Not only will it increase savings upon buying and selling, but I think more importantly, it will increase housing & real estate turnover and liquidity.
Real estate has always been illiquid and high commissions are a friction. The increased turnover may actually result in more transactions for the realty industry, even if the commission is lower. What kind of positive effects would be had on the economy, if let's say the average number of home purchases by a family in a lifetime went up from 2 to 2.3? People would move more often (they'd contemplate a move even less), cities could grow or regenerate faster, and human capital would be more fluid across the country.
I always know you are speaking truth to power Matt when I read one of your essays and I just know that it, or it’s gist, would never show up in the NYT. 6% of. Manhattan condo has to be
If this comes to pass, as it is not yet a fait accompli, the end result will be a drop in home prices to accommodate the need for the buyer to pay his broker. As an example, assume the market price of a home today is $500,000, and the seller pays the commission of the buyer's broker. if the buyer has to pay his broker, let's say 3%, the buyer isn't going to pay more than $500,000 for the home, if is that is the homes value, so buyer's will deduct what they have to their broker, in the above case, $15,000 and pay $485,000 for the home so the total price to the buyer is still $500,000.
When I read your assertion that a Real estate broker’s commission charge in the US averages around 6 percent of the purchase price of the home, versus a much more manageable 1 percent in the UK and Singapore, I immediately thought of another figure which demonstrates that American capitalism is not the angelic darling the GOP imagines it is. More specifically, I remembered that although Medicare has administrative costs of 3 percent, private insurance companies have administrative costs and profits totaling more like 20 to 25 percent of the actual cost of medical services. (But, of course, the talking heads on the media forever bombard us with rhetoric to the effect that all public programs are inefficient, cumbersome and expensive.)
I think the term “middlemen” economy is too euphemistic. If it looks like a duck and quacks like a duck, it’s Donald Trump. Likewise, this economy should be called the parasite economy. Brokers have always gotten on my nerves. Back in the eighties, there was a hit movie which lampooned wallstreet at the zenith of the Reagen-Thatcher-Yuppie era. I’ll never forget the vulgar Real Estate Broker in the movie who said, “The only things that are moving are Puerto Ricans and Roaches.”
"Smiley Bergers"--"You are sooo busted". I loved that movie, didn't know that some of us thought it was a bad one.
Two years ago, my daughter was trying to make offers on houses that used to be valued at $125,000 and was losing the house by offering $260-280,000 and getting outbid. What a freaking nightmare. The realtor seemed nice enough but I am glad that she never succeeded and I am also sad that she has to remain a renter.
I should have read all, but one thing to note, To me and no, it depends, as to pay up front or not. But as to fees. I classify as to signing a NOTE: As to this case, how many put that say from buyers end onto the NOTE. As to educate people, Fees, added insurance, say like A car or Truck, added insurances as to repairs. And putting it on the note. Thats the first thing to go, but last to pay off.
So, in the cases, You got to add in Interest rates- cost to your payout.
ADD, Me being in construction, and home repairs, A lot people just do not know, what it cost or to have a home. there is roughly 25 different things added into owning a home, as to keeping and holding on to it, - added cost.
To me,, We need to educate the public, it take more then go out and vote.
Not only will it increase savings upon buying and selling, but I think more importantly, it will increase housing & real estate turnover and liquidity.
Real estate has always been illiquid and high commissions are a friction. The increased turnover may actually result in more transactions for the realty industry, even if the commission is lower. What kind of positive effects would be had on the economy, if let's say the average number of home purchases by a family in a lifetime went up from 2 to 2.3? People would move more often (they'd contemplate a move even less), cities could grow or regenerate faster, and human capital would be more fluid across the country.
In Los Angeles everyone and their mother is a real estate broker. It's many people's second job... the job they hope will really bring them money.
I've even had high school students ask about whether they should go into that field because it looks like it's an easy way to make money :).
For this reason, I've always looked down on the field.
Excellent article Matt, sharing it far and wide!
Hope you and your Wife, getting sleep, Matt. Remember to train NOW, not later.
The multi problems we deal with. I have wounder as to spoilied kids, just become Dem-A -Gods in life.
Or the non-loved too on the other end.
I always know you are speaking truth to power Matt when I read one of your essays and I just know that it, or it’s gist, would never show up in the NYT. 6% of. Manhattan condo has to be
If this comes to pass, as it is not yet a fait accompli, the end result will be a drop in home prices to accommodate the need for the buyer to pay his broker. As an example, assume the market price of a home today is $500,000, and the seller pays the commission of the buyer's broker. if the buyer has to pay his broker, let's say 3%, the buyer isn't going to pay more than $500,000 for the home, if is that is the homes value, so buyer's will deduct what they have to their broker, in the above case, $15,000 and pay $485,000 for the home so the total price to the buyer is still $500,000.
When I read your assertion that a Real estate broker’s commission charge in the US averages around 6 percent of the purchase price of the home, versus a much more manageable 1 percent in the UK and Singapore, I immediately thought of another figure which demonstrates that American capitalism is not the angelic darling the GOP imagines it is. More specifically, I remembered that although Medicare has administrative costs of 3 percent, private insurance companies have administrative costs and profits totaling more like 20 to 25 percent of the actual cost of medical services. (But, of course, the talking heads on the media forever bombard us with rhetoric to the effect that all public programs are inefficient, cumbersome and expensive.)
I think the term “middlemen” economy is too euphemistic. If it looks like a duck and quacks like a duck, it’s Donald Trump. Likewise, this economy should be called the parasite economy. Brokers have always gotten on my nerves. Back in the eighties, there was a hit movie which lampooned wallstreet at the zenith of the Reagen-Thatcher-Yuppie era. I’ll never forget the vulgar Real Estate Broker in the movie who said, “The only things that are moving are Puerto Ricans and Roaches.”
Fascinating.
You painted a picture of a business that touches every American in some way and which should influence a change in our economy.
(May I send a copy to Katie Porter?)
God, I wish I could speed read.
"Smiley Bergers"--"You are sooo busted". I loved that movie, didn't know that some of us thought it was a bad one.
Two years ago, my daughter was trying to make offers on houses that used to be valued at $125,000 and was losing the house by offering $260-280,000 and getting outbid. What a freaking nightmare. The realtor seemed nice enough but I am glad that she never succeeded and I am also sad that she has to remain a renter.
Just a pamphlet insertion from 1910 development of the
Richmond and Sunset districts in San Francisco. The difference in attitude is arresting to me.
Urban Realty Improvement Co. Pamphlet 1910
Page from URIC sales pamphlet, circa 1910
WNP collection ()
Urban Realty Improvement Co. Pamphlet Urban Realty Improvement Co. Pamphlet
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I should have read all, but one thing to note, To me and no, it depends, as to pay up front or not. But as to fees. I classify as to signing a NOTE: As to this case, how many put that say from buyers end onto the NOTE. As to educate people, Fees, added insurance, say like A car or Truck, added insurances as to repairs. And putting it on the note. Thats the first thing to go, but last to pay off.
So, in the cases, You got to add in Interest rates- cost to your payout.
ADD, Me being in construction, and home repairs, A lot people just do not know, what it cost or to have a home. there is roughly 25 different things added into owning a home, as to keeping and holding on to it, - added cost.
To me,, We need to educate the public, it take more then go out and vote.
Thank to what you do Matt and others.
My Name is NoBody, (1vs160)