[drboom]

[quote=sdrealtor]BG,The model that we have is there because for better or worse it works. Without a system like we have the rich would slaughter the poor. The Irvine Companies of the world would continue the thuggery they employed to steal land from long time owners.[/quote]

False dichotomy.

There are many ways to run the system, not just two, and you avoid explaining why the system has to be a monopoly. Monopolies are baaad, mmm’kay?

The “end of the world” scenario is a nice flourish, but it weakens your position with thinking people if you have to employ scare tactics.

[drboom]

[quote=sdrealtor]BG,The model that we have is there because for better or worse it works. Without a system like we have the rich would slaughter the poor. The Irvine Companies of the world would continue the thuggery they employed to steal land from long time owners.[/quote]

False dichotomy.

There are many ways to run the system, not just two, and you avoid explaining why the system has to be a monopoly. Monopolies are baaad, mmm’kay?

The “end of the world” scenario is a nice flourish, but it weakens your position with thinking people if you have to employ scare tactics.

[drboom]

[quote=bearishgurl]If you follow your attorney you’re riding along with into court and watch him/her address the court and possibly argue, you might ask yourself if you can do that for yourself and also ask yourself what that atty had to do in order to prepare him/herself to address the court today.[/quote]

Whatever do you mean? Perry Mason just walked in an got the job done in an hour, and there was even time for commercials!

Seriously, who do you think you’re dealing with in this forum? Romper Room?

[drboom]

[quote=bearishgurl]If you follow your attorney you’re riding along with into court and watch him/her address the court and possibly argue, you might ask yourself if you can do that for yourself and also ask yourself what that atty had to do in order to prepare him/herself to address the court today.[/quote]

Whatever do you mean? Perry Mason just walked in an got the job done in an hour, and there was even time for commercials!

Seriously, who do you think you’re dealing with in this forum? Romper Room?

[drboom]

[quote=bearishgurl]If you follow your attorney you’re riding along with into court and watch him/her address the court and possibly argue, you might ask yourself if you can do that for yourself and also ask yourself what that atty had to do in order to prepare him/herself to address the court today.[/quote]

Whatever do you mean? Perry Mason just walked in an got the job done in an hour, and there was even time for commercials!

Seriously, who do you think you’re dealing with in this forum? Romper Room?

[drboom]

[quote=bearishgurl]If you follow your attorney you’re riding along with into court and watch him/her address the court and possibly argue, you might ask yourself if you can do that for yourself and also ask yourself what that atty had to do in order to prepare him/herself to address the court today.[/quote]

Whatever do you mean? Perry Mason just walked in an got the job done in an hour, and there was even time for commercials!

Seriously, who do you think you’re dealing with in this forum? Romper Room?

[drboom]

[quote=bearishgurl]If you follow your attorney you’re riding along with into court and watch him/her address the court and possibly argue, you might ask yourself if you can do that for yourself and also ask yourself what that atty had to do in order to prepare him/herself to address the court today.[/quote]

Whatever do you mean? Perry Mason just walked in an got the job done in an hour, and there was even time for commercials!

Seriously, who do you think you’re dealing with in this forum? Romper Room?

[drboom]

[quote=justme]6% is siphoned off each time

[quote=bearishgurl]
Fascinating, njosd, I’ll look up the book.

I stand by my assertion that buying a FSBO does NOT save the buyer any money. Therefore, I would surmise that eliminating commission would shave little to nothing off the the purchase price for the buyer.[/quote]

Possibly, the total purchase sum would always be what the market will bear, or as we have seen recently, what a fraudulent mortgage lender and borrower will bear.

But that is not the point. When the FSBO buyer later becomes a FSBO seller, s/he would also have no sales expense of 6% and get ALL the money back.

There is no way that siphoning off 6% of each transaction will get either buyer or seller as good a deal as they otherwise would have.[/quote]

Correct.

There are social and economic benefits that would accrue from making housing more liquid, too. Without the RE industry’s monopoly rents, it would be far easier for people to go where they can find work, etc.

But it occurred to me that thinking of a percentage the headline price is misleading. If you put $100k down on a house, pay your 5% fixed loan for the industry average 7 years, then sell the dump for a 20% nominal profit, what does that 6% do to your bottom line?

