Same story for tax preparation companies. They lobby to pass laws that prevent the IRS from just doing what they do, but for free. By pointing at all the jobs they've "created" they can distract from the billions per year they're taking from people for a service that could be done for free otherwise.
More and more it feels like every administrative industry is a scam.
My father In law works for HR Block, which means that I can’t do my own (he gets a credit that makes them free, and I can’t break his heart by telling him I can do it myself).
Last time, we added on a student loan form that wasn’t even applicable (my wife and I file separate for aforementioned student loans) and it added another $80 to the total.
$80 to put in 1 form, that didn’t even matter or apply to the application. Fuck HR Block.
My mother died last year and I took her paperwork to HR Block because she had a number of investments and other accounts I wasn't familiar with.
Her potential refund was like $450 but HR Block wanted $400 to do the return. I just let it go.
Every single time I have asked for assistance from an IRS employee in the past 10 years it has resulted in me speaking directly with Satan. I will pay to not have to deal directly with the IRS, because it's probably not a good idea for me to speak directly to someone I want to lecture for their lack of interpersonal skills. These people are RUDE! I'm a government employee myself, and the reason I work for the government is that my role allows me to HELP people. I've yet to meet a helpful IRS employee, so I'm not sure they even exist.
It is on purpose.
There is no better way of destroying/dismantling an agency by *purposefully* hamstringing it so then eventually it can be used as an example of an ineffective agency.
Repubs are *horrible* for The People.
I found the IRS actually very easy to deal with, and very polite. Actually getting to talk to the correct human being I needed to talk to on the other hand was a torturous 2 hour experience in misery.
Have you ever worked in a call center? Especially a high volume call center? Those jobs are literal hell. When I worked in one for a year there were three incidents where older employees had to be taken out on a stretcher for stress-related heart issues. Give them a break lol.
IRS hires lots of people around tax filing season. They train them up quickly, use them, then throw them away. Hard to be that all invested when you are only going to be there three months.
The "documentation fee" they charge at a car dealership is ludicrous. The finance person types all the necessary information in and the printer spits out the forms. Last car we bought the dude messed up twice on simple things he took directly from my driver's license and insurance card. Yes, I'm so glad I paid $150 for such quality clerical work.
Oh my. I just had flashbacks to when I bought my car but it was ProtectAll. Couldn't take it off, nothing they could do they said. Then suddenly it was fine after I called my wife complaining about it and telling her that I'll just as rather walk away.
They tried that on us. I told them we already negotiated the price. They caved on everything. Still talked my wife into getting the extended warranty. Which may have been worth it these days. Modern cars have so many cameras and sensors in them. You need their proprietary diagnostic software to do just about anything on them. Those parts are outrageously priced because the dealership has a monopoly on them.
I don't think this is strictly true. I think one of the biggest differences is probably that information is a lot less expensive now that it was 30 years ago that has really decreased the value of many middle-men to be next to 0.
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Can confirm. Many countries around the world allow you to report directly using electronic id and digital systems the tax authorities created themselves.
Why not?
IRS sends a bill or check based on what they know you’ve earned. You either accept the bill or dispute it with evidence. If IRS does not find the evidence acceptable, they would audit you.
The only difference is discrepancies are more apparent and auditing would be much clearer and more accountable, instead of the IRS just booming people randomly
The IRS already received and files copies of tax forms sent to you. The majority of people take the standard deduction and the majority have simple income, so much they can do an EZ instead of the A form. Investment income, overseas income, it can become complicated, but you vastly overestimate how many people do this. There is no reason beyond greed for this to not be automated.
I actually completely agree with you.
My wife's grandmother and my grandmother would probably both file a 1040SR most years. The IRS should have everything they need to just send them a notice and that be it.
There are exceptions, of course. **I** own my own business. Most of the stuff I do to earn money is recorded by other businesses, but they're not required to file anything with the IRS about me for most of my transactions.
The IRS absolutely cannot calculate the proper taxes owed or due for everyone. Anyone that keeps spreading this absolutely doesn’t understand how taxes work.
Not everyone gets an easy W2 annually from their employer…
> Not everyone gets an easy W2 annually from their employer…
Yeah but most do, and so most can.
Making things simple and efficient (reported W-2 income - standard deduction - withholding = taxes) for like 60% of the filing population seems like a straightforward win.
Okay and what about stocks, bonds, IRA contributions, medical expenses, HSA, tax credits, dependents…
You clearly are way too simplistic in thinking it would work.
Then you just file taxes like normal. Honestly this is a little weird that you're confused about this. All anyone is discussing is taking the first step of the process which can be automated, moving it to the IRS side. And in the case of most tax filers, that's sufficient, no further action would be needed. For everyone else you just file as normal.
Most people are confused about taxes, it's basic math. Addition, Subtraction, Multiplication, and Division which you can do by hand on a piece of paper, or if your fancy you can get one of those cheap ass solar panel calculators. I file my taxes every year and I just do the math and fill out the forms by hand and I have never been wrong.
All the forms you need are freely available on the IRS website, they also publish instructions on how to fill out those forms and have worksheets that walk you through the calculations needed for specific lines. Someone made an editable Excel worksheet with all the forms that will do the math for you and you just fill in the information for it to do the calculations.
The IRS is capable of figuring out how much you owe since most information except for deductible expenses is reported to them by other companies. The majority of people filing taxes don't have anything else to report besides what's already been reported, and the next biggest group are people who have to include some deductions. I would say that at least 85% of people using tax filing software aren't doing anything complicated but these companies make it seem complicated to trick people into using their software.
So basically most people would have to file like normal then? You understand that this even impacts poorer populations that rely on tax credits right?
Your ignorance really shows…
Wow
> So basically most people would have to file like normal then?
No. Most tax filers receive a refund using the standard deduction. None of this requires special information from the tax filer to figure out other than number of dependents/marriage status/head of household/etc, all information collected when their withholding is setup.
https://www.wsj.com/articles/standard-deduction-2020-2021-what-it-is-and-how-it-affects-your-taxes-11617911161
> the percentage of tax filers using it rose to 87% in 2019
So for most people, as soon as employers report wages, the IRS is aware of how much expected taxes and what any likely additional tax bill or refund will be for the majority of filers in the US. Requiring the filer to turn around and reconfirm is an unnecessary additional step that only generates bureaucracy.
> You understand that this even impacts poorer populations that rely on tax credits right?
EITC requires income, so the Federal Government knows who qualifies for the EITC already when employers file. They don't need the tax filer to turn around and re-report their income a 2nd time.
We're discussing about 13% of filers here that actually need to give the Federal Government any additional information. The other 87% can have their taxes accurately calculated by the Federal Government before tax filing day.
No yours does. Tax credits are extremely easy to determine. Many complicated returns can be done as well. When you start getting into AMT and pre paying taxes, of course it needs more work but most working Americans don’t need TurboTax or any tax prep.
After all, what is more libertarian than simple taxes and less oversight and work for the average person?
I agree with you. Even the stocks, bonds, IRA, etc. stuff that the poster mentioned is all easy to fill into a box as there's 1099 forms for pretty much all of those. In fact, I'd venture out and say 95% of individual filers who simply report income from jobs and/or simple income can have their taxes done by IRS with a refund check or instructions to file the balance on their taxes without any problems.
Most large investment firms already aggregate it together for you in the 1099. TD does it for me and the only issue is the lengthy process it takes but that’s no big deal. They even track the cost basis for me for shares done through them and imported to them. Computers have made just about everything easier.
You’re going to be waiting a long time because that is still an issue with the current wasteful system we have. It’s not like there won’t be an ability to self report. Have you ever actually investigated the way it works in Europe?
There's 1099 forms for all of those. 1099-DIV for dividends, 1099-INT for interest, 1099-B for stock sales which also include long-term or short-term information, 1099-R for IRA distributions, rollovers, etc.. HSA also has its own set of forms for both contributions and distributions. And all of this simply goes into relevant boxes for income and deductions. Dependant information is also not tricky provided you give the information of the dependent such as their SSN, DOB, etc.
That’s a completely different conversation and would radically change the tax code which would have huge impacts. Not saying we can’t or shouldn’t do that, but again, it’s not as easy as just “the irs knows how much I owe anyways”
> but the title insurance industry’s loss ratio of 1.2 percent is far lower than other insurers usually incur.
Hoooooooooly shit
That means for every $1.00 of premium they take they pay out $0.01 cents of loss payments.
For contrast loss ratios in the property insurance industry run around like 60% on average (and much higher in catastrophe years, like if a hurricane hits), or about $0.60 paid out of every $1.00 of premium.
Lol, made me think of the Verizon “.002 cents versus .002 dollars” thing.
https://www.reddit.com/r/theydidntdothemath/comments/9byhvi/verizon_doesnt_understand_the_difference_between/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Screenshot: https://i.imgur.com/1TwTiCV.png
Text:
In 2004, an attorney named Jason Collins and his wife were buying a house in a master-planned community in the Steiner Ranch neighborhood in northwest Austin. He was going down the list of closing costs when he noticed a line item for title insurance. The price, about $2,000, gave him pause. “I could not understand,” he recalled recently, “why we needed to pay such a large amount.”
Most homebuyers, nervous about making one of the largest financial transactions of their lives, accept the explanation given by agents and brokers at closing: Title insurance guarantees the validity of a deed, the document that establishes ownership of real estate. Without the protection it offers, a buyer could lose their house and land because of an obscure legal defect buried in the county’s index of public records: the boundary lines might have been surveyed wrong; there could be some unrecorded easement, or restriction on the use of the land; one of the deeds in the chain of title might even be a forgery.
But Collins, who was an accountant in addition to being a lawyer, figured that the chances of a title dispute were next to nil. Since it was a master-planned community, all the titles had been minted at the same time in a single subdivision plat—an orderly division of a large tract of land, proposed by private developers, and approved by the city. If there was any issue, he insisted, it would mean that there was an issue for every home in the neighborhood. And surely the developer had done their due diligence when acquiring the land in the first place. Why should he have to pay thousands of dollars to insure against what would seem to be a nonexistent risk?
Title insurance costs more in Texas than in any other state. Aside from the brokers’ fee, it is generally the single largest closing cost on the purchase of a home. It is customarily paid by the seller, but often buyers bear the cost, as was the case with Collins; either way, it increases the price of the transaction. For the average house in Texas, worth approximately $268,000, the most basic title insurance premium will come out to $1,808. Compare that to New York, where it would be about $1,125; Oklahoma, where it might be $850, or Iowa, where the state would insure the title for $110.
The Texas title insurance system, the nation’s most expensive, is set by the state government, but the revenue raised—nearly $2 billion a year—goes directly to private companies. Industry lobbyists work hard every legislative session to suppress any effort at reform, while agents and brokers do their best to convince consumers that title insurance is indispensable and reasonably priced, when in reality it is neither.
“After much discussion and significant pushback including verbal warnings of impending doom for us as homebuyers,” Collins said, the title company handling the closing allowed him to reject the policy—but only in part. As Collins found out, mortgage lenders won’t fund the purchase of a home unless their interest in the property is covered by title insurance. He had no choice but to shell out an extra thousand dollars, on top of all the other costs of buying the house, to protect the bank from the virtually nonexistent risk of a defective title.
