{"id":550,"date":"2006-10-17T19:19:42","date_gmt":"2006-10-18T02:19:42","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=550"},"modified":"2007-07-16T21:10:11","modified_gmt":"2007-07-17T04:10:11","slug":"smashing-the-idols-understanding-market-value-in-full-context","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/550\/smashing-the-idols-understanding-market-value-in-full-context\/","title":{"rendered":"Smashing the idols: Understanding market value in full context . . ."},"content":{"rendered":"

Nominate me Ikonoklastes, for I am come to raze this temple of half-baked ideas. I want to come back to the MLS later in the week, and I have a deep need to expose the motivations of brokers, as these are distinguished from the motivations of lesser licensees. But for now I want to take on the idea of market value.<\/p>\n

Jeff Brown, whom I admire without limit, asks of me<\/a>:<\/p>\n

I’m still wondering though about the apparent premise underlying your argument that says the buyer pays everything.<\/p>\n

That premise is this: That somehow the market value of the home is controlled by something other than supply\/demand, and the other factors of which we’re all aware. Would you please clear this up for me?<\/p><\/blockquote>\n

There are actually two different issues on the surface there, and there is still a third issue buried in the underlying premises.<\/p>\n

First things first: In every economic transaction, unless the seller is taking a loss — or unless the seller pays for something outside of the transaction — the buyer pays for everything. This is true of anything that can be bought, and it is why — in every business except real estate — the buyer is given the red-carpet treatment. The seller (of anything) brings the value to be sold, but the buyer brings every dollar of the money, and every dollar that is disbursed to the seller and to any other involved parties is disbursed from the buyer’s pile of dollars.<\/p>\n

In real estate, we make believe that the money is first transferred to the seller and then instantaneously distributed to the other parties, but this is a sleight of hand we effect in order to get the sales commissions past the lender. It might once, historically, have described a sequence of events, but even then the activity was a pantomime.<\/p>\n

The seller does not cause the sale by claiming to pay for it. The buyer causes the sale, and no uncoerced sale ever happened until<\/i> the buyer caused it.<\/p>\n

Moreover, nothing in the laws of god or man ever prevented a seller from paying sales commissions out-of-pocket, in advance, instead of Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Nominate me Ikonoklastes, for I am come to raze this temple of half-baked ideas. I want to come back to the MLS later in the week, and I have a deep need to expose the motivations of brokers, as these are distinguished from the motivations of lesser licensees. But for now I want to take […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,4,6,5],"tags":[],"class_list":{"0":"post-550","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-blogging","7":"category-disintermediation","8":"category-marketing","9":"category-real-estate","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":7986,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7986\/technologys-challenge-understanding-how-cats-part-with-skins\/","url_meta":{"origin":550,"position":0},"title":"Technology’s Challenge: Understanding How Cats Part with Skins","author":"Thomas Hall","date":"April 20, 2009","format":false,"excerpt":"Several recent posts have had me thinking about just how technology isn't addressing the needs of cats.\u00a0 Needless to say, there are many different types of cats - cats that roam alleys picking through the remnants of fish bones versus the ones that eat Fancy Feast and sit on the\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/biology.clc.uc.edu\/fankhauser\/Labs\/Anatomy_%26_Physiology\/A%26P201\/Cat_Skinning\/Lines_to_cut_PA300152.JPG?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1699,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1699\/testing-the-starpower-premise-is-success-contagious\/","url_meta":{"origin":550,"position":1},"title":"Testing the StarPower premise: Is success contagious?","author":"Greg Swann","date":"July 25, 2007","format":false,"excerpt":"A tuxedoed Russell Shaw holds forth at the newcomer's reception at tonight's opening session of the StarPower Conference. An important principle of the StarPower method is the idea that success is contagious, that highly-motivated Realtors can hoist themselves to the next level not just by learning new skills and techniques,\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5709,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5709\/rethinking-real-estate-web-20\/","url_meta":{"origin":550,"position":2},"title":"Rethinking Real Estate Web 2.0","author":"Thomas Hall","date":"November 20, 2008","format":false,"excerpt":"What do consumers want? I believe this question has been asked ten times to Sunday as it relates to real estate. I recently read Marc Davison's recent blog post at 1000Watt Blog summarizing the results of that exact question, What do Consumers Want?.\u00a0 The report, commissioned by Keller Williams, was\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":719,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/719\/strong-coffee\/","url_meta":{"origin":550,"position":3},"title":"Strong coffee","author":"Richard Riccelli","date":"November 30, 2006","format":false,"excerpt":"Thinking about your lawn signs and listings and your picture on your card.** Thinking about where you can find ideas and inspirations that will cause buyers to come to you instead of the other guy.From time to time, I'll introduce you to people from my world who have influenced my\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1828,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1828\/sub-prime-borrowers-got-lucky-they-didnt-pay-enough\/","url_meta":{"origin":550,"position":4},"title":"Sub-Prime Borrowers Got Lucky- They Didn’t Pay Enough","author":"Brian Brady","date":"August 20, 2007","format":false,"excerpt":"I floated an idea about a federal bailout, along the lines of Chrysler in 1980, of Countrywide Financial Corporation. I wanted to highlight two things in this post: Countrywide is in trouble and their trouble is our trouble. My premise is that the collapse of CFC goes beyond the 55,000\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4163,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4163\/with-its-new-iphone-application-truliacom-is-taking-on-line-real-estate-search-to-the-streets\/","url_meta":{"origin":550,"position":5},"title":"With its new iPhone application, Trulia.com is taking on-line real estate search to the streets","author":"Greg Swann","date":"August 31, 2008","format":false,"excerpt":"This is my column for this week from the Arizona Republic (permanent link). There is a fuller review of this new technology here. \u00a0With its new iPhone application, Trulia.com is taking on-line real estate search to the streets So who is winning the Realty.bot race, Trulia.com or Zillow.com? Your guess\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/550","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=550"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/550\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}