The mortgage and housing industry is just a big grift anyway. If we look at a $400k house purchase, as typical two real estate agents make $12k each, a mortgage broker or the bank or both make $4-12k ish. A title company makes $2k, an appraiser makes $500. Then there's another $2k of other random fees going to someone. That's all before the government gets their cut or a dime of interest is paid. Then a lot of people will have a PMI payment so they get their cut too. There's too many people that have their hands in the pot, and a lot of them don't need to get paid a percentage either. They do the same work for $200k vs $400k vs $800k but get a percentage?
Then you look at this stupid thought of extending mortgages. Just for shits and grins I ran some numbers. This is for a $400k loan at 6.5%
Payments are:
15-year - $3484
30-year - $2528
50-year - $2254
100-year - $2169
Of course they want longer mortgages. I think the average life of a mortgage is less than ten years. What does that mean for the bankers? Well let's assume you have each of these and pay 10 years. You will have paid this much in interest
15-year - $196k
30-year - $242k
50-year - $255k
100-year - $259k
Oh look they make more? So when you buy a house, live it in ten years and sell it, if you assume a typical profit over that time, the bankers still get their money AND more of yours. If you're talking like this as 50 versus 100, all for a difference of less than $100 a month.
Want to fix the housing industry? Fix all the process of buying and cut the grifters.
Real Estate agents exist because everyday people, and the banks don’t want to spend the time advertising and shilling the property, so they hire people to do that for them, so that’s actually reasonable. It’s the same reason why most people will trade a car into a dealership instead of trying to sell a used car themselves; the “lost money” isn’t worth as much as the time saved not having to hassle over values.
An appraiser values the house, who also exists for similar reasons as to real estate agents.
The rest I don’t know because I’m not as tuned into the housing market as I am cars, but real estate agents and appraisers have actual purposes existing.
Yeah I wouldn't argue either of those don't have a purpose. I don't really see why their compensation needs to be tied to the price. It's a conflict of interest for the buyer for one.
Many of the things in the process have a purpose, it's just overly drawn out and ridiculous. A LOT of money is made on the front end of a mortgage, after which it's sold off to investors and no longer even a risk for the bank.
Real Estate agents exist because everyday people, and the banks don’t want to spend the time advertising and shilling the property, so they hire people to do that for them, so that’s actually reasonable. It’s the same reason why most people will trade a car into a dealership instead of trying to sell a used car themselves; the “lost money” isn’t worth as much as the time saved not having to hassle over values.
That, and filter out the window shoppers wasting your time. If an agent is talking to another agent, there's a good chance the buyer is already pre-approved for a loan and serious about buying.
The mortgage and housing industry is just a big grift anyway. If we look at a $400k house purchase, as typical two real estate agents make $12k each, a mortgage broker or the bank or both make $4-12k ish. A title company makes $2k, an appraiser makes $500. Then there's another $2k of other random fees going to someone. That's all before the government gets their cut or a dime of interest is paid. Then a lot of people will have a PMI payment so they get their cut too. There's too many people that have their hands in the pot, and a lot of them don't need to get paid a percentage either. They do the same work for $200k vs $400k vs $800k but get a percentage?
Then you look at this stupid thought of extending mortgages. Just for shits and grins I ran some numbers. This is for a $400k loan at 6.5% Payments are: 15-year - $3484 30-year - $2528 50-year - $2254 100-year - $2169
Of course they want longer mortgages. I think the average life of a mortgage is less than ten years. What does that mean for the bankers? Well let's assume you have each of these and pay 10 years. You will have paid this much in interest 15-year - $196k 30-year - $242k 50-year - $255k 100-year - $259k
Oh look they make more? So when you buy a house, live it in ten years and sell it, if you assume a typical profit over that time, the bankers still get their money AND more of yours. If you're talking like this as 50 versus 100, all for a difference of less than $100 a month.
Want to fix the housing industry? Fix all the process of buying and cut the grifters.
Real Estate agents exist because everyday people, and the banks don’t want to spend the time advertising and shilling the property, so they hire people to do that for them, so that’s actually reasonable. It’s the same reason why most people will trade a car into a dealership instead of trying to sell a used car themselves; the “lost money” isn’t worth as much as the time saved not having to hassle over values.
An appraiser values the house, who also exists for similar reasons as to real estate agents.
The rest I don’t know because I’m not as tuned into the housing market as I am cars, but real estate agents and appraisers have actual purposes existing.
Yeah I wouldn't argue either of those don't have a purpose. I don't really see why their compensation needs to be tied to the price. It's a conflict of interest for the buyer for one.
Many of the things in the process have a purpose, it's just overly drawn out and ridiculous. A LOT of money is made on the front end of a mortgage, after which it's sold off to investors and no longer even a risk for the bank.
That, and filter out the window shoppers wasting your time. If an agent is talking to another agent, there's a good chance the buyer is already pre-approved for a loan and serious about buying.