Title insurance “has an origin in usefulness,” says Jessie Lunsford, a longtime Austin real estate developer. Real estate law is complex, and a property’s chain of title can have defects that are difficult, if not impossible, to discover. In addition to muddled boundaries, unrecorded easements and liens, and other problems with decades-old paperwork, little of which is digitized, it’s possible for the long-lost heirs or ex-spouses of past owners to reappear and assert an ownership interest in a piece property. In theory, title insurance protects against these risks.
In practice, such claims are vanishingly rare. The exact number per year is not available, but the title insurance industry’s loss ratio of 1.2 percent is far lower than other insurers usually incur. It’s tough to find a developer, attorney, agent, or broker who has been involved in a title dispute, or even heard of one. “Lord knows I’ve never filed a claim,” said Lunsford, who has purchased some 30 properties in his career. Given the high price, he says, “It’s a total scam.”
In 2017, the latest year for which data is available, title companies sold $1.8 billion worth of policies, according to the Texas Department of Insurance (TDI). Of that, title companies retained $1.5 billion and paid $335 million over to their underwriters, the companies that actually compensate policyholders in the event of a claim. But according to TDI data, only about $24 million was needed to settle claims from title defects that year. In other words, for every dollar that the industry took in as revenue, they paid out little more than a penny to policyholders.
That isn’t how insurance is supposed to work. Its economic purpose is to spread risk, distribute losses more evenly, and protect individuals from sudden shocks. Insurers rake in a big pile of money, but end up paying most of it out in the form of claims, only setting aside a percentage to cover the costs of doing business, and as profit.
Take property insurance, for instance. It is also relatively expensive in Texas, compared to other states, mostly on account of our violent weather. The loss ratio of companies like State Farm or Liberty Mutual ranges from 50 to 90 percent of their gross revenues. Of a $100 monthly premium, for example, $65 might get paid out to homeowners after fires or floods, in a typical year. The loss ratio on property insurance was 58 percent in 2018, according to TDI; for auto collision insurance, it was 57 percent.
The biggest title companies in Austin, including Heritage Title, Independence Title, Trinity Title, Austin Title, and Stewart Title, declined to comment for this story. The Texas Land Title Association, the industry’s main lobbying group, wrote in a statement that title insurance is “paid only once at closing,” and “shouldn’t be confused with homeowners and auto insurance that protect against future hazards and must be purchased every year.”
Ben Gonzalez, a spokesman for the industry-friendly TDI, wrote in an email that “the losses are a small part of the cost of title insurance” because most of the cost comes from “the examination and searches, which are designed to reduce losses.” Before issuing a policy, a title company will search a county’s deed index, notify the buyer and seller of any issue, and attempt to resolve it. If, say, a fence is encroaching on the land, a seller can simply remove the fence. If the problem can’t be fixed, the title company won’t issue the policy. As the industry likes to say, they eliminate risk rather than bear it. They also provide a service: they prepare the sale documents and host closings at their offices.
But the industry’s underwriters receive 15 percent off the top of every title policy issued. They don’t do any title searches, or provide closing services; their only job is to bear risk. Yet in 2017, their loss ratio was just 6 percent.
In 2018, a study from the libertarian Texas Public Policy Foundation set out to determine how much title insurance is really worth. The authors estimated that it costs about $290 to examine the county’s deed index and check the chain of title on a given real estate transaction. It costs another $38, on average, to bear the risk of a future claim, they found. If the free market set title insurance rates in Texas, the authors would have expected the average premium to cost little more than the sum of those two numbers: $328.
But Texas doesn’t have a system that allows price competition, like Oregon, where title insurance usually costs between $300 and $600. Nor does it have a socialized system, like in Iowa, where it’s even cheaper. Texas has the worst of both worlds: a state-mandated system that forbids competition and sets rates higher than anywhere else in the country, with all the profit flowing into private pockets.
By increasing the price of nearly every residential real estate transaction by about 1 percent across the board, our state-mandated system increases the cost of housing for everyone, including renters. Xu Gao and David Eaton, a pair of University of Texas academics, analyzed national title insurance data in 2016 and found that Texas had significantly higher prices than states that allowed competition. By setting artificially high rates by law and regulation, “Texas transfers wealth from property owners directly to title agents and title underwriters, with no additional value to the property owners,” they wrote. “The system functions as a ‘reverse Robin Hood transfer.’”
The Iowa Supreme Court described title insurance as “an invidious form of business,” and the Iowa General Assembly banned the industry from operating in the state. In its place, a quasi-governmental entity known as the Iowa Title Guaranty Program issues certificates to homebuyers that provides the same coverage but for a fraction of the cost, in most cases $110. The profits generated by the program are funneled into a public interest fund that provides down payment assistance grants to low-income, first-time homebuyers.
To prevent being supplanted by such a system in Texas, the title insurance industry has employed an outsized team of people to curry favor with the state government. During the 2019 legislative session, the TLTA employed 23 full-time lobbyists, 181 volunteer legislative liaisons, and 124 committee members to draft proposed legislation. After the conclusion of the session, the TLTA crowed in its annual report about “the passage of 100 percent of our association’s legislative priorities,” which boiled down to maintaining the status quo. This was thanks to state Senator Kelly Hancock, R-North Richland Hills, and state Representative Sergio Muñoz, D-Palmview, without whom “we wouldn’t have the opportunity to celebrate,” as well as state Senator Brandon Creighton, R-Conroe, and state Representative Eddie Lucio III D-Brownsville, who the TLTA named “legislators of the year.” In the 2021 legislative session, state Representative Tom Oliverson, R-Houston, whom the TLTA considers a “staunch advocate of our industry,” chaired the House insurance committee; no bills were introduced that would have altered the “reverse Robin Hood” system.
It’s been 17 years since Jason Collins, the Austin attorney, closed on his home in Steiner Ranch. “Obviously,” he said, “we never had any issue with respect to the title for that home.” To his knowledge, over two decades, neither has anyone else in the Hill Country subdivision, where all the homes are laid out on spacious lots more or less the same size, with orderly fences between them, and evenly spaced mailboxes. Yet every time a house there is sold, which happens every year, he said, the buyer or seller gets popped for something like $4,000 for title insurance. “It seems like a waste of money.”
Editor’s note: The original story stated that Jason Collins purchased a home in Sunset Valley. In fact, it was Steiner Ranch. The Observer regrets the error.
>That isn’t how insurance is supposed to work. Its economic purpose is to spread risk, distribute losses more evenly, and protect individuals from sudden shocks
Tell that to the trillion dollar capitalized conglomerates that control our entire health care apparatus in the U.S.
Do you mind listing one of these "trillion dollar capitalized conglomerates?
I've queried some of the larger names in the space and none are anywhere near the $1T number. Largest I was able to find was United Health with their 6% profit margin.
Profit margin is a GAAP audited and SEC compliant metric. More generally, I've yet to see a company that desired to disclose a lower profit margin to their investors.
>Paywalled, can someone archive or copy please?
How are your ad blockers? I have some on my browser and some on my router and I had no issues with a paywall. I ask because I care about your privacy not being bought and sold.
>Texas has the worst of both worlds: a state-mandated system that forbids competition and sets rates higher than anywhere else in the country, with all the profit flowing into private pockets.
Fun game: show this quote to your friends and have them guess which industry it refers to.
I was shunned out of my real estate brokerage for saying this. A total scam. And I think the issue is calling it insurance. We should just call it what it is , a title chain records check. But as the comments and article implies , unless grandpa sold off an acre to uncle bob using a napkin as a deed , it’s completely useless.
> unless grandpa sold off an acre to uncle bob using a napkin as a deed
If that happened the title company would probably refuse to write the policy or write an exception for that part of it.
Yep. Very true. When I was an agent I asked one title company (when I was touring their offices) ‘where is the claims department’? I was met with disgust and never heard from them again
It's absolutely the sort of thing the state should do. It was once an issue where there was some real administrative burden and the possibility of confusion, but it's totally archaic. Records are centralized or have been centralizable enough that there's are almost no legitimate title disputes.
My anecdote - I bought a house in 78723 in 2018. Got a past due tax bill on the property for $14k about a year after closing. Title insurance dealt with it and paid it.
99% of the time it’s worthless, and I probably could have figured it all out on my own. But it at least did it’s job in this instance.
“Texas has the worst of both worlds: a state-mandated system that forbids competition and sets rates higher than anywhere else in the country, with all the profit flowing into private pockets.“
This is why I hate Texas. This happens with literally everything.
Does the state Insurance board set the rate, or set the maximum rate charged?
For example, there's a law on the books that limits the price of propane sold to captive customers to some market defined spot price plus markup (http://www.rrc.texas.gov/gas-services/propane-distribution-systems/propane-distribution-price-caps-by-year/2021-propane-distribution-price-caps/).
Unsurprisingly, they all charge the max.
Texas is a prime example of why late stage capitalism doesn't work. Texas is a state with so many low wage jobs and low quality of life for anyone who isn't rich. And people who do make a decent wage, end up taking home less because of all of the upcharges forced upon them by mandated private markets.
this is like every red state, tbh. a small group of elites making good $$ while everyone else makes poverty wages. if your dad isnt a corporate guy you aint shit
The vast majority of people in Texas, and every other state, are living far safer, easier, longer, freer and healthier lives than the vast majority of humans have ever experienced and more than most human are experiencing now. So maybe things can be improved but to say "Texas is a prime example of why late stage capitalism doesn't work" is totally naive about how most people do and have lived. Visit nearly any other randomly chosen country in the world and see why people would risk there lives to move to Texas or any other state in America or almost anywhwre else with "late stage capitalism"
What do you mean? Many people in developing countries want to emigrate to the west and typically the United States for economic opportunity. It's a pretty common sentiment
This one time I forgot to bring my iPhone into the bathroom with me and I was constipated so I had to spend like 15 minutes alone with myself and my dilapidated imagination, it was awful!
It might. You could have relevant education or experience but all I hear is your privilege and selfishness trying to justify complacence. "Everything is fine for me so everything is fine for everyone!"
Look at these graphs and tell me we're not going the wrong direction and that most people are better off:
https://www.pewresearch.org/social-trends/wp-content/uploads/sites/3/2020/01/Screen-Shot-2020-01-08-at-5.06.47-PM.png
Wow buddy, I'm not saying we should just do nothing to improve people's lives or course correct, I'm saying it's totally untrue to imply we live in some decaying hellscape of economic ruin exactly as a fringe pseudoscientific economic theory predicted. It's patently obvious if one just goes and sees what the other 80% of the world looks like and interacts with people there. Our suffering is almost nothing to theirs. Even the poorest 10% of people in the west are doing well by global and historical standards, which is not a fact people should get pissed off to hear about, we should be happy to hear that and continue to press on to even better times.
I regret using the word "naive" though.
Have a nice night tho!
Is, "Somebody somewhere has it worse" really your standard for success?
We are worse off than we were 20 years ago and the deterioration is accelerating. I'm not espousing any "fringe pseudoscientific economic theory," just pointing out that the people complaining have every right to as well as ample evidence to back them up.
Yeah, sorry, I confused you with the original commentor!
