8 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.

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.
- poulsbohemian 3y ago
  >And a big chunk of that goes to the brokerage. Thank you for this - the public should redirect a lot of their anger away from the agents and toward their brokerages. Likewise - please don’t use Zillow, Redfin, etc to contact an agent. Call the agent directly, as these online sites take a big pile of money out of the agents pocket as well. I want to believe changes are coming in real estate, as the long standing brokerage model exploits agents and confuses the public.
- ffgjgf1 3y ago
  5-6% of the purchase price still seems like a huge amount. Of course I don’t really know how many houses decent agents tend to sell per year.
  - alistairSH 3y ago
    It's highly variable. Sample of 1, but my agent was frequently closing several homes/week during peak season (Spring, early Summer). At the time (2017), typical listing would be $500-$1 million (Fairfax County, VA). So I'd guess 20-30/year for her. Broker keeps 30-50% of the commission. So, a good agent in NoVA is probably making $250-$500k/year (but has to pay their own payroll taxes and stuff out of that, IIRC).
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.
  - mr337 3y ago
    I agree, it feels really odd that making a huge ticket item purchase, if something goes wrong the max liability it the inspection price. A drop in the bucket for some issues they should have brought to light.
  - poulsbohemian 3y ago
    Here’s something I say to my clients: personally, if I am buying a property, I am unlikely to do an inspection because I’ve seen a lot of houses and systems and am generally able to assess for myself the quality of the systems and construction. But - especially for first time buyers - people who buy and sell houses infrequently and who don’t have a background in these things are at an informational deficit. For that reason, while the list of things an inspector checks can never be complete, it’s more information than a buyer may be able to gather on their own. Houses are just like software systems - they will never be bug free, bugs pop up for various reasons, and all an inspector is really doing is telling you the state of the system on a given day. Also - I’m about to stop recommending one of my recommended inspectors, because he’s at best a “B”. He catches most issues, but the level of care isn’t what I want for my clients. There’s another guy I used to recommend but again, he’s nearing retirement and getting sloppy.
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.

by rplst8 3y ago

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.
poulsbohemian 3y ago
>And a big chunk of that goes to the brokerage. Thank you for this - the public should redirect a lot of their anger away from the agents and toward their brokerages. Likewise - please don’t use Zillow, Redfin, etc to contact an agent. Call the agent directly, as these online sites take a big pile of money out of the agents pocket as well. I want to believe changes are coming in real estate, as the long standing brokerage model exploits agents and confuses the public.
ffgjgf1 3y ago
5-6% of the purchase price still seems like a huge amount. Of course I don’t really know how many houses decent agents tend to sell per year.
- alistairSH 3y ago
  It's highly variable. Sample of 1, but my agent was frequently closing several homes/week during peak season (Spring, early Summer). At the time (2017), typical listing would be $500-$1 million (Fairfax County, VA). So I'd guess 20-30/year for her. Broker keeps 30-50% of the commission. So, a good agent in NoVA is probably making $250-$500k/year (but has to pay their own payroll taxes and stuff out of that, IIRC).

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.
- mr337 3y ago
  I agree, it feels really odd that making a huge ticket item purchase, if something goes wrong the max liability it the inspection price. A drop in the bucket for some issues they should have brought to light.
- poulsbohemian 3y ago
  Here’s something I say to my clients: personally, if I am buying a property, I am unlikely to do an inspection because I’ve seen a lot of houses and systems and am generally able to assess for myself the quality of the systems and construction. But - especially for first time buyers - people who buy and sell houses infrequently and who don’t have a background in these things are at an informational deficit. For that reason, while the list of things an inspector checks can never be complete, it’s more information than a buyer may be able to gather on their own. Houses are just like software systems - they will never be bug free, bugs pop up for various reasons, and all an inspector is really doing is telling you the state of the system on a given day. Also - I’m about to stop recommending one of my recommended inspectors, because he’s at best a “B”. He catches most issues, but the level of care isn’t what I want for my clients. There’s another guy I used to recommend but again, he’s nearing retirement and getting sloppy.

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.