Didn’t your daddy ever tell you, “There’s no such thing as a free lunch.”? He was absolutely correct. He also probably paid for way too many people’s lunches. Nothing is free. This is true. Practically speaking, however, this means very little. We already know someone is going to pay for lunch. The question is “Who?”
In an ideal world, the person paying for the lunch would be the same as the person eating the lunch. But as you already know, this is not the case. Fortunately for you, I am not going to waste the next five minutes of your valuable time discussing the societal dilemmas facing the modern world or philosophizing about the source of my lunch. What I am going to do is help you pay for a few less lunches - approximately 1,600 fewer lunches, to be more specific.
Free lunches and MLS databases?
Let’s talk about the real estate industry. In the past, this industry has effectively been hide-and-seek meets risk management. With the emergence of the internet, and more recently, the advent of public access to MLS databases, the hide-and-seek aspect has all but disappeared. What does this mean? In pre-internet times, you and the buyer/seller of your home were paying the real estate agent to help connect the two of you. There are only so many people looking to buy/sell, and you had no legitimately effective way of finding them, so you paid an agent to do it for you. And of course, there were the contractual technicalities to consider; an agent would take care of that as well. But nowadays, you can quite easily find buyers and sellers yourself via the internet. So effectively, you and your transactional counterpart are paying 6 percent of the transaction price to a third party for the sole reason that you don’t trust each other.
The numbers
Think about it. If the average home costs $275,000 (it does), you and the buyer/seller are paying $8,250 each, a combined $16,500 as a penalty for not trusting each other. If you trusted each other, you could simply browse your local MLS listings, meet each other online, have the bank draw up a basic contract, sign it, shake hands, transfer the money, and call it a day. You wouldn’t have to worry about an airtight contract, safety clauses, exhaustive house inspection, or any of the other annoying little things you pay eight grand for your agent to worry about.
Final thoughts
Am I suggesting you ditch your agents, lawyers, etc. and just wing it with your fellow man. 100% NO! What a dumb suggestion. Have you even met people? They’re literally just the worst. In all seriousness…no, I am not suggesting that. I am merely pointing out the absurdity of the fact that we pay that steep of a penalty for not trusting each other. I’m also hinting at the idea that, should you find an alternative way for either A) obtaining a level of character assurance on your associated buyer/seller or B) legally safeguarding yourself against unsavory action on the part of your associated buyer/seller, you could tell your real estate agents to take a hike and save yourself eight grand. And who doesn’t want an extra 8 G’s?
Tiffany Olson loves to write, read, play jump rope and watch the sun set. During the day you can find her hunched over the keyboard, writing away about many various topics. One of the most exciting being Redding MLS listings. Sounds exciting, right?!
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