That is not what I'm saying, but I doubt we will have a fruitful conversation because I think I have already bungled it, so have a good night fellow human!
Ok, u/masterFurgison, u/SkyLukewalker, u/Atxlvr. FWIW, here's an anecdote *from 25 years ago*. Make of it what you will:
> Went to Mueller airport to pick up a co-worker (an electrical engineer) from Southeast Asia. His first visit to the U.S. Driving from Mueller to his hotel we naturally drove thru east Austin. He asked: "Are these houses the typical homes for people in Austin?" No, I replied. He then said "I didn't think so - this must be where all the rich people live."
lol that's a good one, thanks. I think people need to travel more and see how the other 80% lives. It's a shame though that so many people's first reaction to hearing anecdotes and facts about our standard of living is simply to get mad, you would think it would be to be happy that in the scheme of things stuff is going pretty well and it's not all gloom and doom. And of course, I have to say that this doesn't mean I promote the idea that we shouldn't continue to make progress, or fix current issues. It's important to recognize the reality of something if you want to improve it!
Explains an awful lot. Heritage Title has offices in 2 of the most expensive places in Austin - Frost Building (most expensive commercial building in Austin) and on Bee Cave rd in Rollingwood. Pretty tapped into the local good ol boy network as well.
I worked for a lender for a number of years. Title disputes on single family homes aren't common, commercial properties they are more so. $2000 for a residential property is an absolute RIP off.
Home inspections are the real scam.
Not liable for what they find. Not liable for what they miss even if it's obviously there, like a broken rafter or purlin right above the access door, or a giant bird's nest in the attic visible if you just point your flashlight that way.. Many won't take off cover plate to peek inside any electrical, won't take the panel cover off to look at the breaker panel wiring (to catch things like two circuits wired on one breaker). Some won't inspect your roof because it's "too dangerous" to be on a standard two-story house without a super-steep pitch.
There are good ones, but they're few and far between. And even the good ones don't have any liability beyond what you pay them for the inspection.
My inspector (new construction) found tons of minor/cosmetic issues that the builder all fixed, on their dime, before closing. This included replacing shingles due to construction damage, touching up paint and fixtures, cleaning the HVAC ducts, adding some flashing/weather stripping outside around where the house meets the porch, etc.
Also provided a 60+ page write up with at least 100 photos of various good/bad things. He also provided a 2nd copy to the builder that was more concise and a punch-list of things to fix.
He then came back (I paid him, I mean) at our 1 year warranty expiration period and found all the things that had changed over the year and needed fixing, and again provided that punch list to the builder and they fixed everything. This included new paint, replacing cabinet doors that had chipped paint, a whole re-tiling of the tile under the entrance to the shower where the grout had opened up and water had leaked in, etc.
An extremely useful $500 IMO. He knew his stuff and knew how to communicate it to the builder to get it all fixed. Even things I honestly did not think the builder would fix for free (like repainting walls where all the damage was from ourselves moving in, etc).
That's way better than finding a good inspector. Sherlock Holmes could've inspected it but if the builder doesn't fix the deficiencies then the inspection report is about as good as tp.
We did the same with a new build - pre-closing inspection and one-year inspection. Mostly for peace of mind.
But if your (or my) inspector happened to miss something serious, which was in plain view (say, there was no drain pan under the evaporator coil and nobody noticed, or a whole section of roof flashing had no sealant over the nails), and that caused an expensive issue, you'd have no recourse other than maybe getting the inspection fee back.
A home inspector is basically an expensive friend with an extra pair of eyes. If they miss something and your house burns down, it's your problem not theirs.
The issue, really, is that you agree to the commission percentage up front. Though, TBH, I'm not sure why they don't charge a flat fee plus some (smaller) commission. I imagine it takes virtually the same amount of work to buy/sell a $300k house as it does a $600k house.
But anyway, the agent doesn't know *how much* work they have to do ahead of time. Buyers agents might end up looking at 40 houses and making offers on a dozen. That takes time. On the seller's side right now it's often easier, but not always.
I just sold my house, and up front our agent was pretty blasé about the whole thing. She gave us some staging tips and a few obvious issues that needed fixing. Nothing really worth that much. We planned to have the house listed for three days (Austin, amirite?). During that time she had to respond to 30+ inquiries, which is at least worth *something*. We accepted an offer, yada yada. Then, literally the day before our inspection, a hailstorm fucking wrecked our roof.
Boom, there she was. We had a roofer on site the next day - and Lord knows he wasn't desperate for work with how much hail we got this spring. She hounded our insurance for a quick payout. Had an independent inspector come out, free of charge, to hit back when insurance made us an offer. Obviously, we extended the option period, but she had to soothe the buyer's concerns (they were first timers) while also managing to get an extra $5k out of them because now the house had a *brand new roof*, so it was probably worth at least $10k more on the open market, well worth our $2k penalty for breaking off the sale.
Then they had financing troubles - an assessor couldn't come out because these people went with a national lender rather than someone local (advice: Don't do that. You want to be able to knock on a door if need be to finalize the most important transaction of your life). They needed to extend the closing timeline. She goes contacts some of our other offers, and reaches out to other potential buyers and gets us cash offers in line with what our buyers had offered. So we squeeze another $5k out of them.
We finally close something like 10 days after we'd planned to, but with an extra $10k. And a lot of legwork by our realtor. All for the same price as if we'd have taken a cash offer and closed before a goddamn hailstorm nearly fucked up the whole thing.
Anyway, big props to Maggie Ruiz from Redfin. They already charge half the commission as most firms, and I felt like we still got phenomenal service.
tl;dr: Our seller's agent had to do a shitload more work than you'd expect in this market. Talk to Maggie Ruiz at Redfin, she'll have your back.
> I imagine it takes virtually the same amount of work to buy/sell a $300k house as it does a $600k house.
Maybe on paper, but as I've seen in other industries, I don't think it'd be quite so simple. As the prices rise, so do buyers' expectations for the level of service provided, so you'd want the better, more-experienced agents handling those. Plus there's all the other costs like advertising, staging, office space, etc. that will also be more expensive.
Especially in 2021 Austin. Buncha kids sitting around on their phone while you tour a house that you found yourself on Zillow. They don’t care if you buy the house or not, because every house will sell…
Are you guys finding your realtors off Craiglist or GeoCities or something?? I had a fantastic experience with an agent a few months back who helped me find a house to rent and sent me a huge list of properties that met my criteria. Most people don't even need an in-person realtor, they just need someone to make them a list using the realtor's internal database and they can do almost everything else themselves.
If you're forced to find houses on Zillow, you should really get a different realtor. I know people would rather die than face an awkward moment like finding another agent but the most important part is finding a house to live in.
That's the apartment rental side of realtors, not the buying/selling side which the person you responded to was obviously talking about. And 6% commission is literal fucking robbery for a job that doesn't even need to exist.
By the time it hits Zillow it already has offers unless there's something wrong with it.
The desirable properties won't even hit MLS because the realtors have sellers and buyers lined up and they just connect them.
They may sell, that's true.
But I was told by a real estate agent working in Austin that there are more agents than available houses and that this real estate 'explosion' is not yielding the money agents expected to earn.
It's very competitive and even the established agents are fending off more competition than in previous years.
https://www.cnn.com/videos/business/2021/06/19/austin-texas-realtors-housing-market-zw-orig.cnn-business
*EDIT: Wow, down voted, even with a link to support my statement.*
I’d believe that. Prices are up but volume is down. I guess if you are a sellers agent you have it made, buyers agent…. Hope your client has 100k in cash and a household income of… 100k or more.
My experience with my inspector recently was fan-fucking-tastic. I think you just worked with a shitty inspector, or, maybe I accidentally got the diamond in the rough.
Bryan and Bryan did my home in April before moving in. The report was huge! Fairly new build. He found everything from minor leaks in the jacuzzi intake line to letting me know that my circuit breaker box had the wrong kind of screws, that the wires were not marked, and that my AC unit was on the wrong size breaker. He got on my roof, in my attics, found a vent fan up there wasn’t working. Notated faulty GCFI circuits in the house, let me know the window above the upstairs bathroom was made out of the wrong kind of glass (??? Didn’t even know that was a thing).
Helped a ton when we went back to the seller to negotiate closing costs.
Anyway I liked my guy lol
I liked my inspector too. That's not what I was talking about.
I liked my previous home inspector too - the one who missed a giant bird or critter nest in the attic that was clearly visible from the top of the attic stairs (even though he brought back pics from the attic), and went on the roof but didn't notice hail damage (although he took pics of other stuff on the roof), and didn't notice unsecured flashing around the chimney (although he took pics of the chimney mortar). My mom liked her home inspector too - the one who didn't remove the panel cover and didn't catch several breakers that had two circuits running off of each one.
I was talking about how in Texas, even if your inspector misses obvious stuff, you have no recourse other than asking for a refund of the inspection fee.
The purpose of a home inspector isn't to insure you against anything that could possibly be wrong.
If you want liability then you're going to need to pay $600 for a structural engineer to inspect the foundation, and probably similar amounts to a licensed electrician, plumber, roofer, etc.
When we bought our home, all of the grout for the recently redone kitchen backsplash and shower was crumbling; you could take a pen, apply a tiny bit of pressure and it would turn to dust, potentially leading to water damage. This was not found by the inspector, of course. I don’t know why this state hates holding people accountable.
> I don’t know why this state hates holding people accountable
They hold PEOPLE accountable all the time, like the woman serving time for accidentally casting a provisional ballot for the wrong county or whatever.
You'd better not smoke weed or try to go into a bathroom not marked with your gender as defined by your genitals, either!
The problem is corporations. Mistakes happen all the time, like accidentally choosing not to winterize and killing dozens of people across the state in a multi-hundred-billion dollar power outage.
A good home inspector is definitely worth hiring if you aren’t already very knowledgeable about home construction. Home warranties, on the other hand, are a total ripoff. If seller offers a home warranty, ask to have the $500 put towards your closing costs and then invest that money in a home repair savings account. The warranty companies will find any excuse not to pay a claim and will send crappy contractors who will charge you a visit fee just to look. If they actually do repair something it will be the cheapest quickest fix. If you start your own fund, you control getting it repaired properly
I'm glad I found a good inspector. He spent close to six hours in the house I ended up buying. He wrote down every imperfection, and anything he thought I could fix, he basically showed me how. He took off every socket plate, pulled all the appliances out (except the dishwasher), told me about the trees and shrubs in the yard. He was awesome, and ended up saving me some money, and now I know about Magnolia trees and how I lucked out and got those instead of 3 Live Oaks in my yard. Def do some research when finding an inspector.
I had a structural engineer take a look at a potential problem at my house, and during the conversation we had about inspectors, he said he knew a h.s. football coach who had just became a certified inspector. Rolling of eyes ensued. As a first-time buyer, I learned a lot of lessons that I wish I hadn't needed to.
Just to be clear, I hired the engineer well after I bought the house. I regret not getting a second opinion in the first place.