Let’s see what it looks like in round numbers (and stipulating that the seller pays commissions to avoid another side argument):

$35k in tax savings
+ $100k profit
--------
$135k
- $6k loan origination, other purchase costs
- $36k commission
-------
$93k net before other transaction costs


The commission will lower capital gains if applicable, but most folks will be rolling over into a new house so we can ignore it here.

So what happened? It kind of looks like Uncle Sam is giving you a break so you can pay your agent, for one thing. 🙂

Coincidences aside, it appears the agent sucked up over a quarter of your gains. YOU took all the risk, performed all the maintenance, etc., but the RE industry wants to be a junior partner in the venture for 26% of the action.

This is a favorable scenario, too. If the house only went up 10% in the same period–quite likely–then You’ll be asked to hand over about two thirds of my profits. Who’s the junior partner now?

I’ve ignored maintenance, property taxes, inflation, etc. to counter any arguments along the line that “you have to live somewhere so you would have been spending the money on rent anyway”.

So, that 6% assumes a little bigger role than it appears. I’ve never seen it explained this way before, but I’m sure someone has done a more complete analysis. I’ll go look for one to see how I did.

[drboom]

[quote=justme]6% is siphoned off each time

[quote=bearishgurl]
Fascinating, njosd, I’ll look up the book.

I stand by my assertion that buying a FSBO does NOT save the buyer any money. Therefore, I would surmise that eliminating commission would shave little to nothing off the the purchase price for the buyer.[/quote]

Possibly, the total purchase sum would always be what the market will bear, or as we have seen recently, what a fraudulent mortgage lender and borrower will bear.

But that is not the point. When the FSBO buyer later becomes a FSBO seller, s/he would also have no sales expense of 6% and get ALL the money back.

There is no way that siphoning off 6% of each transaction will get either buyer or seller as good a deal as they otherwise would have.[/quote]

Correct.

There are social and economic benefits that would accrue from making housing more liquid, too. Without the RE industry’s monopoly rents, it would be far easier for people to go where they can find work, etc.

But it occurred to me that thinking of a percentage the headline price is misleading. If you put $100k down on a house, pay your 5% fixed loan for the industry average 7 years, then sell the dump for a 20% nominal profit, what does that 6% do to your bottom line?

Let’s see what it looks like in round numbers (and stipulating that the seller pays commissions to avoid another side argument):

$35k in tax savings
+ $100k profit
--------
$135k
- $6k loan origination, other purchase costs
- $36k commission
-------
$93k net before other transaction costs


The commission will lower capital gains if applicable, but most folks will be rolling over into a new house so we can ignore it here.

So what happened? It kind of looks like Uncle Sam is giving you a break so you can pay your agent, for one thing. 🙂

Coincidences aside, it appears the agent sucked up over a quarter of your gains. YOU took all the risk, performed all the maintenance, etc., but the RE industry wants to be a junior partner in the venture for 26% of the action.

This is a favorable scenario, too. If the house only went up 10% in the same period–quite likely–then You’ll be asked to hand over about two thirds of my profits. Who’s the junior partner now?

I’ve ignored maintenance, property taxes, inflation, etc. to counter any arguments along the line that “you have to live somewhere so you would have been spending the money on rent anyway”.

So, that 6% assumes a little bigger role than it appears. I’ve never seen it explained this way before, but I’m sure someone has done a more complete analysis. I’ll go look for one to see how I did.

[drboom]

[quote=justme]6% is siphoned off each time

[quote=bearishgurl]
Fascinating, njosd, I’ll look up the book.

I stand by my assertion that buying a FSBO does NOT save the buyer any money. Therefore, I would surmise that eliminating commission would shave little to nothing off the the purchase price for the buyer.[/quote]

Possibly, the total purchase sum would always be what the market will bear, or as we have seen recently, what a fraudulent mortgage lender and borrower will bear.

But that is not the point. When the FSBO buyer later becomes a FSBO seller, s/he would also have no sales expense of 6% and get ALL the money back.

There is no way that siphoning off 6% of each transaction will get either buyer or seller as good a deal as they otherwise would have.[/quote]

Correct.

