Author Topic: So I made an offer on a house and lost  (Read 11190 times)

Thomas54

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So I made an offer on a house and lost
« on: February 08, 2016, 02:24:43 PM »
My wife and I looked at a very nice home yesterday and we made an offer.  The home was only on the market for a few days and the folks living there are moving in a couple of weeks.  They accepted an offer from their company's relocation contractor and the relocation contractor listed the home through a local/national real estate company.

My agent called me a few hours later and told me that the listing agent had received my offer and that they had shown the home to quite a few folks over the weekend.  So, since my wife and I really like the home, we increased our offer to the asking price. 

This morning, my agent told me that someone had offered way more than the asking price and it was accepted.  So, I asked him to call the listing agent and see if I could up my offer by 10K and have it considered.  He called and was told that the other offer was a done deal and I'm out.

Something about this whole scenario really sounds fishy to me.  I would have thought that even a relocation company would want the listing agent to get the best price possible.  I was prepared to give 20K over the asking price because we are tired of looking at homes and we like this home. 

I know that real estate laws prohibit agents from telling other agents (or home buyers) the dollar value of other offers.  But does the sharing of that information actually go on behind the scenes?

I'm suspecting in my case that the high offer was above the asking price because I know several real estate agents that have told me that it is extremely rare in my city for homes to get into a bidding war, which is usually the way that the asking price is surpassed.  I'm really suspicious that the amount of my offer was compromised.  BTW, my agent doesn't work for the listing agency.

Thanks,
Thomas

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Re: So I made an offer on a house and lost
« Reply #1 on: February 08, 2016, 02:30:01 PM »
Same thing happened to me.  Seller didn't even consider our offer and we offered 10K above asking.  The accepted offer was 20k above asking, which we found out when the sale was publicized.  Sometimes they get a legit offer and don't need/want the hassle.  It might have been a cash offer so they jumped on it.  No need to take it personally.

It happens.  Move on.

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Re: So I made an offer on a house and lost
« Reply #2 on: February 08, 2016, 02:38:50 PM »
Same thing happened to me.  Seller didn't even consider our offer and we offered 10K above asking.  The accepted offer was 20k above asking, which we found out when the sale was publicized.  Sometimes they get a legit offer and don't need/want the hassle.  It might have been a cash offer so they jumped on it.  No need to take it personally.

It happens.  Move on.

Selling a house can be a pain in the butt. Often people accept the first reasonable or good offer they get. A bird in the bush, vs a bird in the hand.

crispy

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Re: So I made an offer on a house and lost
« Reply #3 on: February 08, 2016, 03:01:05 PM »
It sounds like they had already accepted the other offer and so all other offers were off the table altogether.  I don't think that is fishy at all.  You can consider putting in a back up offer just in case this one falls through.
« Last Edit: February 20, 2016, 02:29:01 PM by crispy »

Thomas54

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Re: So I made an offer on a house and lost
« Reply #4 on: February 08, 2016, 03:43:01 PM »
It sounds like they had already accepted the other offer and so all other offers were off the table altogether.  I don't think that is fishy at all.  Yo can consider putting in a back up offer just in case this one falls through.

Yep, I already did that.

FWIW, I just happened to talk to a long time friend who knows the other realtor.  She told me that I had very little chance of beating her out of any commission.  She said that the other realtor is a wonderful woman and that she is the top residential realtor in the area and that if it was her client that made the first offer, I didn't stand much of a chance.

So, FWIW, I'll hope that the deal on the house falls through and I'll get it in a month or so.  If not, I'll just figure that it wasn't meant to be.

Thomas

Bearded Man

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Re: So I made an offer on a house and lost
« Reply #5 on: February 08, 2016, 11:17:41 PM »
I made offer on house sitting a month. Day later someone else comes and makes same offer as I did, got the house. I asked for no closing costs. They stalled for time signing my contract but signed another w same offer.

Thomas54

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Re: So I made an offer on a house and lost
« Reply #6 on: February 09, 2016, 04:03:25 PM »
FWIW, this morning I ran into an old guy at the club that I belong to that was a realtor for many years in his younger days.  He said that if two offers are made, the realtor has a moral obligation, not a legal one, to recommend to the seller, even if it is a relocation company, to ask for a "Best and Final Offer."

