OT- CONTEST!!! Guess public sector household earnings

[Anonymous]

I like to poke fun at Realtors as much as anybody here.

But the argument that their income is somehow subsidized by the government, or is otherwise “unfair,” is bogus.

The real estate agent/broker profession is actually a very good example of what our economy should be based upon: A free market with sensible regulations.

(Almost) anybody can become a real estate agent.

The only barrier to entry is the licensing process, which meets the criteria of sensible regulations: It prevents criminals and completely unqualified people from representing others in large financial transactions, but it is not so onerous that it inhibits free entry into the market. In other words, Real estate licensing protects the public without impeding the markets.

The key characteristic of Realtor compensation is that it is determined by the market – by supply and demand. Another important characteristic is that it is entirely transparent. When I buy/sell real estate and work with an agent, I know exactly (to the penny) how much my agent gets in a transaction. I enter into the deal voluntarily, am free to work with whomever I choose (or not at all) and know exactly how much I am paying for the services.

If I overpay for services, that’s entirely my own doing and has nothing to do with the government.

On the other hand, much of public-sector compensation is determined by government mandate, backroom deals, and generally opaque influences that hide the true cost of services from those who pay for them (the taxpayers). Big difference.

[Reality]

[quote=sdrealtor]While we are guessing it’s interesting to note the range is from 160 to 372k. Applying the old rule of thumb that’s says you can afford a house of three times earnings it would appear this hypothetical family could afford prices from 480 to 1.116m without stretching. Is it any wonder prices are so high?[/quote]

Of course you’d sneak this in. The cheerleading is so 2005.

And strange that you’d later post:

[quote=sdrealtor]Is anyone else concerned that a household of 2 public sector employees (not executive level postions) have incomes placing them in the top 1 or 2% of US Households?[/quote]

So are prices so high because we have tons of workers making in the top 1-2% or should we wonder why they’re so high?

[sdrealtor]

JOhn
Interesting take but not my intention which was to point out that 2 public sector employees not holding particularly high level positions can make enough to afford houses up to $1M without a major stretch. Whether they choose to do so or should do so is another matter but they can.

Its part of what supports home value being so high in Coastal CA. Thats all I was pointing out. If it came across as cheerleading you have my apologies.

[urbanrealtor]

[quote=sdrealtor]Horrible argument UR. I’m talking the annual household income. You know as well as anyone its impossible to value what we do passed on a single thing. Its a body of work for which we are compensated. Again these arent high l;evel employees. Most defintely not a police supervisor. They make earnings that put them in the top 1 or 2 % of households in this country. That is guaranteed and their jobs are recession proof. They dont worry about layoffs and they will retire young with a pension income that most likely will exceed 200K. If you dont see that as unsustainable, well thats your problem.

These are not my clients and I am not chuckling about it. I am bringing a data point to a situation that in your words is pretty fucked up. At least I add value here. As far as I can tell you add zombies and sharks. Poorly I might add.[/quote]

They are potential clients (your words for them).
They shared confidential info with you.
You are using that info to make a point about how unfairly overcompensated they are in a real estate blog.
That is seriously fucked up.
I am unclear how this adds value.
Some public employees are overcompensated.
No argument there.
There is ample evidence in the world to assert that point without outing confidential info for salacious effect.
Is your broker aware you are doing this?

[urbanrealtor]

[quote=pri_dk]

The key characteristic of Realtor compensation is that it is determined by the market – by supply and demand. Another important characteristic is that it is entirely transparent. When I buy/sell real estate and work with an agent, I know exactly (to the penny) how much my agent gets in a transaction. I enter into the deal voluntarily, am free to work with whomever I choose (or not at all) and know exactly how much I am paying for the services.

If I overpay for services, that’s entirely my own doing and has nothing to do with the government.

On the other hand, much of public-sector compensation is determined by government mandate, backroom deals, and generally opaque influences that hide the true cost of services from those who pay for them (the taxpayers). Big difference.[/quote]

So the true taxpayer cost of Realtor activities is transparent and clear?

Riiiigght.

How many short sale deals involved FHA, Freddie, or Fannie accepting far less than the market would dictate?

Who pays for government backstops on those agencies and entities?

How much would the interest rates be without GSE’s buying that debt?

How do the GSE’s afford that debt?

Its not like our industry would go away without the govt.

However, the reason we are able to make over $100k per year at 3% per deal is because the values are driven up by government subsidies to the debt market.

Its pretty clear.

[sdrealtor]

I have no agency relationship with them as I did not take them as clients. Furthermore, I haven’t shared anything about them or their identity. Confidentiality has not been compromised.

Over the years I have added a lot of value to this site. To date I can’t think of a thing you have added of value from your on street real estate experience other than an affinity for using foul language. I have to say for someone in this business As long as you have been I am underwhelmed by what you add. Frankly I don’t care what you think about me. My track record here and in the business stands testament to what I’ve accomplished. Your….not so much. Time to put you back on ignore.

