OT- CONTEST!!! Guess public sector household earnings

[bearishgurl]

On this thread, I again asked the question:

[quote=bearishgurl on January 13, 2012 – 2:36pm]If you don’t mind my asking, why is this well-paid-and-secure couple seeking to sell their property short??[/quote]

[bearishgurl]

dupe

[bearishgurl]

On the “OT: Public Employees…” thread, I posted this:

[quote=bearishgurl on January 13, 2012 – 5:07pm] …I’m still waiting to hear the travails of your “comfortable and secure” six-figure public-worker household who wanted to explore a “short sale” possibility (of their residence?) :=D[/quote]

Well??

[CA renter]

[quote=pri_dk][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.[/quote]

The MID, tax credits, mortgage guarantees and purchases, downpayment assistance, bank bailouts, FHA, and the myriad housing programs set up to “prevent foreclosures” and artificially inflate housing prices most definitely affect the income of people who earn commissions on RE transactions.

Most RE agents are paid on a commission basis. 5% of $100K is $5,000; 5% of $200K is $10,000. One can easily argue that houses are overpriced by at least $100K in many areas due to the govt’s interventions in the mortgage and housing markets.

Add to these artificially inflated prices the fact that housing transactions would screech to a halt if the govt stepped out of the housing/mortgage market, and you’ll quickly understand how “individual compensation for real estate professionals” is absolutely subsidized by the govt.

Funny how you think realtors work so hard and “earn” their money, yet criticize what public sector workers do.

Imagine a world without realtors. Now, imagine a world without teachers, cops, firefighters, etc. Who provides the greatest benefit to society? You honestly think these public employees don’t “earn” their money, but *commissioned* salespeople do?

“Free market”? I don’t think so.

[CA renter]

“But imagine for a moment that your neighbor’s mother introduced an old friend to the FSBO seller up the street. This is brokerage, introducing buyer to seller. The principals are unrepresented, but they can do everything they need to do — in Arizona, at least — at the offices of a title company. Nothing unlawful has occurred — until grandma takes a finder’s fee from either the seller or the buyer.

At that point she is in violation of real estate licensing laws. She can connect buyers with sellers all day, every day — provided she does not get paid for doing so. The purpose of the real estate licensing laws is not to protect buyers and sellers from chatty grandmas, who may or may not know anything about real estate. Instead, those laws exist to limit artificially who can be compensated for introducing buyers and sellers.

Before the advent of licensing laws, chatty grandmas and underemployed barbers, among other people, brokered real estate on the side. In the name of “protecting” consumers, the NAR got state legislatures to pass laws putting those innocent souls out of the real estate business. These are the actions of a cartel. Even now, the NAR is trying to pass federal legislation forbidding banks from brokering real estate.

Real estate licensing laws are a criminal conspiracy against the consumer created by and for the benefit of a cartel

———————-

Let’s say I, as a buyer, want my very intelligent cousin Vinny — who knows more about RE than most agents — to help me buy a home. If we approach a seller/listing agent and try to represent ourselves, we are not allowed to keep the portion of the commission reserved for the selling (buyer’s) agent. Why? If my cousin can help me with the deal and perform all the services that an agent can, why shouldn’t I have the choice to use his services and have him earn the commission?

I agree with disclosure laws WRT licensing — people who are practicing without a license should be mandated to disclose this information up front — but we should not be **forced** to use “licensed” people in any trades, IMHO.

………………

Keeping banks out of real estate…forcing banks to use RE agents to sell their own inventory of REOs and preventing new competition from getting into RE sales. Of course, you’ll claim this is “free market,” right? Perhaps you’ll try to claim that it doesn’t affect RE commissions, either.

“WASHINGTON – After lobbying members of Congress for the past five years to enact legislation prohibiting banks from being involved in real estate brokerage activities, the National Association of Realtors is applauding the actions of the 110th Congress for moving forward with key legislation the association says is essential to ensuring the country’s real estate industry remains competitive.
H.R. 111, the Community Choice in Real Estate Act, was introduced Jan. 4 in Congress by Reps. Paul Kanjorski (D-Pa.) and Ken Calvert (R-Calif.). Fifty co-sponsors’ names were added on the first day of Congress.

