darthjude

[deleted]

Drat- I missed this???? HOW DID I MISS THIS!!!! Silly work...

On the off chance - I believe that the real estate transaction is one of the most inefficient transactions known to man. What are your thoughts on how the transaction costs (from the value added ones to those that can be defined as pure rent seeking) of the transaction affect the market? The way that a lot of the incentives are set up in the transaction creates sub optimal results.

Take for example the home inspection process. The realtor is the home inspectors (HI) client, not the home buyer. The realtor engages HI's that can provide generally desirable results defined as finding huge issues where they exist but more often finding a couple small things that show value but don't hold up the closing process. Their liability is limited to the cost of the inspection in many areas. Without dragging this out with math and such - they can afford to refund a fee or two if they do a good volume, which is a result of 'good' relationships with realtors; which is predicated on my points above.

This same issue existed 10 years ago with appraisers and has been addressed for the most part with clearing houses. If we can identify the fiduciary control issue with appraisers why can we not deconstruct the entire transaction and make it more efficient?