The Internet has done wonders in getting information to people. In terms of commerce, it’s really done an amazing job of reducing the “matching” problem - connecting buyers and sellers. It’s done a great job and reducing the need for a middleman, enabling buyers and seller to have better results. Plane tickets, hotel reservations, clothing, computers, insurance, contact lenses…

And then, there’s real estate.

A former colleague of mine tried to buy a house recently without an agent - here are some relevant quotes from his most excellent and informative tale:

Mike’s Lookout » Blog Archive » Adventures in Real Estate - Buying without an Agent
In January, I embarked on a quest to buy a home without using a real-estate agent. The reason for doing so is not because I thought that agents have no value, but just because I didn’t value their services at their asking price of $35,000-$45,000. (3% of $1.5M is $45K) There are very few things that I ever spend that much money for; and a few weeks of part time service from an agent does not seem worthy of that price. $4K to $5K seems like a more appropriate price.

[snip]

The offer is the hardest part of the process for several reasons. First, you may be dealing with an Agent that is fundamentally opposed to buyers working without agents. While Agents are legally required to present your offer to the seller, they are not required to put a positive spin on it. So, when you run into these agents, your offer is may be rejected just because you don’t have an agent. I had this happen to me at least once. The Agent first claimed that what I was doing was illegal. When ultimately convinced that my offer was legitimate, she took it begrudgingly. Nonetheless, the offer was rejected.

[snip]

In my case, I was ultimately not able to buy without an agent. We put in four offers on our own, none of which were ‘low-ball’ offers. Three of the four offers were for over-asking, and one offer was for more than $100K over the asking price. However, all four offers were rejected.

Unfortunately, each offer we made was accompanied by at least 4 offers from other parties. When the seller has multiple offers to select from, unless your offer is considerably higher than the others, the seller is likely to take a ‘traditional’ offer in favor of yours. From the seller’s point of view - and this is fair - your offer is riskier. You don’t know the process as well as an agent does, and maybe the reason you don’t have an agent is because you are less serious than other bidders. The seller doesn’t want the transaction to fall through, and taking someone else’s offer may be the safest bet, even if they are leaving a small amount of money on the table.

So, in conclusion, I don’t think you’re likely to buy a house without an agent if there are competing offers. If yours is the only offer, I do believe this process can work, but it is a lot of work to you.

Sadly this tale isn’t uncommon. In fact, instead of looking for ways to enable the Internet to provide more information to people - well… look at what’s going on: Arizona is trying to ban Zillow. Real Estate brokers refuse to show properties to people using discount brokers. There was even a story (can’t find it right now) about Realtors hiding properties that were listed by For Sale By Owner folks. All to, presumably, protect their old way of doing business and serving as a middle-man.

I’m not sure that we can count on our government to fix this situation anytime soon - look at #11 on this list:

LobbyWatch - The Center for Public Integrity

#	Companies and Organizations	Reported Lobbying
1	Chamber of Commerce for the U.S.A.	$204,614,680
2	Altria Group Inc	$101,220,000
3	General Electric Co.	$94,130,000
4	American Medical Association	$92,560,000
5	Northrop Grumman Corp.	$83,405,691
6	Edison Electric Institute	$82,866,628
7	Verizon Communications Inc.	$81,870,000
8	Business Roundtable	$80,380,000
9	American Hospital Association & State Affiliates	$79,205,772
10	Pharmaceutical Research & Manufacturers of America	$72,720,000
11	National Association of Realtors	$68,810,000
12	ExxonMobil Corp.	$59,672,742

(And before someone calls me a hypocrite, yes I do realize that the company I work for shows up 12 spots below on the list.)

Now I’m sure there are honest and ethical real estate agents - that it’s a few bad apples that are spoiling the cart with their bad behavior above… but in this day and age, should real estate agents be like travel agents - moving up the market by serving those who have very specialized needs?

If you can trade stocks for free now, why do you still have to pay 6% to sell a home?

Finally, as a buyer, this should definitely concern you - after all, as Mike notes - you’re paying for this 6% for the life of your home in the form of taxes:

The saddest part of real-estate commissions is that you pay them every year after you purchase. In addition to paying $90,000 up-front for real-estate agents on a $1.5M home, you’ll also pay $1080 each year in increased taxes as long as you own your home, since the agent’s fees are rolled into the assessed value of your home!

(Note: for non-Californians, a $1.5M home isn’t unreasonable. Click here to see some.)

I’ve been selling stuff from time to time since 1998. Recently I tried to sell something, and let me tell you about the shady experience I had.

First, the winner of my auction sent me a forged email from a yahoo.com account that looked like an ebay e-mail that said this:

Good day Mate,
Am pleased to be the winner of this item,is a gift to my grandson who live in Africa….and i know you only ship within UNITED STATE…..It is because am presently in DENMARK for a business trip and i wont be back until next two weeks…So i will be to be offering you $100 for the shipment to the location in West Africa…. ( Via First Class Global Express)…www.usps.com…The payment will be issuing out to you soonest to you Via PayPal…Here is the shipping address….

NAME : Bassy Nicolas
ADDRESS :#39 Oba Akinyele AV
Oluyole Ind Estate Ring Road
CITY : Ibadan
STATE : Oyo
ZIP CODE : 23402
COUNTRY : Nigeria.
My Regards,
Bassy Coleman…

Unfortunately, Bassy couldn’t keep the last name straight it appears.

