[anm89]

Realtors And especially real estate brokers, have ripped apart our society with cartel like tactics so they can grab a few percent on each bit of the destruction.

I hope the book is thrown at them as harshly as possible.

Claw back those earnings and put it into funds to clean up the mess that has been made

[gigatexal]

I’m a home owner and a landlord (we rent out Condo while we are living in Germany) and I despise all the hustle porn millionaires on social media flaunting their real-estate empires. Speculating and amassing homes to what? To become slumlords doing the absolute minimum only to raise rents to the maximum possible? There’s no evidence that these “investors” spur the creation of new homes if anything they speculate up the price of homes for would be buyers.

I also learned recently that the realtor lobby has fought hard to keep the mortgage interest tax deduction which helps home owning persons but hurts everyone else.

Why am I able to use my single rental as a tax shelter? Because of decades of tax lobbying that has made real estate a fantastic investment. But has it helped the average family looking to get a home? To stop being beholden to the whims of the rental market? Has it spurred on builders to build homes? Have these lobbies lobbied local governments against NIMBY policies? F no. By keeping supply high and benefiting from high interest rates they bank — myself included — on renters without the means to buy a home or come up with the down payment to stay renters for even longer.

And don’t get me started on the BS and corruption in the title industry. Why the f does it cost 1500 to 2000 to do a damn title search? And related to that why the f is the seller paying the buyer’s agent a commission? Wtf did the buyers agent do?

Abolish the mortgage interest tax deduction and scale back all the tax breaks that make real estate so speculation friendly. Get rid of 1031 exchanges. Disallow real estate trusts all these tax haven things must go.

[nulbyte]

> I also learned recently that the realtor lobby has fought hard to keep the mortgage interest tax deduction which helps home owning persons but hurts everyone else.

> Why am I able to use my single rental as a tax shelter?

The tax deduction is only available on your primary and secondary residences. (Where secondary here refers to a second home, not a third, etc.) You don't get to claim a primary or secondary residence mortgage interest deduction on your rental properties, because you aren't living there.

This arose out of a previous law that generally allowed for the deduction if interest on all loans because it was administratively unfeasible to differentiate between business and personal interest expense (or so said the wisdom at the time). Even today, business interest expenses are generally deductible. This is wholly separate from the mortgage interest deduction, which is for owner-occupied homes.

[BenFranklin100]

As an aside, a big reason existing residential homes are often profitable speculative investments is because of bans on new homes. The lack of competition from new home construction drives up the price of older homes.

[ta1243]

US realtors seem crazy -- charging tens of thousands for doing what exactly?

The UK system is pretty bad, but you can choose to spend somewhere between about £1500 and £5000 to sell a £500k home, about about £1-2k to buy one (including conveyancing fees)

The US seems to be an order of magnitude more?

[lxm]

> realtor lobby has fought hard to keep the mortgage interest tax deduction which helps home owning persons but hurts everyone else

What you're saying is correct, but it's worth noting that as of 2017 the number of tax returns claiming mortgage interest deduction went from 20% to 8% https://www.brookings.edu/articles/chipping-away-at-the-mort...

The reason being the increase in standard deduction, and more people opting for that vs going the itemized route. It's unclear how the current (or next) administration feels about the mortgage interest deduction, but it could be the last days of it.

> Get rid of 1031 exchanges

An exchange involves a sale followed by a subsequent purchase. Without the 1031 treatment the seller just might hold forever, which is probably the opposite of what you're trying to achieve.

[bluGill]

I predict that in the next tax reform - in about 25 years - the mortgage deduction will disappear. It could not in the last round a few years back because so many people use it, but the standard deduction is now so high that most states only the filthy rich can use it and so most voters won't care. (sorry bay area residents, but your property values are something the rest of the country laughs at)

[cmrdporcupine]

> fought hard to keep the mortgage interest tax deduction

I think this tax deduction is insane, but it's notable that this kind of deduction on interest doesn't exist in Canada and other western countries, but we have in many cases far far worse housing price inflation than the US. So it's not really the culprit.

It's really very simple. When people are buying a home, they are really buying a loan, not a home. 9/10 home buyers buy the home to fit the maximum loan the bank will approve them for. 15 years of insanely low interest rates means demand for those loans was crazy high, so the price of the thing that backed the loan -- the property -- also skyrocketed. Yes the tax break in the US likely worsens that, but it's certainly not the explanatory factor on its own. A large percentage of home buyers have no ability or intent to ever fully pay out their mortgages (and standard "financial advice" during low interest times was not to bother). So the commodity you're "buying" is not a house, but the loan itself, a long term rental arrangement with a bank.

Now that rates are returning to normal levels, I hope to see that level out or fall. But there are strong lobbying pressures to prevent that. There's a whole generation that sees interest rates lower than 5% as normal/expected. Which is pretty crazy, really.

Capital gains exemption on primary residence probably also plays a role. I personally think that exemption should only apply on a portion of the resale value below a certain threshold. That would help put a downward pressure on price inflation.

But the core problem is that there is the most powerful voting demographic explicitly does not want this. Most baby boomers and much of the middle class are relying on the $$ in their properties to retire, because western countries have on the whole dismantled the concept of pensions and a financially secure retirement.

[FrustratedMonky]

Wasn't the article about Realtors?

You are describing people buying real estate. Rental Property owners, buy real estate to rent.

Realtors are in the transaction of buying/selling real estate.

Different Roles.

[cmrdporcupine]

If you think it's bad in the US, you should see Canada. Every level of gov't and society is corrupted by the real estate industry. Worst housing price to income ratio in the G7.

Feeding on the young.