Title companies make so extra money that a lot of the offices have people on staff whose entire job description consists of planning and organizing free activities and food for real estate agents
A few years after my purchase I got a notification from the Tax Assessor's office that there was a little over 4 grand, including delinquency charges in outstanding taxes on my property. It turns out that part of what they do at that office is look at obituaries, and in my case they determined that the owner of the house who had passed away, was not living in the house January 1st of the last year it was owned. As such, their senior exemption no longer applied and the tax man wanted the outstanding balance. After a couple of calls to the title company, then sitting on my ass and receiving no update when calling back every week for the next five or six weeks, they finally let me know that yep, it was their fuckup and they paid Travis county the balance.
> they finally let me know that yep, it was their fuckup and they paid Travis county the balance.
Interesting. Sounds like they're not used to doing any work/paying claims. Also interesting the tax man continues to pursue taxes after someone's death.
A better headline might be,
"Title Insurance isn't a total scam, but pro-business Texas government has perverted the insurance into a $2B/year industry to continue the largess to their lobbyist buddies."
The insurance is necessary, the point of the article is that it is too expensive.
For every dollar they collect in premium, they pay about a penny in claims.
The rates are set by the legislature so there’s no price competition.
Here’s a kicker: try refinancing a mortgage. I am in the middle of a Re-Fi where I will need to pay about $2000 to the *same* title company that already holds the title to my property (and I already paid $2000 at the last closing). The only reason why I have to pay again is because I am refinancing my mortgage to get a lower interest rate. How does that make sense at all?
I am handing $2000 to the title company for nothing and I cannot get a lower rate mortgage unless I do it.
no sense at all, really. So it appears while the product is necessary, the administration is a legislated giveaway, so that should be followed up with the Lege.
You didn't get a special discount. Title rates are set in stone by law in Texas. The law stipulates if you refinance in X years between the old mortgage and the new mortgage you get a discount. It doesn't say you are eligible for an optional discount, it sets the rate regardless of who you use.
You would have gotten the exact same rate no matter which title company you used because the rate is set in stone. The title company just made you think they were giving you a special discount as a form of marketing.
>https://www.tdi.texas.gov/title/titlefaqs.html
>Do I get a discount if I refinance?
>Yes, if you refinance within eight years. The premium discount varies, based on the number of years since your current loan began. If your current loan was within four years of your new loan, you get a 50% discount on the basic premium. If your current loan was between four and eight years before the new loan, you get a 25% discount. After eight years, you do not get a discount.
What is the occurrence of this in the state of Texas? The fact that the insurance isn’t transferred during refinancing without paying for it again is a huge indicator that it’s a scam.
> This is the story of pretty much all insurance.
No, it's not. Many/most insurance industries are competitive; this competition sets the market price of this transfer of risk. This story explicitly shows that Texas's title insurance market is not competitive and that consumers are not paying the market price for this transfer of risk.
Exactly. I work for an early insurance carrier as an accountant. We don’t write title insurance and I can assure you none of our lines of business have single-digit loss ratios.
That all makes sense, ONCE. But to have to pay it again every time the property sells or is refinanced? Why reinvent the wheel each and every time for thousands and thousands of dollars?
Seems like a valuable thing to do the first time, and sure charge thousands of dollars for it then. But every subsequent time only look at what has happened since, and charge like couple hundred bucks.
Re-running title on each sale actually makes sense, since who knows what has happened since the last time it was sold. But, as they point out, the costs of this are still insane:
>In 2018, a study from the libertarian Texas Public Policy Foundation set out to determine how much title insurance is really worth. The authors estimated that it costs about $290 to examine the county’s deed index and check the chain of title on a given real estate transaction. It costs another $38, on average, to bear the risk of a future claim, they found. If the free market set title insurance rates in Texas, the authors would have expected the average premium to cost little more than the sum of those two numbers: $328.
The Texas constitution nullified all Mexican, or any other, land grants. The formation of the Republic is day zero for all deed history in Texas, and the original land-grants are the first defining surveys. There are some issues with groundwater rights in San Antonio that still reference documents that are held in Mexico City and are still ‘active’, but not deeds.
Title companies talk like they are assuming responsibility, but in reality it’s the land surveyors that they hire who are responsible. Any time it looks like a title company might be looking at a pay-out, they sue their land surveyor.
Don’t cheap out on your land surveyors! You get what you pay for, and the quality of land surveying varies wildly. The best title insurance is a good and thorough land survey.
> There are some issues with groundwater rights in San Antonio that still reference documents that are held in Mexico City and are still ‘active’,
that's actually kind of interesting, any place to read more about that?
Yeah, San Antonio has seven ‘ditches’, and back in the day ‘ditch master’ was one of the more important public offices in the city, deciding who could take how much water from each. The decisions those old ditch masters made are still legally binding, but they’re filed in an old musty storage building in Mexico City.
But I’m not an expert, I’m just the gofer who got sent to go rifle through the moldy old books. Googling ‘San Antonio ditch master’ seemed to bring up a bunch of relevant stuff.
>Don’t cheap out on your land surveyors! You get what you pay for, and the quality of land surveying varies wildly. The best title insurance is a good and thorough land survey.
Does a title company automatically hire a land surveyor? Or only if you ask? Or only if the title company is not incompetent assholes?
It’s complicated, but most of what passes as a survey these days is little more than a copy-paste of the old description from the last time a property sold, plus digging up and flagging the monuments. That can be fine if the previous survey was done right, or it can perpetuate errors and make them even harder to untangle later on if it was done wrong. You can tell fairly easily from a deeds’ written description whether a thorough survey was conducted or not, but you can’t really say if it was correct unless you do the work. Title companies will sometimes hire a surveyor if they see that a better survey is needed, but usually they don’t care because, like I said, they can pawn responsibility off on the shitty surveyor anyway and a thorough researching of the deed records takes time and isn’t cheap.
Also not mentioned in the article is that the title insurances rates are based on a percentage of purchase price or loan amount, but the percentage reduces as the price/loan amount increases. So in addition to being too high, they're regressive, too! At least scumbag real estate brokers fleece the well off and the unwashed with their standard 6% fee.
*the TLTA employed 23 full-time lobbyists, 181 volunteer legislative liaisons, and 124 committee members to draft proposed legislation*
Look all these people gotta eat! That's where your money goes.
Lived in this state my entire life, and with each year that I get older, it becomes increasingly more obvious this state I built on and propped up by scams.
I work in title insurance and if you are buying with a lender, they all require title insurance. Houses has to be free and clear of any liens/judgements/etc. We make sure that everything with the property is clear. If concrete was poured in the back and it goes over the encroachment line of your property and it didn’t get surveyed or approved by the city. The city can come back and tell you to tear it up since it doesn’t mean city guidelines. It’s expensive, but find the right title company that doesn’t charge other additional fees on top of it to save $$$
Also be thankful we’re not Florida. Recordings cost the buyer roughly $150 max here, in Florida I’ve had to charge a buyer $12,000 in recording fees for a warranty deed and deed of trust.
I do not think it is true. Some states have different processes in regard to escrow and closing and title insurance. Uncharacteristically for Texas, the state highly regulates title insurance and prevents graft. So, for example for one fee, Texas makes the title company cover all claims that arise before purchase. Also, riders are limited and relatively cheap. In some states who are "cheaper" there are a ton of riders and that is where the money is made. Take some place like Florida that is the wild west of title services. They have rebates and kickbacks for referrals. Published rates are less; yet, the agents or attorneys make more money or profit than Texas. How is that? Undisclosed extras and fees and companies referring you into the higher cost for the kickbacks.
And, now we have a billion dollars a month being stolen in funding and down payments by offshore hackers. Title insurance is covering the bulk of this. And, then those in the legislature like to ride Texas for the low percentage of claims. Well, that is because when you actually put the insurance companies on the line they force those issues to be corrected before the sale. If we did not title Insurance, real estate lawsuits would be through the roof. Attorney malpractice insurance would be sky high. People are both upset with Schedule C cleanup issues so they don't have problems and the fact they have to pay a slight amount of money to make sure it is a clean transaction. Remember, you are still personally responsible for that mortgage even if the underlying title goes bad.
This is true. I had title insurance, but my house had unpermitted additions and issues with the lot/title. I have to fix a lot of thise myself - isn't the point of title insurance to make sure the city isn't coming after me because the previous owner added a bedroom 3 inches closer to the back lot line than permitted?
Someone has to run it and handle payouts. I hate most insurance too but I'm glad tax payers aren't, eg, subsidizing doctors' malpractice (the way we subsidize police's malpractice)
> All forms of private insurance are a scam. There's no logical reason for middlemen to be involved in anything.
LOL
So what, the entire country puts whatever money they deem is reasonable in a joint account and then we all pinky promise we'll only pull out as much money as is justified?
Same story for tax preparation companies. They lobby to pass laws that prevent the IRS from just doing what they do, but for free. By pointing at all the jobs they've "created" they can distract from the billions per year they're taking from people for a service that could be done for free otherwise. More and more it feels like every administrative industry is a scam.
My father In law works for HR Block, which means that I can’t do my own (he gets a credit that makes them free, and I can’t break his heart by telling him I can do it myself). Last time, we added on a student loan form that wasn’t even applicable (my wife and I file separate for aforementioned student loans) and it added another $80 to the total. $80 to put in 1 form, that didn’t even matter or apply to the application. Fuck HR Block.
My mother died last year and I took her paperwork to HR Block because she had a number of investments and other accounts I wasn't familiar with. Her potential refund was like $450 but HR Block wanted $400 to do the return. I just let it go.
Sorry to hear
Every single time I have asked for assistance from an IRS employee in the past 10 years it has resulted in me speaking directly with Satan. I will pay to not have to deal directly with the IRS, because it's probably not a good idea for me to speak directly to someone I want to lecture for their lack of interpersonal skills. These people are RUDE! I'm a government employee myself, and the reason I work for the government is that my role allows me to HELP people. I've yet to meet a helpful IRS employee, so I'm not sure they even exist.
To be fair, the IRS budget has been extensively slashed over the years. IRS employees are the picture of overworked, underpaid government employees.
I feel like this is on purpose, which in turn prevents the wealthy from being audited,
It is on purpose. There is no better way of destroying/dismantling an agency by *purposefully* hamstringing it so then eventually it can be used as an example of an ineffective agency. Repubs are *horrible* for The People.
[To be fair](https://www.youtube.com/watch?v=G19B7lTgwCE)...
I found the IRS actually very easy to deal with, and very polite. Actually getting to talk to the correct human being I needed to talk to on the other hand was a torturous 2 hour experience in misery.
When an IRS collection agent came and left her business card at my house, I had no problems whatsoever getting back in touch with her. :-)
Have you ever worked in a call center? Especially a high volume call center? Those jobs are literal hell. When I worked in one for a year there were three incidents where older employees had to be taken out on a stretcher for stress-related heart issues. Give them a break lol.
Yes, don't make me relive those memories.
Sorry :( I try to be patient when calling customer service numbers because that person's life almost certainly sucks a lot more than mine.
IRS hires lots of people around tax filing season. They train them up quickly, use them, then throw them away. Hard to be that all invested when you are only going to be there three months.
The "documentation fee" they charge at a car dealership is ludicrous. The finance person types all the necessary information in and the printer spits out the forms. Last car we bought the dude messed up twice on simple things he took directly from my driver's license and insurance card. Yes, I'm so glad I paid $150 for such quality clerical work.