There are social and economic benefits that would accrue from making housing more liquid, too. Without the RE industry’s monopoly rents, it would be far easier for people to go where they can find work, etc.

But it occurred to me that thinking of a percentage the headline price is misleading. If you put $100k down on a house, pay your 5% fixed loan for the industry average 7 years, then sell the dump for a 20% nominal profit, what does that 6% do to your bottom line?

Let’s see what it looks like in round numbers (and stipulating that the seller pays commissions to avoid another side argument):

$35k in tax savings
+ $100k profit
--------
$135k
- $6k loan origination, other purchase costs
- $36k commission
-------
$93k net before other transaction costs


The commission will lower capital gains if applicable, but most folks will be rolling over into a new house so we can ignore it here.

So what happened? It kind of looks like Uncle Sam is giving you a break so you can pay your agent, for one thing. 🙂

Coincidences aside, it appears the agent sucked up over a quarter of your gains. YOU took all the risk, performed all the maintenance, etc., but the RE industry wants to be a junior partner in the venture for 26% of the action.

This is a favorable scenario, too. If the house only went up 10% in the same period–quite likely–then You’ll be asked to hand over about two thirds of my profits. Who’s the junior partner now?

I’ve ignored maintenance, property taxes, inflation, etc. to counter any arguments along the line that “you have to live somewhere so you would have been spending the money on rent anyway”.

So, that 6% assumes a little bigger role than it appears. I’ve never seen it explained this way before, but I’m sure someone has done a more complete analysis. I’ll go look for one to see how I did.

[drboom]

[quote=justme]6% is siphoned off each time

[quote=bearishgurl]
Fascinating, njosd, I’ll look up the book.

I stand by my assertion that buying a FSBO does NOT save the buyer any money. Therefore, I would surmise that eliminating commission would shave little to nothing off the the purchase price for the buyer.[/quote]

Possibly, the total purchase sum would always be what the market will bear, or as we have seen recently, what a fraudulent mortgage lender and borrower will bear.

But that is not the point. When the FSBO buyer later becomes a FSBO seller, s/he would also have no sales expense of 6% and get ALL the money back.

There is no way that siphoning off 6% of each transaction will get either buyer or seller as good a deal as they otherwise would have.[/quote]

Correct.

There are social and economic benefits that would accrue from making housing more liquid, too. Without the RE industry’s monopoly rents, it would be far easier for people to go where they can find work, etc.

But it occurred to me that thinking of a percentage the headline price is misleading. If you put $100k down on a house, pay your 5% fixed loan for the industry average 7 years, then sell the dump for a 20% nominal profit, what does that 6% do to your bottom line?

Let’s see what it looks like in round numbers (and stipulating that the seller pays commissions to avoid another side argument):

$35k in tax savings
+ $100k profit
--------
$135k
- $6k loan origination, other purchase costs
- $36k commission
-------
$93k net before other transaction costs


The commission will lower capital gains if applicable, but most folks will be rolling over into a new house so we can ignore it here.

So what happened? It kind of looks like Uncle Sam is giving you a break so you can pay your agent, for one thing. 🙂

Coincidences aside, it appears the agent sucked up over a quarter of your gains. YOU took all the risk, performed all the maintenance, etc., but the RE industry wants to be a junior partner in the venture for 26% of the action.

This is a favorable scenario, too. If the house only went up 10% in the same period–quite likely–then You’ll be asked to hand over about two thirds of my profits. Who’s the junior partner now?

I’ve ignored maintenance, property taxes, inflation, etc. to counter any arguments along the line that “you have to live somewhere so you would have been spending the money on rent anyway”.

So, that 6% assumes a little bigger role than it appears. I’ve never seen it explained this way before, but I’m sure someone has done a more complete analysis. I’ll go look for one to see how I did.

[drboom]

[quote=justme]6% is siphoned off each time

[quote=bearishgurl]
Fascinating, njosd, I’ll look up the book.

I stand by my assertion that buying a FSBO does NOT save the buyer any money. Therefore, I would surmise that eliminating commission would shave little to nothing off the the purchase price for the buyer.[/quote]

Possibly, the total purchase sum would always be what the market will bear, or as we have seen recently, what a fraudulent mortgage lender and borrower will bear.

