtors(tm) with deep knowledge will probably stay in the industry; most others will end up doing something more productive with their lives.