[PerryChase]

I have done real estate transactions with no brokers involved. All you need is an escrow (plenty of companies to choose from), and lawyers on each side to review the paperwork (if desired), and title insurance. Even with attorneys’ fees it works out much less than 5%-6% of the transaction value.

What we need in real estate is a better, more effecient system of matching buyers and sellers. Once that happens, you can hire professionals to do the paperwork on a fee-for-service basis. Those professionals would get paid even if the transactions falls through.

All the better if property prices are lower. We can put our money to more productive uses… , or even enjoy ourselves by spending it in on frivolous things. Why feed the beast?

[PerryChase]

I just heard of 18-unit complex in Point Loma a couple blocks from the ocean. They have 1-bedroom going for about $950 now including cable and water. Loma Manor Apartments. I’ve not been there so I don’t know if it’s a nice place.

[PerryChase]

That’s why I say that consumer pay too much already. It’s up to the RE industry to sort out their problems. It’s not the public’s responsibility to subsidize them.

Let the consumers have REAL choices and the problems will get sorted out by themselves.

[PerryChase]

That’s why Realtor comes with a capital R.

Milton Friedman said “I am a libertarian with a small l and a Republican with a capital R. And I am a Republican with a capital R on grounds of expediency, not on principle.”

Semantics are often times very important.

[PerryChase]

Notice that their assets are still $53 million greater than their liabilities. The problem is that the houses aren’t moving so the cash crunch led to the bankruptcy. I can see the values their houses and land drop by 30-50%. Then they’ll really be in a hole.

[PerryChase]

BuyerWillEPB, I know it’s easier said than done, but it’s best to get the emotion out of owning a house. Keep on renting until it makes sense to buy.

In the last few years people rushed to buy a house because they thought they’d get locked out if they didn’t jump in. That (and speculators) caused the runup that we saw.

Rushing to buy a house is like rushing to get married. It can ruin your life.

[PerryChase]

I’ve been involved in many transactions, including 1031 exchanges and commercial properties. I’ve never had any problems. Maybe because I always used a Realtor/broker. 🙂

I always selected my own escrow and I find that it works much better than when the agents choose the escrow company. I also select my own title insurance.

I have nothing against Realtors. There’s a place for them. However, there should be room for discount brokers as well. For example if somone is looking to buy a relatively new house or a condo downtown, he might as well use ziprealty. I never used ziprealty before because they weren’t available; but I plan to eventually give them a try.

I just don’t think we should just say that because RE is complicated we should support a rigid, high cost system. We need REAL consumer choices.

[PerryChase]

Isn’t there liability insurance? My brother operates a business and he carries insurance.

[PerryChase]

I can sympathize with the fact that the real estate industry is hurting in the downturn.

Nevertheless, it’s not for the public to bail out any industry. That industry needs to sort itself out.

We live in a free society and consumers should always have the choice to select the products and services that, in their views, are the best value for their money. Let the consumers decide with their money what’s best for them.

I applaud business ventures such as ipayone, zillow, ziprealty for bringing choices and information to the real estate consumers.

[PerryChase]

bgates, you are right. To each his own. That’s why we need choices. We don’t need regulations protecting any entrenched business model.

You want a recommendation from a trusted bookseller; but I know what I want to read and I’m happier ordering on the Net and saving $5.

You want a travel agent to plan your trip; but I’m happy taking my chances.

There should be room for everyone.

What bothers me about the real estate industry is that the agents and brokers are colluding to prevent other ways of doing business from taking hold. They do it under guise of consumer protection, but in reality they want to protect their pocketbook.

[PerryChase]

What about 5 years ago when prices were 50% lower than today?

Realtors were doing just fine back then. If anything Realtors got a 100% raise in 5 years. I don’t understand how brokers are not profiting.

[PerryChase]

Good suggestions, JES.

I’ve not bought a house lately, but I noticed that ziprealty has a “make offer” button. I like ziprealty more than the rest because, it’s not a referral service. You can actually buy and sell with ziprealty.

sdrealtor has a point that certain transactions are complicated. However, the vast majority of transactions are straight forward.

I think that we’ll see a dual system evolve where people who need hand holding can go to a full service broker whereas others will use discount brokers. Let the customer choose.

I think that RE brokering will evolve like the travel or insurance industries but at a slower pace. Remember, those agents used to charge 10% of everything.

The real estate lobby is very strong and they’ll try to slow the evolution process as much as possible. In the end, politicians will have to step-up and write new regulations to streamline the process.

Less friction in our economy will mean that resources can be freed-up for more inovative uses. That’s how, as a society, we can increase our standard of living.

[PerryChase]

The tech revolution hasn’t reached real estate or the medical field yet… but it’s only a matter of time. Sooner or later the new generation will demand online services.

My dad is 76yo. Years ago, I bought him a computer and showed him how get online. He takes medication everyday for his prostate problem. I finally convinced him to order his meds online for postal delivery — more convenient and cheaper. Dad’s adjusment has been gradual with consistent progress. He now makes his travel arrangements and reads all his newspapers online. I don’t think that he’d buy a house online, but he would use ziprealty if I showed him.

I can assure you that that the generation that’s growing up with broadband, IM and SMS will be buying houses online. I’m sure that my nieces and newphew, when they grow up, would not use a traditional Realtor. Heck, they don’t even like the sales people at the store. They know what they want and they demand easy access to information. They are unlikely to deal with information gatekeepers.

There’ll be some busts along the way, but tech will affect every aspects of life, including real estate. There is no reason why buying and selling houses cannot be more efficient and less costly than it is today. In a booming market, inefficiencies are masked; but in a downturn the cost cuttings will begin.

[PerryChase]

Tucker, I think that was really mean of you.

powayseller, did a lot of work and presented it to us on a silver platter. Thanks to her, I could read real estate related news without looking for it. I miss her.

powayseller’s post were provocative and got us to think about what could happen on the downside.

When powayseller develops her own site, I’ll be hanging out there rather than here.

If you can’t handle her bear perspective, then you’re not able to have an impartial view of Real Estate. Ignoring the downside of real estate is like going to war and refusing to plan for the possibility that your might loose. That outcome wouldn’t be pleasant but the possibility is always there.

If you don’t agree with PS, why not start a different thread to present your point of view. Plus it’s easy to ignore the posts you don’t want to read.

[PerryChase]

I think that there’ll be a certain floor for SFH, say $250 – $300k.

But I would not be suprised to see at $1.8 million house fall to $900k. The drop will vary the type of properties, but I don’t believe that the high-end will be insulated. For example a 950sf North Park house that sold for $750k at the peak could easily drop to $350k. Same goes for that bungalow in Encinitas.

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