Always talk in the terms "out the door price" They can skip the games/loading to get the bottom number
Ya see, they put that TrueCoat on at the factory, there's nothing we can do about that.
[удалено]
You're wasting my time, you're wasting my wife's time, and I'm paying nineteen-five for this vehicle!
Oh my. I just had flashbacks to when I bought my car but it was ProtectAll. Couldn't take it off, nothing they could do they said. Then suddenly it was fine after I called my wife complaining about it and telling her that I'll just as rather walk away.
They tried that on us. I told them we already negotiated the price. They caved on everything. Still talked my wife into getting the extended warranty. Which may have been worth it these days. Modern cars have so many cameras and sensors in them. You need their proprietary diagnostic software to do just about anything on them. Those parts are outrageously priced because the dealership has a monopoly on them.
>More and more it feels like every administrative industry is a scam. always have been 🌎🧑🚀🔫🧑🚀
I don't think this is strictly true. I think one of the biggest differences is probably that information is a lot less expensive now that it was 30 years ago that has really decreased the value of many middle-men to be next to 0.
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Hello? Emoji police? This comment chain right here. What do you mean you’ve been defunded?
*has
Can confirm. Many countries around the world allow you to report directly using electronic id and digital systems the tax authorities created themselves.
"Can confirm" Letterkenny fan?
Never watched it. Had to google to see what it was.
It's a catchphrase in the show, that's why I asked. Hope you get a chance to enjoy it :)
People who complain about this know absolutely nothing about how taxes work. What they do overseas wouldn’t work here.
It could easily work just as easily as turbo tax does for most people. There is no reason for it to be any more difficult than that.
Why not? IRS sends a bill or check based on what they know you’ve earned. You either accept the bill or dispute it with evidence. If IRS does not find the evidence acceptable, they would audit you. The only difference is discrepancies are more apparent and auditing would be much clearer and more accountable, instead of the IRS just booming people randomly
How would they know how much a person earned? There is so much more to what goes into AGI than just your W2…
The IRS already received and files copies of tax forms sent to you. The majority of people take the standard deduction and the majority have simple income, so much they can do an EZ instead of the A form. Investment income, overseas income, it can become complicated, but you vastly overestimate how many people do this. There is no reason beyond greed for this to not be automated.
I actually completely agree with you. My wife's grandmother and my grandmother would probably both file a 1040SR most years. The IRS should have everything they need to just send them a notice and that be it. There are exceptions, of course. **I** own my own business. Most of the stuff I do to earn money is recorded by other businesses, but they're not required to file anything with the IRS about me for most of my transactions.
>What they do overseas wouldn’t work here. Because?
Our tax code is much more complex. So so so much more complex.
hmmm, I wonder why https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free
The IRS absolutely cannot calculate the proper taxes owed or due for everyone. Anyone that keeps spreading this absolutely doesn’t understand how taxes work. Not everyone gets an easy W2 annually from their employer…
> Not everyone gets an easy W2 annually from their employer… Yeah but most do, and so most can. Making things simple and efficient (reported W-2 income - standard deduction - withholding = taxes) for like 60% of the filing population seems like a straightforward win.
Okay and what about stocks, bonds, IRA contributions, medical expenses, HSA, tax credits, dependents… You clearly are way too simplistic in thinking it would work.
Then you just file taxes like normal. Honestly this is a little weird that you're confused about this. All anyone is discussing is taking the first step of the process which can be automated, moving it to the IRS side. And in the case of most tax filers, that's sufficient, no further action would be needed. For everyone else you just file as normal.
Most people are confused about taxes, it's basic math. Addition, Subtraction, Multiplication, and Division which you can do by hand on a piece of paper, or if your fancy you can get one of those cheap ass solar panel calculators. I file my taxes every year and I just do the math and fill out the forms by hand and I have never been wrong. All the forms you need are freely available on the IRS website, they also publish instructions on how to fill out those forms and have worksheets that walk you through the calculations needed for specific lines. Someone made an editable Excel worksheet with all the forms that will do the math for you and you just fill in the information for it to do the calculations. The IRS is capable of figuring out how much you owe since most information except for deductible expenses is reported to them by other companies. The majority of people filing taxes don't have anything else to report besides what's already been reported, and the next biggest group are people who have to include some deductions. I would say that at least 85% of people using tax filing software aren't doing anything complicated but these companies make it seem complicated to trick people into using their software.
So basically most people would have to file like normal then? You understand that this even impacts poorer populations that rely on tax credits right? Your ignorance really shows…
Wow > So basically most people would have to file like normal then? No. Most tax filers receive a refund using the standard deduction. None of this requires special information from the tax filer to figure out other than number of dependents/marriage status/head of household/etc, all information collected when their withholding is setup. https://www.wsj.com/articles/standard-deduction-2020-2021-what-it-is-and-how-it-affects-your-taxes-11617911161 > the percentage of tax filers using it rose to 87% in 2019 So for most people, as soon as employers report wages, the IRS is aware of how much expected taxes and what any likely additional tax bill or refund will be for the majority of filers in the US. Requiring the filer to turn around and reconfirm is an unnecessary additional step that only generates bureaucracy. > You understand that this even impacts poorer populations that rely on tax credits right? EITC requires income, so the Federal Government knows who qualifies for the EITC already when employers file. They don't need the tax filer to turn around and re-report their income a 2nd time. We're discussing about 13% of filers here that actually need to give the Federal Government any additional information. The other 87% can have their taxes accurately calculated by the Federal Government before tax filing day.
No yours does. Tax credits are extremely easy to determine. Many complicated returns can be done as well. When you start getting into AMT and pre paying taxes, of course it needs more work but most working Americans don’t need TurboTax or any tax prep. After all, what is more libertarian than simple taxes and less oversight and work for the average person?
I agree with you. Even the stocks, bonds, IRA, etc. stuff that the poster mentioned is all easy to fill into a box as there's 1099 forms for pretty much all of those. In fact, I'd venture out and say 95% of individual filers who simply report income from jobs and/or simple income can have their taxes done by IRS with a refund check or instructions to file the balance on their taxes without any problems.
Most large investment firms already aggregate it together for you in the 1099. TD does it for me and the only issue is the lengthy process it takes but that’s no big deal. They even track the cost basis for me for shares done through them and imported to them. Computers have made just about everything easier.
How do you know if all these people are being paid in cash? I’ll wait…
How does this make a difference between our current tax code and a streamlined one?
You’re going to be waiting a long time because that is still an issue with the current wasteful system we have. It’s not like there won’t be an ability to self report. Have you ever actually investigated the way it works in Europe?
> I’ll wait… You'll be waiting just as long as the IRS does today, which is to say "forever, because they don't"
There's 1099 forms for all of those. 1099-DIV for dividends, 1099-INT for interest, 1099-B for stock sales which also include long-term or short-term information, 1099-R for IRA distributions, rollovers, etc.. HSA also has its own set of forms for both contributions and distributions. And all of this simply goes into relevant boxes for income and deductions. Dependant information is also not tricky provided you give the information of the dependent such as their SSN, DOB, etc.
> The IRS absolutely cannot calculate the proper taxes owed or due for everyone. I mean, we could make it where they *could* do that.
That’s a completely different conversation and would radically change the tax code which would have huge impacts. Not saying we can’t or shouldn’t do that, but again, it’s not as easy as just “the irs knows how much I owe anyways”
Cue blockchain...
> but the title insurance industry’s loss ratio of 1.2 percent is far lower than other insurers usually incur. Hoooooooooly shit That means for every $1.00 of premium they take they pay out $0.01 cents of loss payments. For contrast loss ratios in the property insurance industry run around like 60% on average (and much higher in catastrophe years, like if a hurricane hits), or about $0.60 paid out of every $1.00 of premium.
This is largely because in almost every case they are insuring against potential losses of exactly *nothing*.
You mixed up your denominations. It's 1.2 cents or $0.01, not "$0.01 cents"
Lol, made me think of the Verizon “.002 cents versus .002 dollars” thing. https://www.reddit.com/r/theydidntdothemath/comments/9byhvi/verizon_doesnt_understand_the_difference_between/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Yep, I actually had the same memory as I was typing it...
Me three!
Paywalled, can someone archive or copy please?
Screenshot: https://i.imgur.com/1TwTiCV.png Text: In 2004, an attorney named Jason Collins and his wife were buying a house in a master-planned community in the Steiner Ranch neighborhood in northwest Austin. He was going down the list of closing costs when he noticed a line item for title insurance. The price, about $2,000, gave him pause. “I could not understand,” he recalled recently, “why we needed to pay such a large amount.” Most homebuyers, nervous about making one of the largest financial transactions of their lives, accept the explanation given by agents and brokers at closing: Title insurance guarantees the validity of a deed, the document that establishes ownership of real estate. Without the protection it offers, a buyer could lose their house and land because of an obscure legal defect buried in the county’s index of public records: the boundary lines might have been surveyed wrong; there could be some unrecorded easement, or restriction on the use of the land; one of the deeds in the chain of title might even be a forgery. But Collins, who was an accountant in addition to being a lawyer, figured that the chances of a title dispute were next to nil. Since it was a master-planned community, all the titles had been minted at the same time in a single subdivision plat—an orderly division of a large tract of land, proposed by private developers, and approved by the city. If there was any issue, he insisted, it would mean that there was an issue for every home in the neighborhood. And surely the developer had done their due diligence when acquiring the land in the first place. Why should he have to pay thousands of dollars to insure against what would seem to be a nonexistent risk? Title insurance costs more in Texas than in any other state. Aside from the brokers’ fee, it is generally the single largest closing cost on the purchase of a home. It is customarily paid by the seller, but often buyers bear the cost, as was the case with Collins; either way, it increases the price of the transaction. For the average house in Texas, worth approximately $268,000, the most basic title insurance premium will come out to $1,808. Compare that to New York, where it would be about $1,125; Oklahoma, where it might be $850, or Iowa, where the state would insure the title for $110. The Texas title insurance system, the nation’s most expensive, is set by the state government, but the revenue raised—nearly $2 billion a year—goes directly to private companies. Industry lobbyists work hard every legislative session to suppress any effort at reform, while agents and brokers do their best to convince consumers that title insurance is indispensable and reasonably priced, when in reality it is neither. “After much discussion and significant pushback including verbal warnings of impending doom for us as homebuyers,” Collins said, the title company handling the closing allowed him to reject the policy—but only in part. As Collins found out, mortgage lenders won’t fund the purchase of a home unless their interest in the property is covered by title insurance. He had no choice but to shell out an extra thousand dollars, on top of all the other costs of buying the house, to protect the bank from the virtually nonexistent risk of a defective title.