The key words there were obviously "moral obligation."

I suspect that the other offer was presented through the listing agent and they didn't want to share the commission with my agent.  Lesson learned on my part.

The good news is that I have a line on another house that may be hitting the market soon.

Thomas

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Re: So I made an offer on a house and lost
« Reply #7 on: February 09, 2016, 04:46:25 PM »
Getting skunked sucks. Don't worry, it hurts a little less every time.
I was in a similar situation last week. My two partners and I had cobbled together an offer on a pretty nicely renovated duplex in our area. We were kinda fishing on terms, but we had spent hours researching and visiting, and we really liked it. The listing agents (frankly, a sloppy husband-wife team) came back fishing for a better offer 18 hours later when they got another, having still NOT shown the seller ours by that point. As our agent, I decided to inform them that we were flexible on terms but would not increase our offer without seller feedback. The seller was a corporate flipper and took the easy deal at asking price.
Whether they ever saw our offer, or were advised of my willingness to negotiate, I'll never know, but their crappy communication and perceived lack of professionalism left a bad taste in my mouth. I was annoyed for a few minutes, but one of my partners was mad for days. Meanwhile, I channeled my frustration into a renewed search, reevaluated some known prospects, and started haggling with another agent to find another prospect.
It's easy to take things personally and imagine all sorts of BS and betrayals when the process is a black box. But either way, what can you do? Win some, lose some, go back out swinging. We're close to finalizing terms on a better deal now. Your dream house is still out there waiting... don't worry, you'll find it, or build it, someday. :D

justajane

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Re: So I made an offer on a house and lost
« Reply #8 on: February 09, 2016, 04:55:21 PM »
My parents bought a house from under another couple. The other couple was going to be stretching financially to afford the home. I don't know how the seller knew this (that part is a little fishy), but because it was contingent with kickout, my parents offered slightly less but as a cash sale. The seller dropped the other couple and sold it to my parents. I feel bad for the couple, but word on the street was that they were relieved. I can certainly understand why, from the seller's perspective, they would sell to my parents. One of the worst scenarios for a seller is having a sale fall through at the last minute because of buyer financing.

sol

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Re: So I made an offer on a house and lost
« Reply #9 on: February 09, 2016, 05:02:47 PM »
Real estate agents, like bookies and repo men, are necessarily corrupt by the very nature of their business.  They have financial incentive to be dishonest, and yet even the honest ones are taking a cut of a deal they have no title to. 

So consider it a lesson learned.  If you're going to play dirty pool, you need a better pool shark. 

I look forward to the day that real estate agents are a forgotten profession, replaced by computers.  If there was ever an industry in need of an internet based shake up, this is it.

zephyr911

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Re: So I made an offer on a house and lost
« Reply #10 on: February 09, 2016, 05:36:28 PM »
Real estate agents, like bookies and repo men, are necessarily corrupt by the very nature of their business.  They have financial incentive to be dishonest, and yet even the honest ones are taking a cut of a deal they have no title to. 

So consider it a lesson learned.  If you're going to play dirty pool, you need a better pool shark. 

I look forward to the day that real estate agents are a forgotten profession, replaced by computers.  If there was ever an industry in need of an internet based shake up, this is it.
I'm licensed in real estate as part of my investing strategy.
Yes and no.
Agree 100% on shakeup, which is already well underway. There are some real shitheads, and some of us earn it. That we're all inherently corrupt is absurd.

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Re: So I made an offer on a house and lost
« Reply #11 on: February 09, 2016, 05:48:18 PM »
Real estate agents, like bookies and repo men, are necessarily corrupt by the very nature of their business.  They have financial incentive to be dishonest, and yet even the honest ones are taking a cut of a deal they have no title to. 

So consider it a lesson learned.  If you're going to play dirty pool, you need a better pool shark. 

I look forward to the day that real estate agents are a forgotten profession, replaced by computers.  If there was ever an industry in need of an internet based shake up, this is it.

