Getting Away With (Practically) Murder-Garyl Hester CodeFool.org
"What is being lost in all the noise surrounding the mortgage bust are the parties that I believe are truly responsible for the whole thing: real estate agents (Realtor.)
I make no bones about it, I have hired five realtors in my life and will never again, mostly because in my experience they did two - and only two - things:
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1) They listed my house in the MLS database, and
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2) Showed up at closing to collect their check.
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The MLS (Multiple Listing Service) is the national database used by all realtors to list properties for sale and to find properties to buy. When you sell your house the realtor you hire puts your house on the MLS and then another realtor hired by a buyer finds the listing and then shows your house to the buyer.
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If the buyer buys your house, the two realtors split a 6% (nominal) commission based on the selling price of your house. So, in effect, the only function the realtor serves is to put your house in the MLS and then sit back and wait for it to sell. Now, I am oversimplifying the situation a bit - there are good, very hard working realtors that actually earn their commissions.
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In my experience, however, I have a 100% hit rate on a sample size of 5, and this suggests that the overwhelming number of realtors falls into the class of “get-rich-quick-lazy-ass.”
rThis justifies my placing realtors as a whole into the sub-genus of homo sapiens that falls just below lawyers on the list of complete wastes of skin. In fact, they are a blight on humanity - producing nothing yet sculpting the legal system so that they are covered regardless.
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And, as I shall discuss, are the hit-and-run con artists of the information age, and, frankly, need to go away.
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To begin, let’s go over a “common” real estate transaction. The core of the transaction is the transfer of title. In essence, the buyer is buying the title to the property owned by the seller. The title is a document that says who owns the real property.
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Contrary to common belief, the property is the land that the house sits on (the “real” estate) and not the house, which is actually listed as an “improvement” on the land and arguably is temporary, especially in the light of Hurricane Katrina.
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What the buyer is most interested in is receiving a “clear” title. This means that not only does the seller own the property, but has a legal right to sell it, and there are no liens (bank, tax, government, etc.) or other claims to the land (muddy or disputed inheritance, Native American burial grounds, or what have you.)
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The whole purpose of the Title Company is to insure that the title is clear, and so if Sitting Bull shows up at your doorstep one day saying that you are squatting on his land, and you end up leaving or paying a penalty, then the Title Company is on the hook because today - at closing - they are guaranteeing that the title is “clear.”
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You, as the buyer, are paying for that title insurance, but it’s a small price to pay in consideration of what you’re insuring.
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Typically there are five parties to the real estate transaction: The buyer, the seller, the title company, the seller’s realtor and the buyer’s realtor. The title company is impartial - it does not care what the property is selling for, or even if it’s worth what is being paid, they are only there to guarantee clear title and the facilitate the transaction.
Of the remaining four parties - and this is the kicker - three of them have a vested interest in seeing to it that the buyer pays the absolute highest price possible for that property.
Read that last sentence again.
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In other words, 75% of the people involved want the buyer to get screwed. The seller wants the most he can get for his property, certainly. The realtors each receive a percentage of the selling price as a commission. So, when the buyer hires a realtor they cannot expect them to ever say the words “You’re paying too much for this house.”
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Realtors will say they have “experience” and will “guide you through” etc. etc.
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This is in the same meaning as the butcher having experience slaughtering lambs, and guiding the lambs down the primrose path to said slaughter.
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So, let’s examine this fact in light of the current mortgage mess. The basis of it all is that people paid too much for their houses. Period. And did any of those realtors who “guided” those buyers into those transactions ever suggest that they were paying too much?
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Not bloody likely. It’s about as likely as any one of us putting super unleaded into a rental car. So, sure, pay twice what the house is worth or ever will be worth - I’ll take my 6% and go home, and when the world comes crashing down around your ears - I’ll be just fine.
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And I think that’s the crux of this whole mess. The people who caused it - through greed or ignorance - and probably both - have made their money and walked away, leaving the rest of us to clean up - with our tax dollars.
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So, where is Obama with his almighty “accountability” banner? Saying “watch my hand” while he lets the real perpetrators of this mess get off scott-free.
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The fix? As usual it’s obvious but will never be implemented:
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1. Hold realtors accountable. If a “client” ends up in a bad transaction, the realtor should be culpable or at least actionable. Also, every person that is in default on their mortgages now should be given the right to sue their realtor for malfeasance.
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2. Cap real estate prices at 150% of their average assessed values over the prior five years. It’s amazing how home owners will fight to the death to keep their assessed values as low as possible while hyping up the selling price.
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If you insist that your house isn’t worth as much as the market says it is, then the market should adjust its numbers, no?"
It really is time to wake up, the Realtors and the Mortgage Brokers
are cozy-ing up with the "New Administration" to help you.
and Lots of them, at Your Expense.
There is No Insurance, no Title Company, no Real Estate Attorney
that can protect you from lack of knowledge and trusting
a Realtor to Know What is Best for Your Family, Your Future.
of a "Higher Standard" and Realtor Ethics is
the Number One Oxymoron in Business.
