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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

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.
- burntsushi 12y ago
  You make a good point. The site is off putting, but it's worth it to spend a little time investigating. I'll check out the link that huherto gave me and maybe take a look at the book. > 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). Indeed. Realtor commissions are a huge drag. I do somewhat skip over the part about the importance of a house appreciating in value because I'm not purchasing a house as an investment in which the primary goal is to make money. It's a purchase of a good whose main value to me is its utility as a domicile. A secondary goal is for it to benefit me financially. I acknowledge that this may be an uneducated opinion, but I definitely know what a house means to me, and its financial value isn't terribly high on that list. Perhaps that will change as I learn more over the coming years. (I'm considering building a house too. I get the feeling it would be financially better to start smaller, and then incrementally add to the house as we accrue the necessary capital to do it. I very much intend for my first house to be my primary residence for at least a couple decades.)
  - declan 12y ago
    >I'm considering building a house too. I get the feeling it would be financially better to start smaller, and then incrementally add to the house as we accrue the necessary capital to do it. I don't know anything about your personal financial situation, so this advice may be completely off-base. But perhaps buy a house that's unrenovated but structurally sound and then hire a contractor to renovate it to your specifications? At least if my experience a few years ago was any indication, you'll learn a tremendous amount about permits, appliances, electrical upgrades, fixtures, moulding, doors and windows, insulation, decks, landscaping, and how to manage a complex undertaking that's likely (depending on the size of the house and the geographic area) to run into the six figures and last at least half a year. Then, a few years later, you can hire an architect and do everything right the second time around. :) Also if you live in the SF bay area (and I know your profile says you're in Massachusetts), be warned that all the good land is already built on or unavailable for building or vacant and extremely expensive -- as in millions of dollars for just a lot in Portola Valley, Los Altos Hills, or Woodside. There was a discounted property for sale two blocks down from me a few years ago for only $800,000 (!). But there was an active landslide on the property and the town expressed some doubt about whether the owner actually had the legal authority under the deed to subdivide in the first place... So if you have a liquidity event, you can buy that 800 ft^2 shack in a great location in Palo Alto for $2M, tear it down, and spend another two years and $2M building a nice modern 3,500 ft^2 house (1,000 of that may have to be underground because, well, it's Palo Alto). Otherwise, well, New Hampshire is a nice place to live! :)

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.

burntsushi 12y ago
You make a good point. The site is off putting, but it's worth it to spend a little time investigating. I'll check out the link that huherto gave me and maybe take a look at the book. > 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). Indeed. Realtor commissions are a huge drag. I do somewhat skip over the part about the importance of a house appreciating in value because I'm not purchasing a house as an investment in which the primary goal is to make money. It's a purchase of a good whose main value to me is its utility as a domicile. A secondary goal is for it to benefit me financially. I acknowledge that this may be an uneducated opinion, but I definitely know what a house means to me, and its financial value isn't terribly high on that list. Perhaps that will change as I learn more over the coming years. (I'm considering building a house too. I get the feeling it would be financially better to start smaller, and then incrementally add to the house as we accrue the necessary capital to do it. I very much intend for my first house to be my primary residence for at least a couple decades.)
- declan 12y ago
  >I'm considering building a house too. I get the feeling it would be financially better to start smaller, and then incrementally add to the house as we accrue the necessary capital to do it. I don't know anything about your personal financial situation, so this advice may be completely off-base. But perhaps buy a house that's unrenovated but structurally sound and then hire a contractor to renovate it to your specifications? At least if my experience a few years ago was any indication, you'll learn a tremendous amount about permits, appliances, electrical upgrades, fixtures, moulding, doors and windows, insulation, decks, landscaping, and how to manage a complex undertaking that's likely (depending on the size of the house and the geographic area) to run into the six figures and last at least half a year. Then, a few years later, you can hire an architect and do everything right the second time around. :) Also if you live in the SF bay area (and I know your profile says you're in Massachusetts), be warned that all the good land is already built on or unavailable for building or vacant and extremely expensive -- as in millions of dollars for just a lot in Portola Valley, Los Altos Hills, or Woodside. There was a discounted property for sale two blocks down from me a few years ago for only $800,000 (!). But there was an active landslide on the property and the town expressed some doubt about whether the owner actually had the legal authority under the deed to subdivide in the first place... So if you have a liquidity event, you can buy that 800 ft^2 shack in a great location in Palo Alto for $2M, tear it down, and spend another two years and $2M building a nice modern 3,500 ft^2 house (1,000 of that may have to be underground because, well, it's Palo Alto). Otherwise, well, New Hampshire is a nice place to live! :)