I agree with this. It would be cheaper to let sellers show their property after being contacted by buyers directly via Zillow, Redfin, Estately, etc. and when a buyer wants to make an offer, they and the seller each hire an attorney for themselves to help them with the cookie cutter contract.

Save yourself tens of thousands of dollars in fees that you pay to realtors, and for what? To unlock a door and fill out a cookie cutter contract I could easily hire a real estate attorney for less than 1K? Someone with a Juris Doctorate for 1K vs. Jim Bob who quit being a truck driver and is now in the low barrier to entry industry of realtor for 40K per house I sell?

Of course not all of that goes to Jim Bob, he has to split it four ways with the other realtors and their brokers, lol. Yep, because it takes money to buy a house, they know you have it and you get fleeced.
« Last Edit: February 09, 2016, 05:51:03 PM by Bearded Man »

zephyr911

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Re: So I made an offer on a house and lost
« Reply #12 on: February 09, 2016, 06:01:45 PM »
Your resentment isn't entirely unwarranted, but you both oversimplify. Most agents barely earn median income, and for every commission there may be days or weeks of unpaid work.
If it was really so easy and lucrative, I wouldn't still be a fed. For that matter, why not do it yourself if you can earn $40k for a trivial effort?

justajane

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Re: So I made an offer on a house and lost
« Reply #13 on: February 09, 2016, 06:13:34 PM »
Most agents barely earn median income, and for every commission there may be days or weeks of unpaid work.
If it was really so easy and lucrative, I wouldn't still be a fed. For that matter, why not do it yourself if you can earn $40k for a trivial effort?

Isn't this because it's likely an oversaturated market and not because the job itself is that difficult?

I think it should be a set fee and not a percentage of the sale.

sol

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Re: So I made an offer on a house and lost
« Reply #14 on: February 09, 2016, 06:38:17 PM »
I think it should be a set fee and not a percentage of the sale.

Exactly.  Selling a $40k house and a $4million house is the exact same amount of work, and there is absolutely no reason why you should pay 100x for that deal.  None.  The only difference is that the buyer has more money, and can thus "afford" to pay 100x as much.

I'd even be fine with RE agents getting paid a per-hour fee.  Like if you can legitimately book 40 hours of time with a client, standing around while they tour houses and then having them sign paperwork, then by all means charge them for your hourly rate times 40.  That at least puts the responsibility for the cost on the buyer, who can demand (and then choose to pay for) more hand-holding.

But the current system is dumb.  It's an MLS cartel that has no reason to exist, and agencies are a classic MLM scheme designed to extract maximum profit for minimum work.  I despise the entire industry.

justajane

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Re: So I made an offer on a house and lost
« Reply #15 on: February 09, 2016, 06:53:33 PM »
I think it should be a set fee and not a percentage of the sale.

Exactly.  Selling a $40k house and a $4million house is the exact same amount of work, and there is absolutely no reason why you should pay 100x for that deal.  None.  The only difference is that the buyer has more money, and can thus "afford" to pay 100x as much.

I'd even be fine with RE agents getting paid a per-hour fee.  Like if you can legitimately book 40 hours of time with a client, standing around while they tour houses and then having them sign paperwork, then by all means charge them for your hourly rate times 40.  That at least puts the responsibility for the cost on the buyer, who can demand (and then choose to pay for) more hand-holding.

But the current system is dumb.  It's an MLS cartel that has no reason to exist, and agencies are a classic MLM scheme designed to extract maximum profit for minimum work.  I despise the entire industry.

Yeah, a per hour fee could be good. Or sellers could offer bonuses or incentives to realtors for selling a home faster. The only problem I could see with that would be if a seller priced a home too high, no matter what a realtor does, it will sit on the market for longer than a lower priced home.

There was this local realty company in our community that was highly respected, but the more I learned about their tactics, the more I thought they were shady. The first instance I got of this shadiness was when the house next to me, which was in foreclosure, was sold twice in the span of 24 hours (on Dec. 24th nonetheless) internally at Fanny Mae before it landed in the hands of this realty company. The reason I know this is because my other neighbor wanted to bid on the foreclosure, but it never went to the auction table because someone at Fanny Mae (or Freddie - I forget) sold it to the realty company without letting it go to auction. They pocketed 15K for this. This shit happened all the damn time during the 08-10 period.

