20 years ago, I'm sure someone asked, "Why do we have to pay someone a commission to buy stocks and mutual funds?" I wonder how the typical investor responded then vs now. I wonder how VAnguard was reguarded when it was a small up start of a company, with their fancy indexing and low commissions. I'm guessing they were ridiculed and shunned by the investment community at large. I wonder if they were even called "unAmerican?"
I think the main difference between buying/selling a mutual fund vs a house is that the latter is rather a rare event. I mean, for the typical person, how often do we buy/sell a home? In the past, it was very rare, perhaps (I am only guessing) 2-3 in a life time? Now a days, it is still rare but more frequenct than our parents' generation. I am in my 40's and I've sold/bought 2 homes, and about to buy a third, God willing. But my vast experience of 2 were all within the last 5 years of my life.
Since buying/selling a home is such a rare event, most of us are inexperienced and find it easier to rely on a middle man. This will change with time as people move more frequently and try to save some money by cutting out the middle wo/man and their 6% commission. Thus the discount broker/FSBO were born, and currently ridiculed and barely tolerated by realtors. Don't be surprised when realtors refuse to bring their clients to homes with FSBO signs. This is one of the reasons the Fed was investigating the Association of Realtors for monopolistic practices.
Due to the recent run up on prices and the seller's market that just ended, the ranks of realtors, I think, are swelled with inexperienced/incompetent realtors. I am glad that the market has turned, not only because I am trying to buy a house now, but also because the down market will "thin the ranks," if you will, of the realtors, so that the recent-part-time-inexperienced ones who NEVER experienced a buyers' market will quit leaving only the competant/veteran/professional realtors.
I have nothing against realtors (or brokers or financial advisors). Again, as with any profession, there are bad apples that ruin it for others. Do your homework when hiring an agent because, under certain circumstances, they can really help you out.
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