[bearishgurl]

[quote=temeculaguy]I could bore you to death with the reality of pensions and how they are calculated, but this is a fact. There are 368 people retired from sd county making $8,300 or more per month in pension benefits. There are 36,000 members, so 1% have pensions of 100k or more.

http://www.sdcera.org/about_us.htm

This is the second largest county in the state and the 5th largest in the united states, over 3 million people, and the thousands of blogs and posts are about 368 people. Let’s just keep some perspective. So before you assume that evey run of the mill government employee gets some fantastic deal, get the facts, they are probably just as out of touch as the perception that all realtors make 6 figures.

I am not protecting myself, I’m not one of the 368, but I’m also not an NBA player or a CEO, some have more than me and some have less. You just happen to run into some who had more, that doesn’t mean they all do. In fact the average gov’t pension in san diego county is $28,284 per year. But it’s more fun to scream about the rare exceptions.[/quote]

Thanks for this post, TG. The above (bolded) is the average pension for a “Tier A” employee. Tier I/II employees average far less. (Likely, only a small percentage of current retirees who are in the original “Tier I” group [began employment prior to 1978 and retired prior to 3/02] are still alive.) The ones that are are no doubt eligible for Medicare.

You failed to clarify that the 36,000 SDCERA “members” include active employees as well. That number represents about 1/2 active employees and 1/2 retired employees. There are likely 6-12 deaths per month among the retired employees.

SDCERA is just a small microcosm of ONE public subdivision within the State of CA. Each of the 58 counties and hundreds of and municipalities’ retirement systems have their own nuances within their own respective retirement systems. 37 counties are “reciprocal” to each other, meaning an employee can transfer service credits between “reciprocal” counties in CA.

It is refreshing to read a post from a Pigg who knows what they’re talking about :=]

[an]

[quote=temeculaguy]I could bore you to death with the reality of pensions and how they are calculated, but this is a fact. There are 368 people retired from sd county making $8,300 or more per month in pension benefits. There are 36,000 members, so 1% have pensions of 100k or more.

http://www.sdcera.org/about_us.htm

This is the second largest county in the state and the 5th largest in the united states, over 3 million people, and the thousands of blogs and posts are about 368 people. Let’s just keep some perspective. So before you assume that evey run of the mill government employee gets some fantastic deal, get the facts, they are probably just as out of touch as the perception that all realtors make 6 figures.

I am not protecting myself, I’m not one of the 368, but I’m also not an NBA player or a CEO, some have more than me and some have less. You just happen to run into some who had more, that doesn’t mean they all do. In fact the average gov’t pension in san diego county is $28,284 per year. But it’s more fun to scream about the rare exceptions.[/quote]
$100k/year pension is HUGE. At $100k/year, assuming you can retire at 50 and live to 80, that’s $3M over the retirement years, assuming you don’t get inflation adjustment through your retirement. If you live to 90, that’s $4M. How many in the private sector do you know that make $100-150k/year can save $3-4M for retirement?

Now, lets look at the average number you presented: $28,284/year. Assuming average public employee is similar to average private employee making about median income. In San Diego in 2009, the median house hold income was $59901/year. Assuming dual income, that’s $29950.5/person. So, average public employee pension is slightly less than your median income. Now, lets see how much $28,284/year is really worth over the retirement years. Assuming you can retire at 50 and live to 80, that’s $848,520 over 30 years. If you die at 90, that’s $1,131,360. That again assume that you get no inflation adjustment. How many people with in $30k/year income can accrue $848k-$1.1M for retirement?

Bottom line is, you don’t need to have $100k pension to make it not sustainable. Even your lowly $28k/year comes out to a huge number over the life of their retirement. We also know people have been living longer and longer every year. So maybe 80-90 might sound young 30-40 years from now.

[Anonymous]

[quote=urbanrealtor]
So the true taxpayer cost of Realtor activities is transparent and clear?

Riiiigght.

[bunch of macro economic/GSE/policy stuff and how it affects the real estate markets][/quote]

Absolutely, the government influences the market for real estate. Like most here, I believe it has too much influence.

But I was talking about, and responding to, the points about the individual compensation for real estate professionals. There’s a difference.

Government activity has almost no influence on agent commission rates. The rate is always an individual agreement between clients and the agents.

Of course the two markets are related, and one could argue that government activity increases the volume of transactions, and thus provides more need/demand for real estate services. But that is only a tangential effect of government policy, at best. And there is no government policy that inhibits people from becoming agents, entering the (labor) market, and competing for the same pool of compensation.

[quote]However, the reason we are able to make over $100k per year at 3% per deal […][/quote]

We have 9% unemployment, and agents are making an “easy” 100K. All you have to do is take a few classes and pass a test to become an agent. So why aren’t more people doing it? If the government were handing out money, why wouldn’t more people be in line to take it? (thus driving down commissions as more agents compete…)

Give yourself some credit. Your job is harder and/or takes more qualifications than you describe. At least to make a living at it.

I generally don’t have a high opinion of real estate agents. The ethical practices you point out in this very thread are a perfect example of why. But, individual practices aside, I see nothing to support for the claim that the compensation of the profession is supported by the government. They earn it.