So, then the realtor company flipped the home, did an absolute crappy job, and then sold it to one of their own buyers for 110K more than they paid. I have often gone to showings in this area and felt like the realty company encouraged sellers to price their homes lower than they could get so that the homes sold faster. Why do they care? They get it off their plate quickly and they still get a sizable commission. Win-win for them.  But this home -- the one that they were flipping -- they sold for more than it was worth and the sellers suffered for this when they went to sell five years later.

Sorry for the rant. I'm sure there are good realtors out there, but I've come across some shitty ones.

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Re: So I made an offer on a house and lost
« Reply #16 on: February 09, 2016, 07:11:52 PM »
I think it should be a set fee and not a percentage of the sale.

Exactly.  Selling a $40k house and a $4million house is the exact same amount of work, and there is absolutely no reason why you should pay 100x for that deal.  None.  The only difference is that the buyer has more money, and can thus "afford" to pay 100x as much.

It also makes it hard for young people / people with a low budget to find a decent buyer's agent. When I bought my house, I had to call around to three different brokerages to find somebody who'd help me, and ended up with somebody who'd only been in the business for maybe a year or so (although he did a decent job). By the time we closed, I think he was working for less than minimum wage...

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Re: So I made an offer on a house and lost
« Reply #17 on: February 10, 2016, 07:20:46 AM »
Many angry conspiracy theorists on this site, seems much more than usual. Probably why I rarely come here anymore.

MMM side gig idea: Recycled tinfoil hats.

zephyr911

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Re: So I made an offer on a house and lost
« Reply #18 on: February 10, 2016, 07:55:58 AM »
I think it should be a set fee and not a percentage of the sale.

Exactly.  Selling a $40k house and a $4million house is the exact same amount of work, and there is absolutely no reason why you should pay 100x for that deal.  None.  The only difference is that the buyer has more money, and can thus "afford" to pay 100x as much.

I'd even be fine with RE agents getting paid a per-hour fee.  Like if you can legitimately book 40 hours of time with a client, standing around while they tour houses and then having them sign paperwork, then by all means charge them for your hourly rate times 40.  That at least puts the responsibility for the cost on the buyer, who can demand (and then choose to pay for) more hand-holding.

But the current system is dumb.  It's an MLS cartel that has no reason to exist, and agencies are a classic MLM scheme designed to extract maximum profit for minimum work.  I despise the entire industry.

Baby/bathwater.

I'll be the first to agree that real estate is cartel-ish, that some of our conventions are deeply flawed, and that there are shady people who exploit the system for personal gain without adding much value. But categorically dismissing the entire business and the character of everyone in it is unlikely to help solve any of those problems.


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Re: So I made an offer on a house and lost
« Reply #19 on: February 18, 2016, 01:46:35 AM »
I am friends with a few realtors, but in every business interaction I've had with realtors there has been an inflection point somewhere along the way where their interests did not align with mine - and they never once failed to present their own interest as the best option for me.

I think many good people are realtors, but the structure of the realty-commission-brokerage system demands, or at least rewards, some degree of shadiness. 

That said, I am currently tainted as my side gig involved, for a very painful year, two of the worst clients in the world (until we fired them) - and they were realtors.  Every interaction was combative and miserable, and they were relentless in their desire to get as much as possible from us for as little as possible.  Bless their hearts.

zephyr911

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Re: So I made an offer on a house and lost
« Reply #20 on: February 19, 2016, 03:05:14 PM »
Bless their hearts! Bahaha... I know the type and I hate 'em all.

I plan to avoid ever becoming one of those agents, primarily by never putting myself in a position where I need to earn XYZ $$ in commission to pay for my needs/wants. Right now every dollar I make is just extra investment money, and I can honestly say I've never felt tempted to steer things against a client's interest for my own gain. If I ever decide to rely on RE to pay the bills, it'll be for a quantity well below my established baseline earnings. I just don't ever want to be one of those people, not just because it's shitty and immoral but also because I think it would completely ruin the fun for me. I really love this stuff and I want to do it for the love, regardless of pay.