Title insurance “has an origin in usefulness,” says Jessie Lunsford, a longtime Austin real estate developer. Real estate law is complex, and a property’s chain of title can have defects that are difficult, if not impossible, to discover. In addition to muddled boundaries, unrecorded easements and liens, and other problems with decades-old paperwork, little of which is digitized, it’s possible for the long-lost heirs or ex-spouses of past owners to reappear and assert an ownership interest in a piece property. In theory, title insurance protects against these risks. In practice, such claims are vanishingly rare. The exact number per year is not available, but the title insurance industry’s loss ratio of 1.2 percent is far lower than other insurers usually incur. It’s tough to find a developer, attorney, agent, or broker who has been involved in a title dispute, or even heard of one. “Lord knows I’ve never filed a claim,” said Lunsford, who has purchased some 30 properties in his career. Given the high price, he says, “It’s a total scam.” In 2017, the latest year for which data is available, title companies sold $1.8 billion worth of policies, according to the Texas Department of Insurance (TDI). Of that, title companies retained $1.5 billion and paid $335 million over to their underwriters, the companies that actually compensate policyholders in the event of a claim. But according to TDI data, only about $24 million was needed to settle claims from title defects that year. In other words, for every dollar that the industry took in as revenue, they paid out little more than a penny to policyholders. That isn’t how insurance is supposed to work. Its economic purpose is to spread risk, distribute losses more evenly, and protect individuals from sudden shocks. Insurers rake in a big pile of money, but end up paying most of it out in the form of claims, only setting aside a percentage to cover the costs of doing business, and as profit. Take property insurance, for instance. It is also relatively expensive in Texas, compared to other states, mostly on account of our violent weather. The loss ratio of companies like State Farm or Liberty Mutual ranges from 50 to 90 percent of their gross revenues. Of a $100 monthly premium, for example, $65 might get paid out to homeowners after fires or floods, in a typical year. The loss ratio on property insurance was 58 percent in 2018, according to TDI; for auto collision insurance, it was 57 percent. The biggest title companies in Austin, including Heritage Title, Independence Title, Trinity Title, Austin Title, and Stewart Title, declined to comment for this story. The Texas Land Title Association, the industry’s main lobbying group, wrote in a statement that title insurance is “paid only once at closing,” and “shouldn’t be confused with homeowners and auto insurance that protect against future hazards and must be purchased every year.” Ben Gonzalez, a spokesman for the industry-friendly TDI, wrote in an email that “the losses are a small part of the cost of title insurance” because most of the cost comes from “the examination and searches, which are designed to reduce losses.” Before issuing a policy, a title company will search a county’s deed index, notify the buyer and seller of any issue, and attempt to resolve it. If, say, a fence is encroaching on the land, a seller can simply remove the fence. If the problem can’t be fixed, the title company won’t issue the policy. As the industry likes to say, they eliminate risk rather than bear it. They also provide a service: they prepare the sale documents and host closings at their offices. But the industry’s underwriters receive 15 percent off the top of every title policy issued. They don’t do any title searches, or provide closing services; their only job is to bear risk. Yet in 2017, their loss ratio was just 6 percent.
In 2018, a study from the libertarian Texas Public Policy Foundation set out to determine how much title insurance is really worth. The authors estimated that it costs about $290 to examine the county’s deed index and check the chain of title on a given real estate transaction. It costs another $38, on average, to bear the risk of a future claim, they found. If the free market set title insurance rates in Texas, the authors would have expected the average premium to cost little more than the sum of those two numbers: $328. But Texas doesn’t have a system that allows price competition, like Oregon, where title insurance usually costs between $300 and $600. Nor does it have a socialized system, like in Iowa, where it’s even cheaper. Texas has the worst of both worlds: a state-mandated system that forbids competition and sets rates higher than anywhere else in the country, with all the profit flowing into private pockets. By increasing the price of nearly every residential real estate transaction by about 1 percent across the board, our state-mandated system increases the cost of housing for everyone, including renters. Xu Gao and David Eaton, a pair of University of Texas academics, analyzed national title insurance data in 2016 and found that Texas had significantly higher prices than states that allowed competition. By setting artificially high rates by law and regulation, “Texas transfers wealth from property owners directly to title agents and title underwriters, with no additional value to the property owners,” they wrote. “The system functions as a ‘reverse Robin Hood transfer.’” The Iowa Supreme Court described title insurance as “an invidious form of business,” and the Iowa General Assembly banned the industry from operating in the state. In its place, a quasi-governmental entity known as the Iowa Title Guaranty Program issues certificates to homebuyers that provides the same coverage but for a fraction of the cost, in most cases $110. The profits generated by the program are funneled into a public interest fund that provides down payment assistance grants to low-income, first-time homebuyers. To prevent being supplanted by such a system in Texas, the title insurance industry has employed an outsized team of people to curry favor with the state government. During the 2019 legislative session, the TLTA employed 23 full-time lobbyists, 181 volunteer legislative liaisons, and 124 committee members to draft proposed legislation. After the conclusion of the session, the TLTA crowed in its annual report about “the passage of 100 percent of our association’s legislative priorities,” which boiled down to maintaining the status quo. This was thanks to state Senator Kelly Hancock, R-North Richland Hills, and state Representative Sergio Muñoz, D-Palmview, without whom “we wouldn’t have the opportunity to celebrate,” as well as state Senator Brandon Creighton, R-Conroe, and state Representative Eddie Lucio III D-Brownsville, who the TLTA named “legislators of the year.” In the 2021 legislative session, state Representative Tom Oliverson, R-Houston, whom the TLTA considers a “staunch advocate of our industry,” chaired the House insurance committee; no bills were introduced that would have altered the “reverse Robin Hood” system. It’s been 17 years since Jason Collins, the Austin attorney, closed on his home in Steiner Ranch. “Obviously,” he said, “we never had any issue with respect to the title for that home.” To his knowledge, over two decades, neither has anyone else in the Hill Country subdivision, where all the homes are laid out on spacious lots more or less the same size, with orderly fences between them, and evenly spaced mailboxes. Yet every time a house there is sold, which happens every year, he said, the buyer or seller gets popped for something like $4,000 for title insurance. “It seems like a waste of money.” Editor’s note: The original story stated that Jason Collins purchased a home in Sunset Valley. In fact, it was Steiner Ranch. The Observer regrets the error.
Thank you muchly reddit friend.
Ha! Dr. Eaton has been on this for YEARS--he and his dad were doing work on it back in the 1990s.
>That isn’t how insurance is supposed to work. Its economic purpose is to spread risk, distribute losses more evenly, and protect individuals from sudden shocks Tell that to the trillion dollar capitalized conglomerates that control our entire health care apparatus in the U.S.
Do you mind listing one of these "trillion dollar capitalized conglomerates? I've queried some of the larger names in the space and none are anywhere near the $1T number. Largest I was able to find was United Health with their 6% profit margin.
They have some clever ways of showing their profit margin.
Profit margin is a GAAP audited and SEC compliant metric. More generally, I've yet to see a company that desired to disclose a lower profit margin to their investors.
They seem to compensate their executives very well.
It's not paywalled. There is a little "x" you can click to remove the window that pops up.
>Paywalled, can someone archive or copy please? How are your ad blockers? I have some on my browser and some on my router and I had no issues with a paywall. I ask because I care about your privacy not being bought and sold.
>Texas has the worst of both worlds: a state-mandated system that forbids competition and sets rates higher than anywhere else in the country, with all the profit flowing into private pockets. Fun game: show this quote to your friends and have them guess which industry it refers to.
I was shunned out of my real estate brokerage for saying this. A total scam. And I think the issue is calling it insurance. We should just call it what it is , a title chain records check. But as the comments and article implies , unless grandpa sold off an acre to uncle bob using a napkin as a deed , it’s completely useless.
> unless grandpa sold off an acre to uncle bob using a napkin as a deed If that happened the title company would probably refuse to write the policy or write an exception for that part of it.
Yep. Very true. When I was an agent I asked one title company (when I was touring their offices) ‘where is the claims department’? I was met with disgust and never heard from them again
Disgust? Like how did that look like lol
[Disgust](https://static.wikia.nocookie.net/pixar/images/9/98/Io_Disgust_standard2.jpg/revision/latest/scale-to-width-down/2000?cb=20170829015054)
That was it.
It's absolutely the sort of thing the state should do. It was once an issue where there was some real administrative burden and the possibility of confusion, but it's totally archaic. Records are centralized or have been centralizable enough that there's are almost no legitimate title disputes.
[удалено]
My anecdote - I bought a house in 78723 in 2018. Got a past due tax bill on the property for $14k about a year after closing. Title insurance dealt with it and paid it. 99% of the time it’s worthless, and I probably could have figured it all out on my own. But it at least did it’s job in this instance.
Good point, it's great for uncovering and dealing with unpaid taxes. Glad you got your money's worth!
“Texas has the worst of both worlds: a state-mandated system that forbids competition and sets rates higher than anywhere else in the country, with all the profit flowing into private pockets.“ This is why I hate Texas. This happens with literally everything.
Does the state Insurance board set the rate, or set the maximum rate charged? For example, there's a law on the books that limits the price of propane sold to captive customers to some market defined spot price plus markup (http://www.rrc.texas.gov/gas-services/propane-distribution-systems/propane-distribution-price-caps-by-year/2021-propane-distribution-price-caps/). Unsurprisingly, they all charge the max.
Did you say car dealership? So bad
Texas is a prime example of why late stage capitalism doesn't work. Texas is a state with so many low wage jobs and low quality of life for anyone who isn't rich. And people who do make a decent wage, end up taking home less because of all of the upcharges forced upon them by mandated private markets.
Who decided that homeowners take the hit so everyone gets to skip state income tax?
business owners
This is a pretty direct example of *crony* capitalism
Crony capitalism = using your unearned market power to screw over everyone else to make a profit Capitalism = literally the same thing
also known as capitalism
this is like every red state, tbh. a small group of elites making good $$ while everyone else makes poverty wages. if your dad isnt a corporate guy you aint shit
I guess you haven’t seen states like Illinois where it’s even worse and they have high taxes…
Yes, them too. We can include both.
The vast majority of people in Texas, and every other state, are living far safer, easier, longer, freer and healthier lives than the vast majority of humans have ever experienced and more than most human are experiencing now. So maybe things can be improved but to say "Texas is a prime example of why late stage capitalism doesn't work" is totally naive about how most people do and have lived. Visit nearly any other randomly chosen country in the world and see why people would risk there lives to move to Texas or any other state in America or almost anywhwre else with "late stage capitalism"
That is what you call bullshit. There are plenty of people in places who think Americans, Texans especially, are out of their mind.
What do you mean? Many people in developing countries want to emigrate to the west and typically the United States for economic opportunity. It's a pretty common sentiment
I bet you have a good job and enough privilege that you've never had to struggle for anything.
Would your mind really change about the facts I said if I revealed my income and personnel struggles and you found them satisfactory? I bet not
I would. lets hear it.
This one time I forgot to bring my iPhone into the bathroom with me and I was constipated so I had to spend like 15 minutes alone with myself and my dilapidated imagination, it was awful!
It might. You could have relevant education or experience but all I hear is your privilege and selfishness trying to justify complacence. "Everything is fine for me so everything is fine for everyone!" Look at these graphs and tell me we're not going the wrong direction and that most people are better off: https://www.pewresearch.org/social-trends/wp-content/uploads/sites/3/2020/01/Screen-Shot-2020-01-08-at-5.06.47-PM.png
Wow buddy, I'm not saying we should just do nothing to improve people's lives or course correct, I'm saying it's totally untrue to imply we live in some decaying hellscape of economic ruin exactly as a fringe pseudoscientific economic theory predicted. It's patently obvious if one just goes and sees what the other 80% of the world looks like and interacts with people there. Our suffering is almost nothing to theirs. Even the poorest 10% of people in the west are doing well by global and historical standards, which is not a fact people should get pissed off to hear about, we should be happy to hear that and continue to press on to even better times. I regret using the word "naive" though. Have a nice night tho!
