Homebuying Questions

[merithyn]

the commission was 6% total no matter how many agents were involved.

Oh! Good to know! Thank you!

[Barrister]

Whatever. Doing the paperwork is great but I still would not trust them blindly. If they are getting a % of the sale price their financial incentive is to have you pay out as much as you can, not to cut you a good deal.

In reality, that's not a  big concern.  6% of a few thousand isn't much.

But you do have to remember that a RE agent's incentive is to make sure there is a sale.  They'll never tell you to wait.

[Sheilbh]

There's fundamental misconception at work here.

In NA, they are not estate agent, they are realtors.

Yeah just looking up some of the differences and it is extraordinary. In NA realtors are licensed and have things like "codes of ethics" - ethics is not a word I associate with our estate agents

There's no licence or qualification here, it's a sales job - just like recruitment - and commission driven which could cause ethical challenges if anyone cared. They're very loosely regulated and mainly around not fiddling with client money. Aside from that it's just stuff like trading standards and unfair contract terms. A very different world

[DGuller]

Whatever. Doing the paperwork is great but I still would not trust them blindly. If they are getting a % of the sale price their financial incentive is to have you pay out as much as you can, not to cut you a good deal.

In reality, that's not a  big concern.  6% of a few thousand isn't much.

But you do have to remember that a RE agent's incentive is to make sure there is a sale.  They'll never tell you to wait.

Yeah, if anything, the incentives go the other way.  The agent would rather sell 5 $500,000 houses than 1 $600,000 house, and I'm sure that selling a $600,000 house for $500,000 would require very little legwork.  The owner of the house would much prefer the $600,000 sale price over $500,000 sale price, however.

[Tamas]

Well I am glad realtors are a bulwark of fair practices and genuine care for their clients in America, sounds like a noble profession untouched by the temptations that naturally come with the high value transactions they have great influence over.

This order of knights though have so far failed to export their noble practices and undaunted dedication to business ethics to my side of the world, I am afraid.

[merithyn]

Let's just say that after the 2008 housing crisis, realtors and lenders have become much less pushy about getting people into houses they can't afford. Or so I've heard from several friends.

[Valmy]

Well I am glad realtors are a bulwark of fair practices and genuine care for their clients in America, sounds like a noble profession untouched by the temptations that naturally come with the high value transactions they have great influence over.

This order of knights though have so far failed to export their noble practices and undaunted dedication to business ethics to my side of the world, I am afraid.

Dude most realtors range from unethical to dangerously incompetent. I am just saying a good one is a must if you want to get a good deal.

But in Meri's price range and location it may not be so important. A mediocre realtor may be all she needs.

[grumbler]

The advantage of employing your own real estate agent, even if they are going to be paid buy the seller and are thus serving the seller's interest, is that your agent wants to show you the house you want to buy, not the one they want to sell.  A good buyer's agent will quickly get an idea of what you want (they'll ask some questions, then show a few places, and ask what you like and don't like about each place.  Very quickly, you are in a position where you are only seeing places you'd like to buy.  The seller's agent has no incentive to show you places you wouldn't buy, as it is costing them valuable time.

And the seller will pay them, because the 6% fee is split if there is a buyer's agent and a seller's agent (I don't know what the split is).  You just have to be extra careful when dealing with a property sold by the same company as your agent works for, because your agent may have an extra financial incentive to sell you that place.

[Tamas]

So Brits and other wise people: There is this stamp duty holiday until March 2021 that is conveniently helping skyrocket prices in our area out of realistic reach for us.

Am I right to read the situation as actually hold off and wait until after the holiday has expired, since FOMO (fear of missing out - I am learning young people's lingo!) no doubt will continue pressure the prices upward until that date? And most pent up demand must be gone by then, with no-deal Brexit ramifications becoming obvious as well.

[Richard Hakluyt]

I would be tempted to wait for the expected rise in unemployment; with a few million on the dole surely there will be repossessions and price falls  ?

Or maybe not; house prices are very sticky downwards in the UK.

[crazy canuck]

So Brits and other wise people: There is this stamp duty holiday until March 2021 that is conveniently helping skyrocket prices in our area out of realistic reach for us.

Am I right to read the situation as actually hold off and wait until after the holiday has expired, since FOMO (fear of missing out - I am learning young people's lingo!) no doubt will continue pressure the prices upward until that date? And most pent up demand must be gone by then, with no-deal Brexit ramifications becoming obvious as well.

If an analogy from the market around here is in any way accurate, the market has inflated because of direct government infusion of cash and very low interest rates along with a perception that we had beat COVID - reality has begun to sink in about COVID and government direct cash infusions are coming to an end - as a result the housing market is starting to decline.  Personally I am waiting to see if the predictions of a market decrease will actually happen this time.  This time I think it is likely.

[Sheilbh]

I would be tempted to wait for the expected rise in unemployment; with a few million on the dole surely there will be repossessions and price falls  ?

Or maybe not; house prices are very sticky downwards in the UK.

Yeah. I also think the stamp duty thing is helping create little bit of a bubble (which is its purpose) so I probably wouldn't buy now unless I was already in the middle of a purchase - so I know some people who were buying and are now basically able to redirect £5k or whatever to a new bathroom instead (again the purpose of the tax cut).

I don't know that house prices will fall much though. As you say they tend to be quite sticky, I think we're still a country of aspiring landlords ( ). Plus we have a combination of years of construction below the rate of population growth and low interest rates which feel unlikely to change quickly and both probably drive prices quite a lot.

[Malthus]

So Brits and other wise people: There is this stamp duty holiday until March 2021 that is conveniently helping skyrocket prices in our area out of realistic reach for us.

Am I right to read the situation as actually hold off and wait until after the holiday has expired, since FOMO (fear of missing out - I am learning young people's lingo!) no doubt will continue pressure the prices upward until that date? And most pent up demand must be gone by then, with no-deal Brexit ramifications becoming obvious as well.

If an analogy from the market around here is in any way accurate, the market has inflated because of direct government infusion of cash and very low interest rates along with a perception that we had beat COVID - reality has begun to sink in about COVID and government direct cash infusions are coming to an end - as a result the housing market is starting to decline.  Personally I am waiting to see if the predictions of a market decrease will actually happen this time.  This time I think it is likely.

Could be - The problem is that demand hasn't gone away. A real decline will only happen if people largely don't want it to happen!

Right now, so many people are wishing, hoping for a decline. Why? Because they *want* to buy. This makes me think that a downturn will result in high demand, and so not lead to a significant 'bubble bursting' type of downturn.

[Richard Hakluyt]

Another possibility is that the housing market may remain broadly flat but with interesting structural changes. The big cities look a lot less attractive now that social life is so crimped; an increase in working from home will favour smaller cities/towns and suburbs perhaps.

[Zanza]

In Germany there are already noticeable structural changes in the last few months. The first ring of suburbs is where prices are rising now whereas the inner cities are stagnant and rents are slightly declining.