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He seems to presume that sellers (or sellers’ agents) know the ‘right’ price and are deliberately pricing ‘wrong’. But no one knows the ‘right’ price for a specific home in a specific location at a specific time until that home sells to a willing and able buyer.
Location-, Size-, Amenity- and Time-Comparable sales can be useful indicators of what a house’s actual sales price will be. They’re not precise.
And even if comparable sales were a precise indicator, it’s usually a bad strategy for the seller to ask what they expect the actual sales price to be. In some markets, buyers expect to negotiate down from the asking price. If you ask the expected sales price, you’ll actually get less because ‘only a fool pays full asking price.’ In other markets, buyers expect to bid up from the asking price. If you ask the expected sales price, lots of buyers won’t even bother to bid, expecting that the house will actually sell for more than they can afford.
A competent real estate agent would have an idea of what similar houses in the area are selling for, and would be able to come up with an asking pricing that is in the right ballpark most of the time.
You seem to be saying that maybe what is happening is that the real estate agents are so incompetent that they are pricing houses at less than half of what they are actually worth in the market, repeatedly? Do you think that is a more reasonable guess than the theory from the video?
I’m not sure why you are saying this as if it is an argument against the video. The video didn’t say anything about setting sales prices at the exact amount you want: he talked about how a normal offer in the market he was talking about would be something like 10% above asking.
This isn’t the type of market that was being talked about in the video.
Right, that’s what the guy in the video was talking about. You aren’t disagreeing with the video here. His point was that normally the asking price is in the correct range, so that you can make a reasonable offer based on the asking price, a bit above it. But since these prices are so far below what comparable houses in the area are selling for, buyers have no idea what the seller actually wants, so it makes it harder to come up with a reasonable bid.
You haven’t engaged with the point of the video at all.
I’m not saying the sellers’ agents are incompetent, though they might be. The theory in the video that asking way below comparable sales (comps) is intentional and designed to fetch a higher end sales price is a reasonable guess and not what I object to.
What I object to is ideas like that there is a ‘right’ asking price and sales price for a home independent of what a willing and able buyer and seller agree to, that such ‘right’ prices are determined mostly or entirely by comps, and that it’s wrong to ask a price substantially different from the ‘right’ price.
Whether it’s intentional or unintentional I think setting asking price way below comps has the effect of enabling more rapid discovery of the real “what they are actually worth in the market” price. Sometimes that discovery turns out to show that the actual market price for a particular house at a particular time is much higher than the comps.
If sellers approximately set asking prices according to a comps based formula, and buyers make offers according to approximately the same formula, then prices move more slowly and take longer to adjust to a change in actual market conditions. In a market with very high and growing demand we would expect to see a shortage: willing and able buyers offering according to the accepted formula but repeatedly failing to secure a house. Which is, in fact, what we do see in some areas[1]. That tells us the market price is higher than houses have actually been selling for.
It’s possible that a particularly high market price is being paid because a buyer is naive or irrationally exuberant. It’s unfortunate for that buyer, though I would wonder why such a buyer doesn’t have an agent to advise them on comps, and how they managed the financial wherewithall to enable the purchase of an already extremely expensive item at a record high price, and how there would be enough of such rich-but-naive buyers to meaningfully affect a large housing market in the long term vs. just providing a handful of lucky sellers with a windfall. The answer to some of that might be government manipulation of the financial and mortgage markets, which I’d agree is a problem but not the fault of house sellers in particular.
But there’s also lots of reasons other than naivete or irrational exuberance. It’s also possible that the market price is being set by a buyer who has made 15 other above-asking-price offers, gotten no accepts, and wants to be done with house-buying even if that means paying more than comparable properties. Or by a buyer who is working 100 hours per week at a very high paying job and values the time required to research and negotiate a comparable sales price purchase more than he values the amount of money he’s paying over comparable homes. Or by a buyer who recognizes something unique about this house that makes it more valuable to him than supposedly similar houses in the area. Or by a buyer who is more sensitive to monthly payment than sales price, expects interest rates to rise significantly, and wants to lock in a purchase before rates rise.
It’s not the seller’s responsibility to tell the buyer what to offer - via the asking price or any other way. Not even approximately or indirectly.