Next, I got a phishing e-mail claiming that my paypal account had been credited. Unfortunately, it was sent from “paypalinc@emailaccount.com”.

To top things off, a few hours after winning and “paying me”, Bassy had the chutzpah to write this e-mail to me:

Hello Mate,
I am so glad to inform you that i have issued out the payment to you and i have also received a NOTIFY MAIL from PayPal that the money have been deducted from my account so i will like to hear from you back about the shipment of the item to the location…..
My Regards,
Bassy Coleman…

Wow… talk about an eager buyer.

Pretty shady stuff. Fortunately, after a few hours, ebay sent me a notice saying that the “winner” of my auction had used a compromised account, and that they would be canceling the auction and refunding my listing fees. (Of course, they forgot to refund me my final payment fee - but they corrected that immediately after I complained.)

So I relisted my auction and a few hours later I got this “question” about the product:

Q: Dear sir/madam, With China entering into WTO,our company has been eastablised.We are a large trading company from china,an agent of all the well-known digital product factories,and facing to wholesalers worldwide. We export all kinds of digital products, and offer competitive and reasonable price and good quality ,so you can make a big profit.In these years,We’ve gained a good reputation and welcomed by many customs worldwide.Please feel free to contact us if any questions .We will try our best to give you a satisfactory answer. Contact: tel: 86 [redacted] mail: [redacted] MSN: [redacted] website: [redacted]

Good grief.

I have no doubts eBay is taking this seriously - but it must be quite the battle. I wonder how we can raise the costs of pulling such scams.

Omar reports that he’s trying to get high fructose corn syrup out of his life. The stuff is everywhere - I’ve heard that it’s even in the hamburger buns at McDonald’s.

A t the same time, I read this piece in the NY Times today:

Food - Supermarkets - Obesity - Nutrition - Calories - Farmers - Agriculture - New York Times
For the last several decades — indeed, for about as long as the American waistline has been ballooning — U.S. agricultural policy has been designed in such a way as to promote the overproduction of these five commodities, especially corn and soy.

That’s because the current farm bill helps commodity farmers by cutting them a check based on how many bushels they can grow, rather than, say, by supporting prices and limiting production, as farm bills once did. The result? A food system awash in added sugars (derived from corn) and added fats (derived mainly from soy), as well as dirt-cheap meat and milk (derived from both). By comparison, the farm bill does almost nothing to support farmers growing fresh produce. A result of these policy choices is on stark display in your supermarket, where the real price of fruits and vegetables between 1985 and 2000 increased by nearly 40 percent while the real price of soft drinks (a k a liquid corn) declined by 23 percent. The reason the least healthful calories in the supermarket are the cheapest is that those are the ones the farm bill encourages farmers to grow.

Well, that certainly helps explain why high fructose corn syrup is everywhere. This piece seems to indicate that this might not be the best use of my tax dollars.

On another note, I have found that some Mexican restaurants sell Coke with sugar - look for the bottles. I haven’t had a chance to try one yet and see if i can taste the difference.

I filed my taxes over the weekend. Fortunately, I didn’t have as many problems with TurboTax as the folks in this thread did.

I did find this interesting piece though: using data from this MSNBC piece, Consumerist created this chart:

If The US Government Were The Average Household, What Would Its Budget Be? - Consumerist

Probably revealing my age, I also recently learned this:

U.S. Treasury - FAQs: Deductions & Tax Liability
The deduction for personal interest, including interest on charge card purchase of consumer items, was phased out by the Tax Reform Act of 1986.

Wow… I can’t believe that at one time, credit card interest was tax deductible. And that Congress and President Reagan actually passed a law to end it.

Tonight I read this fantastic piece by Walt Mossberg. I’ll share this relevant snippet:

Personal Technology - WSJ.com
I am not singling out Sony here. I would have had a similar experience if I had chosen, say, a Hewlett-Packard laptop. Most major PC makers feature the security programs and trial software and offers I encountered on my new Sony. They are not part of Vista itself.

The problem is a lack of respect for the consumer. The manufacturers don’t act as if the computer belongs to you. They act as if it is a billboard for restricted trial versions of software and ads for Web sites and services that they can sell to third-party companies who want you to buy these products.

I’m distinguishing these programs, sometimes called “craplets,” from the full-featured, built-in Sony software meant to enhance the computer, or from entire, useful programs Microsoft builds into Windows, such as music and photo organizers.

On my new Sony, there were two dozen trial programs and free offers.

I just bought a new Dell for my parents recently - and aside from the video card fiasco that I blogged about earlier, there was also a bunch of craplets/crapware/bloatware/junkware that I had to clean out. Some of them were pretty aggressive about advertising their… uh… value and offers. At least it didn’t have as many stickers  as my Toshiba M200 did.

I can understand why manufacturers would do this - being a PC manufacturer generally means low profit margins, and these… err… techniques help grow value for shareholders. And apparently customers don’t mind because… heck… they’re still buying computers!

But it leads to a sucky first run experience. And, as Walt pointed out - it slows down your computer. Most people, I suspect, would simply blame Windows.

So how do we get out of this mess? Should Microsoft have to build it’s own PC’s ala xBox and Zune - so that it could deliver a grand end-to-end consumer experience?