But that is not the point. When the FSBO buyer later becomes a FSBO seller, s/he would also have no sales expense of 6% and get ALL the money back.

There is no way that siphoning off 6% of each transaction will get either buyer or seller as good a deal as they otherwise would have.[/quote]

Correct.

There are social and economic benefits that would accrue from making housing more liquid, too. Without the RE industry’s monopoly rents, it would be far easier for people to go where they can find work, etc.

But it occurred to me that thinking of a percentage the headline price is misleading. If you put $100k down on a house, pay your 5% fixed loan for the industry average 7 years, then sell the dump for a 20% nominal profit, what does that 6% do to your bottom line?

Let’s see what it looks like in round numbers (and stipulating that the seller pays commissions to avoid another side argument):

$35k in tax savings
+ $100k profit
--------
$135k
- $6k loan origination, other purchase costs
- $36k commission
-------
$93k net before other transaction costs


The commission will lower capital gains if applicable, but most folks will be rolling over into a new house so we can ignore it here.

So what happened? It kind of looks like Uncle Sam is giving you a break so you can pay your agent, for one thing. 🙂

Coincidences aside, it appears the agent sucked up over a quarter of your gains. YOU took all the risk, performed all the maintenance, etc., but the RE industry wants to be a junior partner in the venture for 26% of the action.

This is a favorable scenario, too. If the house only went up 10% in the same period–quite likely–then You’ll be asked to hand over about two thirds of my profits. Who’s the junior partner now?

I’ve ignored maintenance, property taxes, inflation, etc. to counter any arguments along the line that “you have to live somewhere so you would have been spending the money on rent anyway”.

So, that 6% assumes a little bigger role than it appears. I’ve never seen it explained this way before, but I’m sure someone has done a more complete analysis. I’ll go look for one to see how I did.

[drboom]

[quote=sdrealtor]CAR
Yes there are lots of buyers who back of SS. One of the most important things I can do on a SS is be able to recognize which buyers are most likely to stick.[/quote]

After 4 months, why the hell would you expect anyone to stick around, especially when the lender could say no after waiting all that time? 30 days with no movement? screw ’em. I’ll keep looking rather than pining for months after the short sale of my dreams.

It isn’t a marriage, it’s an offer to buy. If the seller can’t deliver the goods in a reasonable amount of time, that’s not the buyer’s problem. You seem to be looking for emotional buyers, aka “suckers”. That may be a good strategy for your sellers, but don’t disparage the sensible folks who made a good faith effort to buy what you couldn’t manage to sell them before they grew too old to care.

[drboom]

[quote=sdrealtor]CAR
Yes there are lots of buyers who back of SS. One of the most important things I can do on a SS is be able to recognize which buyers are most likely to stick.[/quote]

After 4 months, why the hell would you expect anyone to stick around, especially when the lender could say no after waiting all that time? 30 days with no movement? screw ’em. I’ll keep looking rather than pining for months after the short sale of my dreams.

It isn’t a marriage, it’s an offer to buy. If the seller can’t deliver the goods in a reasonable amount of time, that’s not the buyer’s problem. You seem to be looking for emotional buyers, aka “suckers”. That may be a good strategy for your sellers, but don’t disparage the sensible folks who made a good faith effort to buy what you couldn’t manage to sell them before they grew too old to care.

[drboom]

[quote=sdrealtor]CAR
Yes there are lots of buyers who back of SS. One of the most important things I can do on a SS is be able to recognize which buyers are most likely to stick.[/quote]

After 4 months, why the hell would you expect anyone to stick around, especially when the lender could say no after waiting all that time? 30 days with no movement? screw ’em. I’ll keep looking rather than pining for months after the short sale of my dreams.

It isn’t a marriage, it’s an offer to buy. If the seller can’t deliver the goods in a reasonable amount of time, that’s not the buyer’s problem. You seem to be looking for emotional buyers, aka “suckers”. That may be a good strategy for your sellers, but don’t disparage the sensible folks who made a good faith effort to buy what you couldn’t manage to sell them before they grew too old to care.

[Author]

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