This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.
Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.
We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:
-
Shaming.
-
Attempting to 'build consensus' or enforce ideological conformity.
-
Making sweeping generalizations to vilify a group you dislike.
-
Recruiting for a cause.
-
Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.
In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:
-
Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.
-
Be as precise and charitable as you can. Don't paraphrase unflatteringly.
-
Don't imply that someone said something they did not say, even if you think it follows from what they said.
-
Write like everyone is reading and you want them to be included in the discussion.
On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.
Jump in the discussion.
No email address required.
Notes -
Can somebody steelman a buyers agent for me? They are paid as a percentage of the total cost of the sale, so aren't they incentivized to negotiate against their purported clients?
Agents always seem to have weird incentives. Reputation of course matters more than anything for more business.
The converse to a % would be an hourly wage for giving advice and finishing processes (like a Lawyer) but that system would encourage buyers agents to not close deals and instead have deals fail but keep the billable hours up.
Reputation to get more clients is the only thing that works to align client/agent incentives since every incentive system I see for agents in one-off deals would have misaligned incentives.
If I had to steelman buyers agents it’s probably something like they need to exists and most buyers have a need for the specific service to varying extents. The exact compensation structure is hard to perfectly align incentives.
Even if I am buying the simplest of real estate purchases say a condo in a 300 unit property and looking at a few similar sized buildings it would still take me hundreds of hours to figure out costs/benefit trade offs while a buyers agent who specializes in large condo buildings in a neighborhood should have built up a strong feel for relative value in those buildings. Maybe it takes 200 hours to gain pricing knowledge of condos in a neighborhood but if they have 20 clients/year for multiple years they spread that fundamental research time down to sub <10 hrs per client.
Why do they need to exist in the age of the internet? It’s way less overhead to hit up Zillow for leads than it is to coordinate with an agent. You’d still have an appraiser, inspector, title insurance and a bank guarding the interest of the buyer. Earnest money protects the seller. If you need coordination, a one time fee is most appropriate. Residential real estate agents pattern match to cars salesmen who are strictly negative value. They artificially inflate the cost of automobiles via unwanted human interaction and likewise exist due to cartels.
As for pricing, Zillow or the equivalent will tell you the price and estimated price since the last sale of every property in your city from a birds eye view, often with photos from the previous sale. In my metro, there is no way the average buyers agent adds 30k of value - maybe a couple of grand is reasonable. On the sellers side, a one time fee also makes more sense to do staging, photos, and listings.
I got no disagreement that most deals can probably work on a bare bones style agent.
I was more steel-manning why they should exists versus why they should exists at a 3% commission.
A very small percentage of buyers agents likely do deserve 3%. There are unique projects that require far more expertise. If some platform rolled up buyers agents, paid them a salary, and charged 1% buyers fees I feel like that business model can work. To date that model has not work perhaps due to restrictions etc from the old ways.
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
Naive people think "they are paid more if it sells for more, and it is in my interests that it sells for more". They ignore that the agent wants to make a maximum profit per unit time, not a maximum profit per sale.
This assumes an infinite supply of potential sales. In practice I would expect to optimize over some denominator which combines time and sales, emphasized differently based on how saturated the market is.
Regardless, this doesn't address the main issue that the buyer's agent and seller's agent have near-identical incentives: have quick sales with high prices. The only distinction is that the buyer's agent's ability to market their services to future clients is correlated with low prices, but I'm not sure how strong of a correlation that is.
More options
Context Copy link
More options
Context Copy link
That's right. The only countervailing force is that they want to close a deal sooner rather than later to get paid, so they won't hold out for arbitrarily small increases in price.
More options
Context Copy link
More options
Context Copy link