[patientrenter]

I am curious, do these public pensions typically come with post-retirement inflation protection?

[Anonymous]

[quote=bearishgurl][quote=temeculaguy]I could bore you to death with the reality of pensions and how they are calculated, […][/quote]

[some facts and minutia that don’t really support any comprehensible thesis][/quote]

The fact that public pension benefits are based on such a complicated formula provides a clear indication of why the system is in such trouble.

With private 401K amounts, the retirement formula is simple and fair: Your retirement benefit is based solely on how much you have contributed.

It’s not based on years of service, or one’s last year’s salary, or how much overtime you put in a certain year, or what what version of the plan you are on, or what agency you work for, or whether your job is dangerous, or any of the other dozen factors that can go in to public-sector retirement formula.

Private retirements are based upon how much money one has saved. Period.

How much of one’s own money they have saved.

The private system is simple and fair – and it is impossible to cheat.

The reason public pensions have become so complicated is no accident. Pension “spiking,” double-dipping, and hidden, open-ended benefits are are part of the design. A design that provides ample opportunity for manipulation and abuse.

The solution is ridiculously simple:

Everybody plays by the same rules. Retirement payouts should come 100% from the funds that one has contributed themselves, and from nowhere (and nobody) else.

How can that be “unfair?”

[urbanrealtor]

[quote=sdrealtor]I have no agency relationship with them as I did not take them as clients. Furthermore, I haven’t shared anything about them or their identity. Confidentiality has not been compromised.

Over the years I have added a lot of value to this site. To date I can’t think of a thing you have added of value from your on street real estate experience other than an affinity for using foul language. I have to say for someone in this business As long as you have been I am underwhelmed by what you add. Frankly I don’t care what you think about me. My track record here and in the business stands testament to what I’ve accomplished. Your….not so much. Time to put you back on ignore.[/quote]

Dave, as usual, you undermine your positions by taking it too far.

If you consider my value here worthless, that is your position and I respect it.
Not everyone agrees with that position, but its yours to have.
However, I was not saying you never add value.
I was saying this thread’s primary thrust was kind of worthless.

I mean honestly, were we lacking for Piggington threads that complain that public employees are greedy?

Its just irksome to hear one more Realtor go off about how our taxes are being wasted.

At some point its not discourse but just complaint masturbation.

That you glibly go off about prospective clients in a blog post (even if you don’t use their names) just because you feel they are overpaid is something that speaks poorly of you as a professional.

So yeah ignoring might work best for you.

Its definitely decreased the retarded bg-sdr duels.

[UCGal]

[quote=sdrealtor]We are going to have a contest and the winner gets a decent bottle of wine. I just got back from a potential clients and saw their year end paystubs for last year. I did not list the property because it didnt fit what I thought I could do. Its a dual income household. Both work in the public sector. One in health care and the other in public safety. Lets see who can guess the 2011 gross earnings for the household not including any benefits paid for by their employer.

Have at it and dont be afraid of going over.

Contest runs through Monday.[/quote]
Why were potential clients showing you their paystubs? Maybe I’m naive, but why would someone show a person they were interviewing to hire *their* paystubs? Or do people normally show private, fiscal data in interviewing agents?

Mortgage brokers, maybe… real estate brokers they haven’t hired yet? Seems far fetched.

[scaredyclassic]

personally, I’m wondering what a “decent” bottle of wine is. I suspect it may be better than anythin I’ve ever had. It would need to wait till next year, though, because im not drinking till 2013

[bearishgurl]

[quote=UCGal][quote=sdrealtor]We are going to have a contest and the winner gets a decent bottle of wine. I just got back from a potential clients and saw their year end paystubs for last year. I did not list the property because it didnt fit what I thought I could do. Its a dual income household. Both work in the public sector. One in health care and the other in public safety. Lets see who can guess the 2011 gross earnings for the household not including any benefits paid for by their employer.

Have at it and dont be afraid of going over.

Contest runs through Monday.[/quote]
Why were potential clients showing you their paystubs? Maybe I’m naive, but why would someone show a person they were interviewing to hire *their* paystubs? Or do people normally show private, fiscal data in interviewing agents?

Mortgage brokers, maybe… real estate brokers they haven’t hired yet? Seems far fetched.[/quote]

See the “Another Crash in 2012?” thread. I’m still waiting to hear the answer to this $64M question :=]

[quote=bearishgurl on January 12, 2012 -11:49pm][quote=sdrealtor on January 12, 2012 – 5:20pm]I asked what the employee pays not what the employer pays. I have seen tax returns from several public employees and was appalled what they were paid. If you add what the “employers” paid to these compensation figures and show me the numbers I would probably get even sicker. I dont have the stomach to see those numbers.

FYI, tomorrow I am picking up tax returns from another public servant I am doing a short sale for. I hope I can stomach them.[/quote]. . . Why . . . does this mean you have lost all respect for your next “squat-SS `victim’”?? Or perhaps you believe that they have a “questionable” hardship story? Which is it . . . exactly???[/quote]

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