“Without passage of this legislation, we are concerned that national bank conglomerates will continue their attempts to enter into the real estate industry, putting both competition and the nation’s economic health at risk,” said Pat Vredevoogd Coombs, president of the National Association of Realtors (NAR).”

http://archive.newsmax.com/money/archives/articles/2007/1/5/170932.cfm

[CA renter]

“The mortgage interest deduction (MID) is one of the oldest and largest tax expenditures in the federal income tax and is the largest single federal subsidy for owner-occupied housing. The president’s fiscal year 2010 budget reports that, in 2012, the MID will cost the federal Treasury an estimated $131 billion, much more than the total of all outlays by the Department of Housing and Urban Development ($48 billion). Homeowners also benefit from other federal tax preferences, including deductibility of residential property taxes on owner-occupied homes ($31 billion), and exclusion of tax on the first $250,000 ($500,000 for joint returns) of capital gains on housing ($50 billion).”

http://www.urban.org/uploadedpdf/412099-mortgage-deduction-reform.pdf

Loving that “free market”! It’s so nice to know that nothing is being subsidized by the govt, and that everything would just fix itself if not for those darn public employees!

(But let’s keep whining about public sector workers, shall we?)

[CA renter]

[quote=sdrealtor]CAR

Public pensions and SS are apples and oranges. I will have to wait another 20+ years to start collecting. I have client right now who is about my age and collecting a government pension of the median income for the NCC area.

If at that point I am lucky enough to live to the age of 90, I still wont collect more nominal dollars than I put in. Forget about return on capital, I’ll be lucky to see return of capital.

Sure I can sometimes work 20 hours and make $10K plus that is extremely rare and more often than not I work 40 + hours a week without getting paid a penny. Nothing we do is guaranteed. we take all the risk of earning an income. About 90% make less than minimum wage and are out of this business in a year or two. That is the norm. Your strawman arguments here are pretty pathetic and transparent.

And I am winning!!! Not whining, I’ll leave that to you[/quote]

They are not at all “apples and oranges.”

The only difference is that one is earned as compensation, and the other is an entitlement/insurance program.

The terms are different, but public pension plans vary greatly, too, with some not being very different at all vs. SS in terms of age at retirement, benefit formulas, etc.

Again, you make a contribution, and the employer (self, if self-employed) makes a contribution, the funds are invested, and you get a defined benefit. I don’t know enough about your pay or contributions, etc. to know whether or not you’ll get more than what you’ve put in. You can only know that once you’re dead and everything’s been accounted for.

You were just complaining that you didn’t have a pension or any benefits (Medicare doesn’t count either, I presume?). That is a total lie. You do get these benefits (as entitlements, not “earned” as deferred compensation, no less!), and they are backed by the govt.

You are not winning, you are whining.

[Anonymous]

[quote=CA renter]Imagine a world without realtors. Now, imagine a world without teachers, cops, firefighters, etc.[/quote]

A false choice. Please learn some logic 101 before presenting such pathetic arguments:

http://en.wikipedia.org/wiki/False_dilemma

[quote]Who provides the greatest benefit to society?[/quote]

That’s not for me to decide. It’s not for anyone to decide, actually. (unless you believe in dictatorship…)

I believe we should let the people who pay for the respective services decide how much benefit they receive from it. And they will pay what they think it’s worth.

(or do you believe the government should set prices?)

[quote]You honestly think these public employees don’t “earn” their money, but *commissioned* salespeople do?[/quote]

I never claimed public employees don’t earn it. Those are your words. I say that many of them are overcompensated relative to market rates.

And do you understand what “commissioned” means? It means that if one doesn’t produce (for any reason, including illness, family emergencies, etc.) one gets paid nothing.

Can you name a single government employee that lives with that extreme risk to their income?

[quote]“Free market”? I don’t think so.[/quote]

Anybody can start with zero training and become a real-estate agent within a month or two. That’s about as free as a labor market gets.

To use the argument that you and BG repeat ad nauseam: “If it’s so good, why don’t you do it?”

You don’t even have to wait for an opening, and don’t have to vest before you start receiving your full, generous, “government subsidized” compensation. Go for it!

[hslinger]

sdrealtor sounds like a whine connoisseur.

Only an ignorant fool would try to argue that RE isn’t a gov subsidized profession.

