This Week In Reader E-Mail

Rarely does a reader express his sentiment so cogently as in this case, from one “Fred Peck”:

Your article that tries to shed light on Realtors is probably the dumbest and most pointless thing I have ever read. Rogue economists, huh? You idiots sound more like cynical morons that think they know everything. I guess I’m the fool, though. You guys are the idiots that are selling books with this kind crap in it.

May you be burned in every real estate endeavor you are involved in…hopefully as a know-it-all FSBO with infinite knowledge created in your own warped mind. Heh. Idiots.

Happy Tuesday, everyone. You too, Fred.


rapzor

Is he a Realtor by at chance?

kyle

definitely not one who likes their secrets exposed

cthayler

It's like he didn't even try to understand the point you make. Why do so many people do this when listening to economists? They take the end result, ignore all the logic that got you there, then call you stupid. Why are people so dumb?

ftelegdy

A Google search for "'fred peck' realtor" DOES turn up a realtor as the #1 result.

Of course, there's no way for us readers to know if this is the guy or not, so PLEASE don't email him. It's just interesting. :)

Taed

Hey, I just did the same Google search and was going to post the same result! Drat, beat by 25 minutes!

slim

Well, some of the things Levitt and Dubner, but Dubner in particular, have done are quite trivial, but the authors make them out to be a hard science. One that comes to mind is Dubner's "The Freakonomics of Riding a Bus." I bet Dubner was saying to himself, "This would make a good blog entry - I'll write about how I used my "freakonomics" skills to take a bus more efficiently." Please. That is called using LOGIC, and people use it every day. Dubner must think being an economist is so easy, but I would like to see him try to get a PhD in Econ and he would realize he can't handle the math.

furiousball

I've stated this before, but Realtor is actually Latin for "do nothing but collect 5%"

Chewxy

Slim - logic is almost always counter intuitive.

Common sense tells you that you need a lot of people in the same room as you to have someone share the same birthday as you, but in actual fact, it only requires 22 people for a 50% chance for 2 people to share a birthday in a room.

And no, people do not use logic everyday. If people used logic everyday, we'd be living in some sort of quasi paradise already.

editorguy

Science-based or not, "Fred Peck" knows the truth -- that his profession, through smarmy tactics, backbiting and a smugness that I have found to be simply stunning -- is dying. Realtors (don't forget that capital "R"!) are in general untrustworthy; I'd put them perhaps slightly above corporate lawyers and insurance executives.

And Fred? If you Google "drinking while blogging," you may find the help you need. See you at the next open house, pal.

goinglikesixty

Methinks he doest protest to much.

Actually editorguy? Isn't REALTORS® all caps?

Ian Ferrel

"Common sense tells you that you need a lot of people in the same room as you to have someone share the same birthday as you, but in actual fact, it only requires 22 people for a 50% chance for 2 people to share a birthday in a room."

But those are completely different questions. In order to have a 50% chance of someone sharing a birthday with you, logic tells me you need 253 other people in the room. Common sense tells me that's a lot.

kah

Honorable real estate agents do not denigrate FSBO sellers or buyers without agents.

A FSBO seller or a buyer without an agent could be the seller or buyer that produces the best outcome for their client.

bmc

NOW that entertainment!

egretman

Oh god, I see another 70 comments about how realtors s*ck. What else can this blog possibly say about them that hasn't been said? Can we all just take the opposite side of the argument? Just for fun?

Real estate agents are the best.

Josh

Thank goodness it was concise.

Josh

And now I leave another message: I'm with you Egretman. I had to close on a house in 60 days in a town I'd been to for a total of 48 hours previously. I flew into town, my agent took me to see 20 houses in 36 hours, I made an offer before I flew out, and we closed on the perfect house for our family 30 days later. That Realtor absolutely earned his 2.5%!

Sledge

Haha. He's right.

bdk

editorguy:

"Realtors (don't forget that capital “R”!) are in general untrustworthy; I'd put them perhaps slightly above corporate lawyers and insurance executives."

Really? Corporate lawyers are untrustworthy? Like the ones who structure M&A? Even if you mean litigators for tobacco and firearms companies, it seems they are some of the most trustworthy people out there; they are simply faithful to entities most don't like.

I know nothing about insurance executives.

billyboy

A word about agents, FSBOs, and the future, IMHO, as I have been in and around the industry a good part of my life.

The value of real estate is what a willing buyer will pay and a willing seller will accept - period. The industry spends a lot of effort convincing people that an agent is the "best person" to evaluate the market, go through the "comp" process to determine the best sales price, market your house on the MLS, etc. Agents say "FSBOs are usually overpriced" but who cares, as long as the parties ultimately agree on a price? Levitt & Dubner's study of agents holding out for higher prices on their own homes is the FSBO mentality at work ("my house is worth more"). It would be an interesting study to compare actual average sales prices of non-agent FSBOs to real estate agent FSBOs.

Percentage fees are "high" in part to compensate for all the hours spent prospecting for new clients. The deal that actually goes through is the one that pays all those non-fruitful hours. The result is that buyers tend to devalue an agent's time (they're not "paying" for it), while sellers tend to want every ounce of value they can get for the huge commission they are paying. If people were willing to pay hourly for the knowledge and advice that a real estate agent provides, the commission structure might go away some day (as would many agents who live for thrill of "the deal"). Smarmy agents would fall by the wayside, because they have nothing of value to sell. Which leads to my last point....

The one-room schoolhouse is dead. Our education system is still largely built on the idea that you go to one place to learn, because that's where the knowledge lies (either in the books or in the teacher's brain). So "knowledge-hoarding" industries, like real estate sales, are dying too. Now that information is everywhere 24x7, the question is simply how do I discern fact from fiction, and what's my time worth vs. paying someone I trust to do it for me? Everyone has their own idea of the value of their time, and real esate agents like Mr. Peck apparently don't "get" that the value equation is rapidly changing.
In my state, residential real estate agencies are now required to offer an option known as "facilitation," which I have used. For a flat fee of about $1500 you can pay someone knowledgable to help you transact the paperwork and set up the closing. You're on your own as far as the "market knowledge" and financial advice goes.
This is the future for a larger portion of real estate transactions. Not much different than buying a car. But many livlihoods with strong lobbies are at stake and they will not down without a fight.

Watch out lawyers, you're next.

Read more...

Chewxy

Ian - okay... maybe I phrased my question wrong lol.

Shouldn't have used the birthday paradox as an example.