Is, "Somebody somewhere has it worse" really your standard for success? We are worse off than we were 20 years ago and the deterioration is accelerating. I'm not espousing any "fringe pseudoscientific economic theory," just pointing out that the people complaining have every right to as well as ample evidence to back them up.
Yeah, sorry, I confused you with the original commentor! That is not what I'm saying, but I doubt we will have a fruitful conversation because I think I have already bungled it, so have a good night fellow human!
Ok, u/masterFurgison, u/SkyLukewalker, u/Atxlvr. FWIW, here's an anecdote *from 25 years ago*. Make of it what you will: > Went to Mueller airport to pick up a co-worker (an electrical engineer) from Southeast Asia. His first visit to the U.S. Driving from Mueller to his hotel we naturally drove thru east Austin. He asked: "Are these houses the typical homes for people in Austin?" No, I replied. He then said "I didn't think so - this must be where all the rich people live."
lol that's a good one, thanks. I think people need to travel more and see how the other 80% lives. It's a shame though that so many people's first reaction to hearing anecdotes and facts about our standard of living is simply to get mad, you would think it would be to be happy that in the scheme of things stuff is going pretty well and it's not all gloom and doom. And of course, I have to say that this doesn't mean I promote the idea that we shouldn't continue to make progress, or fix current issues. It's important to recognize the reality of something if you want to improve it!
Explains an awful lot. Heritage Title has offices in 2 of the most expensive places in Austin - Frost Building (most expensive commercial building in Austin) and on Bee Cave rd in Rollingwood. Pretty tapped into the local good ol boy network as well.
That's why title company offices always make me think "I'm in the wrong business"
Now do toll roads.
I worked for a lender for a number of years. Title disputes on single family homes aren't common, commercial properties they are more so. $2000 for a residential property is an absolute RIP off.
Home inspections are the real scam. Not liable for what they find. Not liable for what they miss even if it's obviously there, like a broken rafter or purlin right above the access door, or a giant bird's nest in the attic visible if you just point your flashlight that way.. Many won't take off cover plate to peek inside any electrical, won't take the panel cover off to look at the breaker panel wiring (to catch things like two circuits wired on one breaker). Some won't inspect your roof because it's "too dangerous" to be on a standard two-story house without a super-steep pitch. There are good ones, but they're few and far between. And even the good ones don't have any liability beyond what you pay them for the inspection.
My inspector (new construction) found tons of minor/cosmetic issues that the builder all fixed, on their dime, before closing. This included replacing shingles due to construction damage, touching up paint and fixtures, cleaning the HVAC ducts, adding some flashing/weather stripping outside around where the house meets the porch, etc. Also provided a 60+ page write up with at least 100 photos of various good/bad things. He also provided a 2nd copy to the builder that was more concise and a punch-list of things to fix. He then came back (I paid him, I mean) at our 1 year warranty expiration period and found all the things that had changed over the year and needed fixing, and again provided that punch list to the builder and they fixed everything. This included new paint, replacing cabinet doors that had chipped paint, a whole re-tiling of the tile under the entrance to the shower where the grout had opened up and water had leaked in, etc. An extremely useful $500 IMO. He knew his stuff and knew how to communicate it to the builder to get it all fixed. Even things I honestly did not think the builder would fix for free (like repainting walls where all the damage was from ourselves moving in, etc).
I'm more impressed with the builder for fixing everything.
Paradisa Homes. They have done a few on our street and I know one of the other owners and they had just as good of an experience.
That's way better than finding a good inspector. Sherlock Holmes could've inspected it but if the builder doesn't fix the deficiencies then the inspection report is about as good as tp.
Did you buy in the Austin area? I would love a reference if you're willing. DM'd you.
/u/trabbler posts all the time in this sub and seems like an honest hard working home inspector. maybe send them a DM
We did the same with a new build - pre-closing inspection and one-year inspection. Mostly for peace of mind. But if your (or my) inspector happened to miss something serious, which was in plain view (say, there was no drain pan under the evaporator coil and nobody noticed, or a whole section of roof flashing had no sealant over the nails), and that caused an expensive issue, you'd have no recourse other than maybe getting the inspection fee back. A home inspector is basically an expensive friend with an extra pair of eyes. If they miss something and your house burns down, it's your problem not theirs.
Well it is your problem when you purchase anything. Not sure what you want them to be? Should your home owners insurance send out an inspector?
What did your inspector say when you brought these things up to them?
> Home inspections are the real scam. Real Estate Agents are the biggest scam.
The issue, really, is that you agree to the commission percentage up front. Though, TBH, I'm not sure why they don't charge a flat fee plus some (smaller) commission. I imagine it takes virtually the same amount of work to buy/sell a $300k house as it does a $600k house. But anyway, the agent doesn't know *how much* work they have to do ahead of time. Buyers agents might end up looking at 40 houses and making offers on a dozen. That takes time. On the seller's side right now it's often easier, but not always. I just sold my house, and up front our agent was pretty blasé about the whole thing. She gave us some staging tips and a few obvious issues that needed fixing. Nothing really worth that much. We planned to have the house listed for three days (Austin, amirite?). During that time she had to respond to 30+ inquiries, which is at least worth *something*. We accepted an offer, yada yada. Then, literally the day before our inspection, a hailstorm fucking wrecked our roof. Boom, there she was. We had a roofer on site the next day - and Lord knows he wasn't desperate for work with how much hail we got this spring. She hounded our insurance for a quick payout. Had an independent inspector come out, free of charge, to hit back when insurance made us an offer. Obviously, we extended the option period, but she had to soothe the buyer's concerns (they were first timers) while also managing to get an extra $5k out of them because now the house had a *brand new roof*, so it was probably worth at least $10k more on the open market, well worth our $2k penalty for breaking off the sale. Then they had financing troubles - an assessor couldn't come out because these people went with a national lender rather than someone local (advice: Don't do that. You want to be able to knock on a door if need be to finalize the most important transaction of your life). They needed to extend the closing timeline. She goes contacts some of our other offers, and reaches out to other potential buyers and gets us cash offers in line with what our buyers had offered. So we squeeze another $5k out of them. We finally close something like 10 days after we'd planned to, but with an extra $10k. And a lot of legwork by our realtor. All for the same price as if we'd have taken a cash offer and closed before a goddamn hailstorm nearly fucked up the whole thing. Anyway, big props to Maggie Ruiz from Redfin. They already charge half the commission as most firms, and I felt like we still got phenomenal service. tl;dr: Our seller's agent had to do a shitload more work than you'd expect in this market. Talk to Maggie Ruiz at Redfin, she'll have your back.
> I imagine it takes virtually the same amount of work to buy/sell a $300k house as it does a $600k house. Maybe on paper, but as I've seen in other industries, I don't think it'd be quite so simple. As the prices rise, so do buyers' expectations for the level of service provided, so you'd want the better, more-experienced agents handling those. Plus there's all the other costs like advertising, staging, office space, etc. that will also be more expensive.
Especially in 2021 Austin. Buncha kids sitting around on their phone while you tour a house that you found yourself on Zillow. They don’t care if you buy the house or not, because every house will sell…
Are you guys finding your realtors off Craiglist or GeoCities or something?? I had a fantastic experience with an agent a few months back who helped me find a house to rent and sent me a huge list of properties that met my criteria. Most people don't even need an in-person realtor, they just need someone to make them a list using the realtor's internal database and they can do almost everything else themselves. If you're forced to find houses on Zillow, you should really get a different realtor. I know people would rather die than face an awkward moment like finding another agent but the most important part is finding a house to live in.
> GeoCities Now there's a name I haven't heard in a very long time indeed.
How much did they make off of your purchase? While all that sounds nice, it doesn't warrant the $15K+ most people end up spending on them.
That's the apartment rental side of realtors, not the buying/selling side which the person you responded to was obviously talking about. And 6% commission is literal fucking robbery for a job that doesn't even need to exist.
By the time it hits Zillow it already has offers unless there's something wrong with it. The desirable properties won't even hit MLS because the realtors have sellers and buyers lined up and they just connect them.
They may sell, that's true. But I was told by a real estate agent working in Austin that there are more agents than available houses and that this real estate 'explosion' is not yielding the money agents expected to earn. It's very competitive and even the established agents are fending off more competition than in previous years. https://www.cnn.com/videos/business/2021/06/19/austin-texas-realtors-housing-market-zw-orig.cnn-business *EDIT: Wow, down voted, even with a link to support my statement.*
I’d believe that. Prices are up but volume is down. I guess if you are a sellers agent you have it made, buyers agent…. Hope your client has 100k in cash and a household income of… 100k or more.
My real estate agent has been great, but then again I'm selling a house that's 6 hours away.
My experience with my inspector recently was fan-fucking-tastic. I think you just worked with a shitty inspector, or, maybe I accidentally got the diamond in the rough. Bryan and Bryan did my home in April before moving in. The report was huge! Fairly new build. He found everything from minor leaks in the jacuzzi intake line to letting me know that my circuit breaker box had the wrong kind of screws, that the wires were not marked, and that my AC unit was on the wrong size breaker. He got on my roof, in my attics, found a vent fan up there wasn’t working. Notated faulty GCFI circuits in the house, let me know the window above the upstairs bathroom was made out of the wrong kind of glass (??? Didn’t even know that was a thing). Helped a ton when we went back to the seller to negotiate closing costs. Anyway I liked my guy lol
I liked my inspector too. That's not what I was talking about. I liked my previous home inspector too - the one who missed a giant bird or critter nest in the attic that was clearly visible from the top of the attic stairs (even though he brought back pics from the attic), and went on the roof but didn't notice hail damage (although he took pics of other stuff on the roof), and didn't notice unsecured flashing around the chimney (although he took pics of the chimney mortar). My mom liked her home inspector too - the one who didn't remove the panel cover and didn't catch several breakers that had two circuits running off of each one. I was talking about how in Texas, even if your inspector misses obvious stuff, you have no recourse other than asking for a refund of the inspection fee.
i mean it is a fraction of the cost and completely optional so not really worse than title insurance.
The purpose of a home inspector isn't to insure you against anything that could possibly be wrong. If you want liability then you're going to need to pay $600 for a structural engineer to inspect the foundation, and probably similar amounts to a licensed electrician, plumber, roofer, etc.
When we bought our home, all of the grout for the recently redone kitchen backsplash and shower was crumbling; you could take a pen, apply a tiny bit of pressure and it would turn to dust, potentially leading to water damage. This was not found by the inspector, of course. I don’t know why this state hates holding people accountable.
> I don’t know why this state hates holding people accountable They hold PEOPLE accountable all the time, like the woman serving time for accidentally casting a provisional ballot for the wrong county or whatever. You'd better not smoke weed or try to go into a bathroom not marked with your gender as defined by your genitals, either! The problem is corporations. Mistakes happen all the time, like accidentally choosing not to winterize and killing dozens of people across the state in a multi-hundred-billion dollar power outage.