[CA renter]

[quote=pri_dk][quote=CA renter]Imagine a world without realtors. Now, imagine a world without teachers, cops, firefighters, etc.[/quote]

A false choice. Please learn some logic 101 before presenting such pathetic arguments:

http://en.wikipedia.org/wiki/False_dilemma

[quote]Who provides the greatest benefit to society?[/quote]

That’s not for me to decide. It’s not for anyone to decide, actually. (unless you believe in dictatorship…)

I believe we should let the people who pay for the respective services decide how much benefit they receive from it. And they will pay what they think it’s worth.

(or do you believe the government should set prices?)

[quote]You honestly think these public employees don’t “earn” their money, but *commissioned* salespeople do?[/quote]

I never claimed public employees don’t earn it. Those are your words. I say that many of them are overcompensated relative to market rates.

And do you understand what “commissioned” means? It means that if one doesn’t produce (for any reason, including illness, family emergencies, etc.) one gets paid nothing.

Can you name a single government employee that lives with that extreme risk to their income?

[quote]“Free market”? I don’t think so.[/quote]

Anybody can start with zero training and become a real-estate agent within a month or two. That’s about as free as a labor market gets.

To use the argument that you and BG repeat ad nauseam: “If it’s so good, why don’t you do it?”

You don’t even have to wait for an opening, and don’t have to vest before you start receiving your full, generous, “government subsidized” compensation. Go for it![/quote]

I am not at all an adherent of the “Efficient Market Hypothesis” and believe that such tremendous damage can be done while “the market” catches onto reality, that it can become almost impossible to reverse the damage within a reasonable amount of time. Witness the credit and housing bubbles, for example.

Sometimes, we need rational people to monitor and regulate markets — people with the requisite knowledge and understanding of how things work and who fully understand what the consequences of certain actions will be. Call it what you will…

Yes, one certainly can determine who is more valuable to society. If it affects basic needs, it is the most valuable. If it affects wants, it is less valuable. Within those two categories, things can still be weighted WRT value, but some things can become more subjective at that point.

Regarding the “free market” as it pertains to real estate, we’re not talking about who can enter a particular profession (you do realize that agents have to work under a broker who usually determines how they are compensated, right?). We’re talking about what consumers and/or taxpayers have to pay for these services and whether or not they are overpaying or being taxed more as a result of laws/rules that are designed to prop up housing prices and pay (commissions) for RE professionals.

There is no way you can claim that real estate in the U.S. is a “free market.”

As far as the “risk” involved in commission work…they take that risk because they can make outsized gains when things go well. That is the trade-off. Public sector workers make other trade-offs (risk to life or limb, stress levels, working conditions, etc.).

Personally, I don’t believe in commission-based compensation. It doesn’t reflect the work being done for the money. A realtor can work 100+ hours on a very complicated transaction worth $150K, and receive $7,500. Another realtor can work 20 hours on a relatively simple transaction worth $1.5MM and make $75,000. It makes no sense. I’d much rather pay someone for the actual time and effort they put into a project.

[Hobie]

I am also not a fan of commissioned realtors. I’m surprised that there is not more public pressure to arrange flat rate or collect bids from competing realtors to sell a home. Especially during bubble times.

My only explanation is that people don’t buy homes that frequently and are intimated by the process and emotionally reacting which plays right into the current compensation system. And most people are lousy negotiators. We bounce merrily along.

[SD Realtor]

Yeah Hobie I guess that nasty realtor goes to peoples homes and puts a gun to their head to force them to use him. Obviously there are no choices for people out there like Redfin or even flat fee models like Help U Sell.

Sounds like the Realtor KGB has a stranglehold on our society.

Personally I like to show up with an uzi at my listing appts.

[Hobie]

Not trying to pick a fight. Just comparing to other industries. Don’t go postal on me. Care to address my points?

[sdrealtor]

Yes real estate is subsidized? Yes I make more omn each transaction because of that? I also make less as a realtor than I did in anything else I have done in the last 20 years and do this for the lifestyle it affords me not the income. Most realtors make minimum wage or less for the time they put in. Not complaint just stating a fact. Not whining either as I love my life and giving up making more money for having more control over my time is a choice I have happily made.

OK back to where we were. Public servants do a very noble thing. They serve us and for that I am grateful. Am I grateful enough that they should earn in the top 1 to 2 percent of wage earners in this country while having full health benefits and a mid 6 figure pension to look forward to in their 50’s? Probably not. I like them, I respect them, I don’t want their jobs or lifestyles. Does that mean I can’t consider them over compensated? That I don’t understand.

[sdrealtor]

Dupe

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