Helping the buyer make a reasonable offer is the buyer’s agent’s responsibility. Buyer’s agents have access to all the same comparable sales data as seller’s agents, plus they have a fiduciary duty to give advice in the best interests of the buyer. Real Estate commissions are structured in such a way as to not cost a buyer any extra to have their own agent. Like any other fiduciary, sometimes buyer’s agents are dumb or corrupt. But that’s kinda tangential to the basic idea that if you’re buying a house you should get a buyer’s agent and if you don’t then you’re being especially dumb.
The video acts like the only info buyers have to go on when making offers is the asking price, which is false. Even for buyers without agents they have access to (and frequently use) sites like Zillow, Trulia, and Redfin that will give value estimates based on comps.
So why have asking prices at all? I’m not convinced they’re an obviously good thing, especially in highly competitive markets. The auction model with a minimum/starting bid is probably a better way of thinking about the transaction.
Behind the scenes I think something akin to an auction is what’s going on when asking price is way below comparable sales. Are you familiar with escalator clauses in home offers? I can explain it if not, but I think the net effect of multiple buyers making escalator clause offers is the same as an auction but faster.
Escalator clauses also substantially reduce the difference between the winning bid and the next highest bid, another potential problem the video complains about. In the markets I follow, $1000 is the typical escalation amount, but even if it’s $10k in a higher priced market that’s a tiny percentage of the sales price.
What the seller wants is irrelevant, and buyers have no right nor reason to expect to know that.
What is relevant to buyers is what the seller will accept. It’s reasonable for both a buyer and seller to not want to waste each other’s time with offers that wouldn’t be acceptable. So It’s reasonable for a seller to help buyers know what he will accept, by asking price and/or other means. In that context, I think it’s reasonable to presume that the seller wants a lot more than asking price, if he can get it.
There are two potential problems I know of with setting an asking price far below comps, both of which I think are minor considerations wrt the actual situation in the video:
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Fraud. If the seller is not actually willing to accept his asking price in an otherwise desirable offer (quick close, all cash with proof of funds) with no competing offers, then he’s committing fraud. Plus in most listing contracts he’d have to pay the Realtor’s commission out of pocket if he rejected an asking price offer and didn’t get or accept any other offer. It’s not clear to me one way or another if a seller asking ex: $900k for a house with $1.5m comps would have accepted $900k if there were no other offers, or would have instead declined to sell the house. I can say that such below-comp sales are reasonably common among unlisted homes. Professional house flippers use a rule of thumb: take 30% off comps price, subtract the cost of all expected repairs/improvements, and offer that amount. Enough such offers get accepted to keep dozens of house flippers in full-time business in major housing markets across the country[1].
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Appraisals. Many buyers require financing for the purchase, which in turn relies on an appraisal, and the appraisal relies almost exclusively on comps. If the comps are $1.5m, a financed offer of $1.7m is not from an able buyer. It’s not actually a $1.7m offer. It is the seller’s (or seller’s agent’s) responsibility to know this and respond accordingly, since accepting such an offer will almost certainly result in one of two outcomes. The first is a price reduction to at or near the appraised price since buyer has to come up with additional funds for 100% of any amount over the appraised price, which they usually can’t/won’t. The second possibility is the sale fails to close, with associated wasted time and expense to both parties. If a seller expects his best offers to be financed, and the buyers/buyers agents to be either naive or angling for appraisal-based price reductions, then he could be better off setting asking at a price likely to generate only offers in line with comps.
I wasn’t particularly concerned about engaging with the point of the video. I was interested in making true comments that were inspired by the video. Is that bad and/or unwanted here? Or is it fine but only with a caveat up front?
[1] I don’t know what is or isn’t happening in the specific housing market the video refers to. I have seen or heard of these things in other housing markets I follow.