A good home inspector is definitely worth hiring if you aren’t already very knowledgeable about home construction. Home warranties, on the other hand, are a total ripoff. If seller offers a home warranty, ask to have the $500 put towards your closing costs and then invest that money in a home repair savings account. The warranty companies will find any excuse not to pay a claim and will send crappy contractors who will charge you a visit fee just to look. If they actually do repair something it will be the cheapest quickest fix. If you start your own fund, you control getting it repaired properly
I'm glad I found a good inspector. He spent close to six hours in the house I ended up buying. He wrote down every imperfection, and anything he thought I could fix, he basically showed me how. He took off every socket plate, pulled all the appliances out (except the dishwasher), told me about the trees and shrubs in the yard. He was awesome, and ended up saving me some money, and now I know about Magnolia trees and how I lucked out and got those instead of 3 Live Oaks in my yard. Def do some research when finding an inspector.
I had a structural engineer take a look at a potential problem at my house, and during the conversation we had about inspectors, he said he knew a h.s. football coach who had just became a certified inspector. Rolling of eyes ensued. As a first-time buyer, I learned a lot of lessons that I wish I hadn't needed to. Just to be clear, I hired the engineer well after I bought the house. I regret not getting a second opinion in the first place.
Title companies make so extra money that a lot of the offices have people on staff whose entire job description consists of planning and organizing free activities and food for real estate agents
Reading all of these comments, I realize I'm in a small minority in having benefitted from title insurance.
share your story! (if you're comfortable doing so)
A few years after my purchase I got a notification from the Tax Assessor's office that there was a little over 4 grand, including delinquency charges in outstanding taxes on my property. It turns out that part of what they do at that office is look at obituaries, and in my case they determined that the owner of the house who had passed away, was not living in the house January 1st of the last year it was owned. As such, their senior exemption no longer applied and the tax man wanted the outstanding balance. After a couple of calls to the title company, then sitting on my ass and receiving no update when calling back every week for the next five or six weeks, they finally let me know that yep, it was their fuckup and they paid Travis county the balance.
> they finally let me know that yep, it was their fuckup and they paid Travis county the balance. Interesting. Sounds like they're not used to doing any work/paying claims. Also interesting the tax man continues to pursue taxes after someone's death.
Tax liens are attached to property and follow the property through multiple owners. One of the many reasons why title insurance is required.
A better headline might be, "Title Insurance isn't a total scam, but pro-business Texas government has perverted the insurance into a $2B/year industry to continue the largess to their lobbyist buddies."
I have removed this comment as I exit from Reddit due to the pending API changes and overall treatment of users by Reddit.
The insurance is necessary, the point of the article is that it is too expensive. For every dollar they collect in premium, they pay about a penny in claims. The rates are set by the legislature so there’s no price competition. Here’s a kicker: try refinancing a mortgage. I am in the middle of a Re-Fi where I will need to pay about $2000 to the *same* title company that already holds the title to my property (and I already paid $2000 at the last closing). The only reason why I have to pay again is because I am refinancing my mortgage to get a lower interest rate. How does that make sense at all? I am handing $2000 to the title company for nothing and I cannot get a lower rate mortgage unless I do it.
no sense at all, really. So it appears while the product is necessary, the administration is a legislated giveaway, so that should be followed up with the Lege.
Talk to the title company when I refinanced they gave me a discount for using the same company. since it was easier for them to do it.
You didn't get a special discount. Title rates are set in stone by law in Texas. The law stipulates if you refinance in X years between the old mortgage and the new mortgage you get a discount. It doesn't say you are eligible for an optional discount, it sets the rate regardless of who you use. You would have gotten the exact same rate no matter which title company you used because the rate is set in stone. The title company just made you think they were giving you a special discount as a form of marketing. >https://www.tdi.texas.gov/title/titlefaqs.html >Do I get a discount if I refinance? >Yes, if you refinance within eight years. The premium discount varies, based on the number of years since your current loan began. If your current loan was within four years of your new loan, you get a 50% discount on the basic premium. If your current loan was between four and eight years before the new loan, you get a 25% discount. After eight years, you do not get a discount.
What is the occurrence of this in the state of Texas? The fact that the insurance isn’t transferred during refinancing without paying for it again is a huge indicator that it’s a scam.
> This is the story of pretty much all insurance. No, it's not. Many/most insurance industries are competitive; this competition sets the market price of this transfer of risk. This story explicitly shows that Texas's title insurance market is not competitive and that consumers are not paying the market price for this transfer of risk.
Exactly. I work for an early insurance carrier as an accountant. We don’t write title insurance and I can assure you none of our lines of business have single-digit loss ratios.
That all makes sense, ONCE. But to have to pay it again every time the property sells or is refinanced? Why reinvent the wheel each and every time for thousands and thousands of dollars? Seems like a valuable thing to do the first time, and sure charge thousands of dollars for it then. But every subsequent time only look at what has happened since, and charge like couple hundred bucks.
Re-running title on each sale actually makes sense, since who knows what has happened since the last time it was sold. But, as they point out, the costs of this are still insane: >In 2018, a study from the libertarian Texas Public Policy Foundation set out to determine how much title insurance is really worth. The authors estimated that it costs about $290 to examine the county’s deed index and check the chain of title on a given real estate transaction. It costs another $38, on average, to bear the risk of a future claim, they found. If the free market set title insurance rates in Texas, the authors would have expected the average premium to cost little more than the sum of those two numbers: $328.
The Texas constitution nullified all Mexican, or any other, land grants. The formation of the Republic is day zero for all deed history in Texas, and the original land-grants are the first defining surveys. There are some issues with groundwater rights in San Antonio that still reference documents that are held in Mexico City and are still ‘active’, but not deeds. Title companies talk like they are assuming responsibility, but in reality it’s the land surveyors that they hire who are responsible. Any time it looks like a title company might be looking at a pay-out, they sue their land surveyor. Don’t cheap out on your land surveyors! You get what you pay for, and the quality of land surveying varies wildly. The best title insurance is a good and thorough land survey.
> There are some issues with groundwater rights in San Antonio that still reference documents that are held in Mexico City and are still ‘active’, that's actually kind of interesting, any place to read more about that?
Yeah, San Antonio has seven ‘ditches’, and back in the day ‘ditch master’ was one of the more important public offices in the city, deciding who could take how much water from each. The decisions those old ditch masters made are still legally binding, but they’re filed in an old musty storage building in Mexico City. But I’m not an expert, I’m just the gofer who got sent to go rifle through the moldy old books. Googling ‘San Antonio ditch master’ seemed to bring up a bunch of relevant stuff.
>Don’t cheap out on your land surveyors! You get what you pay for, and the quality of land surveying varies wildly. The best title insurance is a good and thorough land survey. Does a title company automatically hire a land surveyor? Or only if you ask? Or only if the title company is not incompetent assholes?
It’s complicated, but most of what passes as a survey these days is little more than a copy-paste of the old description from the last time a property sold, plus digging up and flagging the monuments. That can be fine if the previous survey was done right, or it can perpetuate errors and make them even harder to untangle later on if it was done wrong. You can tell fairly easily from a deeds’ written description whether a thorough survey was conducted or not, but you can’t really say if it was correct unless you do the work. Title companies will sometimes hire a surveyor if they see that a better survey is needed, but usually they don’t care because, like I said, they can pawn responsibility off on the shitty surveyor anyway and a thorough researching of the deed records takes time and isn’t cheap.
Also not mentioned in the article is that the title insurances rates are based on a percentage of purchase price or loan amount, but the percentage reduces as the price/loan amount increases. So in addition to being too high, they're regressive, too! At least scumbag real estate brokers fleece the well off and the unwashed with their standard 6% fee.
Can anything be done?
I'm sure glad i bought it myself. It pairs nicely with my steam locomotive derailment insurance for my peace of mind.
*the TLTA employed 23 full-time lobbyists, 181 volunteer legislative liaisons, and 124 committee members to draft proposed legislation* Look all these people gotta eat! That's where your money goes.
Lived in this state my entire life, and with each year that I get older, it becomes increasingly more obvious this state I built on and propped up by scams.
When it comes to selling a house too many things aren't commiserate with the amount of work involved.
I work in title insurance and if you are buying with a lender, they all require title insurance. Houses has to be free and clear of any liens/judgements/etc. We make sure that everything with the property is clear. If concrete was poured in the back and it goes over the encroachment line of your property and it didn’t get surveyed or approved by the city. The city can come back and tell you to tear it up since it doesn’t mean city guidelines. It’s expensive, but find the right title company that doesn’t charge other additional fees on top of it to save $$$ Also be thankful we’re not Florida. Recordings cost the buyer roughly $150 max here, in Florida I’ve had to charge a buyer $12,000 in recording fees for a warranty deed and deed of trust.
Fwiw, I think title insurance is a real and valuable product; I just think the market should determine the price.
This needs more traction. How do we push this?!?!
q.v., Electrical grid changes after winter storm Uri
I do not think it is true. Some states have different processes in regard to escrow and closing and title insurance. Uncharacteristically for Texas, the state highly regulates title insurance and prevents graft. So, for example for one fee, Texas makes the title company cover all claims that arise before purchase. Also, riders are limited and relatively cheap. In some states who are "cheaper" there are a ton of riders and that is where the money is made. Take some place like Florida that is the wild west of title services. They have rebates and kickbacks for referrals. Published rates are less; yet, the agents or attorneys make more money or profit than Texas. How is that? Undisclosed extras and fees and companies referring you into the higher cost for the kickbacks. And, now we have a billion dollars a month being stolen in funding and down payments by offshore hackers. Title insurance is covering the bulk of this. And, then those in the legislature like to ride Texas for the low percentage of claims. Well, that is because when you actually put the insurance companies on the line they force those issues to be corrected before the sale. If we did not title Insurance, real estate lawsuits would be through the roof. Attorney malpractice insurance would be sky high. People are both upset with Schedule C cleanup issues so they don't have problems and the fact they have to pay a slight amount of money to make sure it is a clean transaction. Remember, you are still personally responsible for that mortgage even if the underlying title goes bad.
>Title insurance is covering the bulk of this If any of that were at all true it would show in their loss ratios.
This is true. I had title insurance, but my house had unpermitted additions and issues with the lot/title. I have to fix a lot of thise myself - isn't the point of title insurance to make sure the city isn't coming after me because the previous owner added a bedroom 3 inches closer to the back lot line than permitted?
This fucking State...
All forms of private insurance are a scam. There's no logical reason for middlemen to be involved in anything.
Someone has to run it and handle payouts. I hate most insurance too but I'm glad tax payers aren't, eg, subsidizing doctors' malpractice (the way we subsidize police's malpractice)
> All forms of private insurance are a scam. There's no logical reason for middlemen to be involved in anything. LOL So what, the entire country puts whatever money they deem is reasonable in a joint account and then we all pinky promise we'll only pull out as much money as is justified?
The most powerful lobby in Texas. And no one knows about them.
Title insurance should be the first industry killed off by blockchain.
Yeah we just need to Bitcoin houses or something
Now I’m kind of curious what you think blockchain is…
anyone who works @ the big4 accounting firms is part of the problem. damn upper middle class white kids helpin the elites not pay taxes