From patrick.net:
Favorite Realt-whore Cliches
It’s not a house it’s a home.Buy now or you’ll be priced out forever.Renting is just throwing your money away.You have to live somewhere.They’re not making any more of it.Real estate never goes down.You’re just kidding yourself if you’re waiting for prices to fall.Never a better time to buy!I think you have a deep-seated fear of commitment.Never try to time the market (when it’s falling).It’s different this time._(insert location)_ is so desirable, people will want to live here no matter how expensive it gets.Boomers/immigrants/rich people will keep prices permanently high.Prices have achieved a permanently high plateau/new paradigm/soft landing._(insert location)_ is land-locked.If you’re waiting for the perfect time to buy, you’ll be waiting forever.You can’t lose in real estate –it’s a no-brainer.Real estate’s seasonal; after _(insert holiday)_ things will return to normal.The last housing drop was caused by _(insert unique, non-repeatable event: 9-11, collapse of Soviet Union, earthquake, hurricane, etc.)_; it’ll NEVER happen again.STOP LOW-BALLING! STOP!! I REALLY MEAN IT!!!
From Ben's blog:
And the New York Times has a report on just this subject. “As it turns out, most agents don’t make very much money during a boom, because of one simple fact: the boom attracts way too many of them. Over the past 10 years, membership in the N.A.R. has risen by more than 75 percent. And why not? Compared with most professions, becoming a real-estate agent is quick, cheap and relatively painless. In economics, this phenomenon is known as free entry.”
“The second reason to feel bad for real-estate agents is even more dire: their very profession is about to join the endangered-species list. Think back for a moment to 1999. Travel agents still roamed the earth in vast numbers. So did stockbrokers. But their business models were being blown apart, largely by the Internet.”
March 05, 2006
Nice to see patrick.net and housingbubble2 pick up on our realtor-bashing
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4 comments:
KEITH,
Thanks for all your work on this blog. It helps me to maintain my sanity after looking for the last 2 years in Scottsdale, AZ, for the most modest patio home right as the boom started. I felt there was something wrong with me! Keep up the good work. We need it especially here in AZ (your favorite place). Why did you move to London?
As far as your dislike for realtors is concerned, I don't understand it exactly. Didn't you make a boatload of $ on your condo? Most of us weren't so lucky or even property owners. Certainly, most realtors come from the bottom of a dumpster (I met a few in north Snottsdale). But alot of dentists, doctors and 99% of attorneys and members of a certain political racket are the biggest, scariest creatures in the universe. Not to mention the "religious" un-right, etc. So, why the fixation on the realtors. Is it only because this is a housing site?
Thanks again for the site!!!
I always leave myself an out - that there's some percent - 1%, 2%? of realtors who are wonderful people, who do the best they can for their clients, who have their client's best interests at heart, not their 3%.
And who went to college, have intelligence, and simply decided to get into real estate
But, the other 98%?
It's the system that is rigged against the profession:
1) Commissions almost guarantee that the realtor will say whatever they have to say to sell a house - even if that means screwing their client. Take a look at the 7% commission that one developer is now paying. ANY realtor who takes that 7% is scum
2) It's so easy to get your realtor licence, that every loser in town is now a realtor. This pollutes the profession
3) The internet - this has made 90% of the realtors' value worthless.
4) The hair, the surgery, the makeup, the leased lexuses. If lawyers or accountants looked like the freakshow realtors generally look like, they wouldn't be respected either
5) the national association of realtors - this corrupt cesspool of disinformation (whose biased quotes are continually picked up by the press) contributed big time to the bubble with their endless cheerleading
That's about it. And actually, as luck would have it, the three realtors i've used in Phoenix were all really good people (as people) - and I believe took my best interests to heart. But looking around at their peers - I just think I got really lucky
It's a natural progression in American business efficiency to cut out the middleman. There are few distributors between suppliers and large-scale retailers and the realtor is the last middleman between buyers and sellers.
Realtors do offer a tangible benefit & service but the low barriers to entry have diluted that value. Why should I trust someone who read a book and passed a test to tell me the neigborhood is safe and property values are secure? Isn't that something I can perceive by driving around and pulling crime statistics at any local police station?
The only way for Realtors' to save themselves is to make it damn difficult to get into the profession. Weed out the opportunists and con artists and they might have a fighting chance. Else they will be in the unemployment line with their travel agent bretheren.
(RE travel agents - even large corporations are using technology - we use Expedia corporate and they fired the travel office staff)
The comments from Patrick's website actually sound a lot like my boomer parents. They are so set on cashing their home out in a couple of years for retirement that they feel they need to continue this pyramid scheme into the next generation. Without us first time future buyers out there, who's going to fund their retirement? Surprisingly, the 50-60 year olds out there, aren't looking after us (half their age), their trying to sink us into debt.
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