Caveat specifically regarding house flippers: 30% gross margin on a house might seem large and maybe excessive. But it’s surprisingly easy to lose money flipping a house bought for a price that’s 30% below comps minus repairs! Flippers typically have to finance using hard money at 10-14% + 2% origination, not the 2-4% Fed subsidized mortgage rates paid by owner occupants. Flippers typically hold the house for 3-6 months while fixing it up and selling. In addition to the high interest they pay insurance, utilities, property tax, and HOA fees the whole time, pay a real estate commission on the resale price + closing costs when they sell, and bear the risk that misjudged comps, a market reversal, unexpected problem, or extended delay in sale will consume all the profit and maybe generate a loss. TV shows that make house flipping look like easy money are misleading, and I don’t want my gross margin number to add to that misperception.
https://www.tiktok.com/@vavavarino/video/7011495786160639238
correction tho: not on strike yet; voting about it soon
https://www.tiktok.com/@lucythinkstoomuch/video/7002750630196481285
https://www.tiktok.com/@lucythinkstoomuch/video/7002037736198753542
sexist
This is an excuse. Not trying looks better than failing. And the framing here suggests he’s truth-seeking, his comments were true, the other person isn’t interested in truth, and maybe the forum isn’t interested in truth.
This doesn’t acknowledge or engage with what AD actually did wrong. He’s pretending it was something else to control the narrative. What he actually did was reply to a video, disagree with it, receive criticism, and then claim the stuff that looked like disagreement was really just making misleading, irrelevant comments and that actually he didn’t make any bold claims that could be criticized. Talk about motte and bailey!
This is a pattern with AD’s posts (and some other people’s) because he has social status game playing automatized. It’s habitual and intuitive for him.
If your writing is misleading, rewrite it or add caveats. If you’re changing topics, say so up front.
People, reasonably, look for interpretations of your replies as relevant comments that express opinions about the main issues. The best case scenario is you’re wasting people’s time by having them search for something that doesn’t exist.
There are standard types of replies and people try to figure out what you’re saying. Many posts agree or disagree with one or more points and give reasons. Some posts ask a question or try to add something to the parent. When people see what appear to be arguments, their first guess will be that you’re agreeing or disagreeing with something.
A larger problem is that your posts often contain multiple fairly clear communications, indications or hints about relevant opinions you have. By all appearances, you were writing relevant replies. But then, in response to criticism, you deny having meant what you appeared to have said. That’s not a way to learn from criticism and make progress. For a critic, it’s particularly unsatisfying – they were expecting and aiming for you to either change your mind or give some kind of rebuttal. If their argument works, that’s fine, and in the alternative they want to gain some information about why people disagree.
Denying, modifying and withdrawing claims is a common pattern in our society. It’s a typical, widespread way that people evade criticism.
One of the typical motivations is that errors like context dropping or poor writing are about a different issue than the original discussion. E.g. if you were debating abortion, and were biased and tribalist, you would not want to admit to any error that could threaten your conclusion about abortion. It’d be preferable to admit to an error that isn’t about abortion. Being a poor writer or thinker doesn’t mean that your political position is false.
Also, one can often blame others for misunderstandings or communication failures, or present that as a normal no-fault occurrence.
One of the bigger picture issues is making bold claims or not. Bold claims are risky ideas that are exposed to criticism (as opposed to e.g. uncontroversial ideas). Techniques that withdraw claims from the debate after they’re criticized enable people to give the appearance of making bold claims while actually exposing very little to criticism. They also discourage potential critics from trying to engage because they can’t predict, in advance, what claims would actually be defended and stood behind.
https://www.tiktok.com/@theomahaoracle/video/7010866650958286086
https://www.tiktok.com/@theomahaoracle/video/7011930711569517829
the world is fucked bro
https://www.tiktok.com/@onlyangelstudios/video/7002622320342781190
typical fraud
https://www.tiktok.com/@mechanicchickjess/video/7001640486184291590
https://www.tiktok.com/@mechanicchickjess/video/7001923924401360133
sexist
https://www.tiktok.com/@catsupwithdoug/video/7011713358252526854
fraud?
https://www.tiktok.com/@chaoticgothbimbo/video/7011531125080345861
sexist
https://www.tiktok.com/@cocojoe5/video/7012077227848371462
https://www.tiktok.com/@stopitparis/video/7012351251694374150
https://www.tiktok.com/@philly_the_kxng215/video/7003705794772405509
OK guys. I like one of these and dislike two. Which do you think is the good one?
australian protestors physically fighting with the authorities:
https://www.tiktok.com/@thatsnotmyname1957/video/7010218908728724742
I think u like the 2nd link
Third link seems sexist, so I don’t think you like that. (I didn’t watch the full thing, maybe I should have… I just watched the first bit upto “Who built your apartment/house”
First link seemed at first to be about individual liberty and pro-American, which I think are things you like… but it’s also saying that America is the first experiment in self-governance and real freedom, which is what led to a great culture and economic prosperity. But I’ve seen you and Justin talk about examples of how the government is interfering with economies and making different industries less efficient, so maybe the American system really isn’t free from government interference. At first he seemed to be speaking in relative terms, and maybe relatively America is pretty good at staying out of free business, but then he seemed to switch to more absolute terms, and I think in absolute terms it’s still quite bad. My guess is you don’t like link #1.