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Re: So I made an offer on a house and lost
« Reply #21 on: February 19, 2016, 03:23:11 PM »

This morning, my agent told me that someone had offered way more than the asking price and it was accepted.  So, I asked him to call the listing agent and see if I could up my offer by 10K and have it considered.  He called and was told that the other offer was a done deal and I'm out.


So they made the deal and stuck to it. That is the correct and honest thing to do.

Find another house.

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Re: So I made an offer on a house and lost
« Reply #22 on: February 19, 2016, 08:51:05 PM »
My parents bought a house from under another couple. The other couple was going to be stretching financially to afford the home. I don't know how the seller knew this (that part is a little fishy), but because it was contingent with kickout, my parents offered slightly less but as a cash sale. The seller dropped the other couple and sold it to my parents. I feel bad for the couple, but word on the street was that they were relieved. I can certainly understand why, from the seller's perspective, they would sell to my parents. One of the worst scenarios for a seller is having a sale fall through at the last minute because of buyer financing.

They may have mentioned it to the seller's realtor.   They may have let that knowledge be freely available on their Facebook page.   I suspect that good realtors learn how to gauge which folks will get the financing to do the deal and which won't.

Back in the 90's we put in an offer for a house.  There were two other offers already outstanding on the house and ours was the lowest offer.

The sellers sold to us.

Why?

Because the house had been on the market for some time and it had been under contract several times before.  Each prior time the deal didn't go thru because the financing fell thru.

Our financing was rock solid and our realtor knew it.   We had no debt other than maybe one car payment on an inexpensive car and the house was selling for $135,000.  Our income as probably around $80,000 at that time.   

The seller didn't want to be left standing at the altar one more time.


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Re: So I made an offer on a house and lost
« Reply #23 on: February 20, 2016, 09:40:23 AM »
Stuff happens. If they had already signed the contract before you came in with your better offer, they signed a contract. You could have shown up with and extra $50k, but they signed a contract.

I sold a house that had been on the market for 6 weeks with tepid interest. I was literally talking with my wife about dropping the price when an offer came in. As my realtor was driving over to deliver the details/paperwork to sign, a second offer came in.

Seriously, 6 weeks of nothing, then 2 offers in 30 minutes. Crazy stuff happens sometimes. When we told them both there were multiple offers, I seriously doubt they believed us. I wouldn't have. Neither party significantly changed their offer, and the house sold without drama.

Keep looking. Stuff happens. Maybe you'll be buying it in a month. Maybe not. And no matter what, it wasn't personal.

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Re: So I made an offer on a house and lost
« Reply #24 on: February 22, 2016, 06:16:46 PM »
Your resentment isn't entirely unwarranted, but you both oversimplify. Most agents barely earn median income, and for every commission there may be days or weeks of unpaid work.
If it was really so easy and lucrative, I wouldn't still be a fed. For that matter, why not do it yourself if you can earn $40k for a trivial effort?

So using that logic, the people who buy and sell should subsidize the income of realtors on behalf of all the Lookie Loos who didn't buy or sell? A lot of real estate oriented professions, such as being a property manager go through the same time waste of showing units with no "sale". The difference is, they get paid a small, flat salary or hourly fee by the company they work for, not a 40K commission for unlocking a door and filling out my name on a contract, ticking a few boxes and sending an email. Why does the realtor get paid so much more? It's not like they have to have Masters degree to do it but PM's don't.

Let's expand this with another example, so you can more easily see how absurd realtors fees are. Suppose Matt does home remodeling. He remodels 10 houses, but only charges ONE house anything. That one house pays for all the work Matt has done on 9 other peoples houses.

Again, as I said before, it makes more sense to cut this middle man out. There is no reason that a buyer and seller cannot deal directly using contact info on listings, using their attorneys and the title company for the legal stuff. Again...I'd rather spend 1K hiring a person with 7 years of education to do my contract, than High School Joe for 40K. Nobody is asking agents to work for free. It's just that the fees are patently outrageous, and I seriously question the judgement of any person who thinks that they are in ANY way fair to the person who has to pay that fee.