I was aware of Justin’s answer so that likely pushed me to eliminate the third link quickly and to question the first link more than I would have otherwise.
Re: second link, I’m watching it and commenting as I go. I don’t know anything about Dog the Bounty Hunter. She mentions that he had a reality tv show, and I remember that you’ve mentioned some reality tv shows in the past, so maybe that’s related to you knowing about him. Based on the screenshotted comment that this videomaker is responding to, I’m thinking this might be a similar situation to the Aubrey De Grey harassment situation, where maybe the original comment is someone commenting on a controversy and implying that most people commenting are displaying their ignorance (Telling others that they know nothing about Dog the Bounty Hunter without explicitly saying that). It looks like the videomaker here is speaking out against the people “Stanning” (I know of Stan be like slang for liking/supporting someone, and I think in this context it might mean like strongly or blindly supporting someone even in the face of stuff that should make you doubt them) Dog, such as this commentor who’s been screenshotted.
So in 2011 there was a controversy with a phone call leaked between Dog and his son, where Dog used the N word a bunch, and did not approve of his son dating a black woman because it would “ruin his career”. At first I thought he didn’t approve because of racism, but maybe this was a valid career concern. I don’t know why/how his reality tv show or general career would be ruined by his son dating a black woman, but I’m assuming it’s possible for him not to be racist and still be concerned about his image e.g. maybe he has racist fans or something like that. However I think the N word usage is a bad sign and implies legit racism problems. So in this context I think that call probably made him seem racist, and he might actually be racist, especially since the videomaker says that original call is disgusting (I won’t look it up yet since I want to draw my conclusion just from this video)
Dog wrote a lengthy apology and people forgave him and seemed to forget about the issue.
10 years later, beginning of 2021, Dog was supposed to start a new show but it got cancelled before the first ep. even aired. The production company said Dog had breached contract, but Dog said it was the production company’s fault, so the production company wrote a more detailed statement saying that they had done an internal investigation and found that Dog had made racist and homophobic comments and committed illegal activity during filming.
I’m only halfway through the video but I think this is enough for me to agree with Justin that you like the second video. I think it’s a similar situation the AdG one and I think you like it when people look through the evidence and speak out against people who are being supported blindly through some kind of controversy by their fans, even though there are issues that should cause their fans to retract support or at least suspend judgment/be skeptical until more can be figured out or w/e.
Also just noticed the description of the TikTok: sorry is this who we’re looking up to now?
Which helps me contextualize it a bit better too. Do people look up to Dog the Bounty Hunter as some kind of role model? Maybe that’s why this videomaker is speaking up on this issue, to sort of say that we shouldn’t be learning from someone who has issues like racism, homophobia, and doing illegal stuff during filming, which both implies bad morality and not even caring whether people see him do the illegal stuff/record it. (Also if the illegal stuff is bad enough, it would make him a criminal right?)
As a side note/tangent, I think I do some illegal things like jaywalking or torrenting, but I’m not sure if that makes me a criminal or not. I’m not very clear on the law and e.g. what are things that can be taken to civil court but don’t have jailtime attached, and whether criminality is related to either of those, but overall I think what the production company is implying he did is likely worse than those illegal things. I’m asking re: criminality mostly because I’ve read before about e.g. not associating with criminals, and how that’s bad, and how it’s OK to lie to protect myself from criminals or to protect my privacy, but I should be taking efforts to dissociate yourself from criminals in the first place. But I think maybe that’s not about their status as criminals but more like are they doing stuff that requires internal contradictions and flawed moral values, like being a thief is bad for the thief too. Found the article from which I remember reading about this: Lying · Elliot Temple
I perhaps should spoiler-blur my answer when answering something that multiple people may want to answer.