Your solution seems to be really narrow trying to justify this BS, whereas what I'm saying is we don't need High School Joe. I can unlock the door and show my house myself, just like I have dozens of times to rent my properties. I don't need a person with almost no training to try to do something anyone with working eyes, ears and hands can do.

Why wouldn't I go do it if it is so easy? Read my threads, I actually plan to. I'm an Engineer, there is a higher barrier to entry in my line of work, so it's not something I just give up at the drop of a dime to go play with the high school educated folks (the realtors I've worked with have only a high school diploma, it doesn't require a college degree, so it has a low barrier to entry). But when the time is right, I too will cash in on this scheme while it lasts.

Dicey

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Re: So I made an offer on a house and lost
« Reply #25 on: February 22, 2016, 10:24:39 PM »
When I listed my house for $539k, I received multiple offers, including two for $600k, with similar terms. I chose the second offer. Why? The second offer included a lovely letter complete with a family photo. The other family's kid ran rampant through my house and left handprints everywhere. With everything else being equal, I went with the buyers who made the better impression. I loved my house and had worked hard on it. I wanted to sell to someone who would appreciate it. My realtor had no say in which buyer I chose, she just presented the offers.

It's important to get pre-approved for your mortgage and include the pre-approval letter in your offer. This is not the same as pre-qualification. You will actually have to work with a lender to get this, but it assures the seller that you have actually been approved for a mortgage. Next best thing to paying cash.

Another tip if you aren't paying cash, but do have more than just the down payment is to say you will pay the difference at closing if the house doesn't appraise. In a strong market with little inventory, sometimes appraised values lag a bit, and this is a way for you to assure the seller you won't walk if it doesn't appraise. Just be sure not to actually overpay for the house:-)

I have heard of a tactic whereby you include in your offer a clause that you will pay X amount over the best offer. I wouldn't do it, because how would you ever know if you were beating a real offer or that the other party could even qualify for the loan at the price they'd offered?

Be patient. Your new house, at the right price, is out there.

zephyr911

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Re: So I made an offer on a house and lost
« Reply #26 on: February 25, 2016, 09:16:18 AM »
So using that logic, the people who buy and sell should subsidize the income of realtors on behalf of all the Lookie Loos who didn't buy or sell?
My logic was about the "is", not the "should". I've said before and will continue to say that I welcome a restructuring of the business model. It constitutes a poor linkage between compensation and value added.
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Let's expand this with another example, so you can more easily see how absurd realtors fees are.
Preacher, this is the choir ;)
I didn't say it was a great way of structuring compensation, I said it's not lucrative for most, which remains a relevant counterpoint to the idea that these people are overpaid for what they do.
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Again, as I said before, it makes more sense to cut this middle man out.
And everyone, everywhere, is welcome to do that already. When this stuff comes up in threads here, I generally take a "more power to you" approach when someone considers DIY/FSBO/etc. Anyone who has the skills, knowledge, and spare time to forego paid professional help in any arena should probably do so. They're also welcome to renegotiate terms of compensation, which is happening to a degree in some markets.
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Your solution seems to be really narrow trying to justify this BS, whereas what I'm saying is we don't need High School Joe. I can unlock the door and show my house myself, just like I have dozens of times to rent my properties. I don't need a person with almost no training to try to do something anyone with working eyes, ears and hands can do.
I've said all along that I don't support the status quo. I'm advocating a rational middle ground between business-as-usual and throwing the baby out with the bathwater. Compared to most licensed agents, I'm on the lunatic fringe, which is why I chafe at being lumped in with the cartel just for suggesting that some agents legitimately earn their paycheck.
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Why wouldn't I go do it if it is so easy? Read my threads, I actually plan to.
I recall you mentioning the possibility. Hadn't noticed a post about a decision, per se.
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But when the time is right, I too will cash in on this scheme while it lasts.
Have you considered that this kind of thinking somewhat undercuts your moral outrage?