Friday, May 20, 2005

Buying a House


The Washington Post today addresses some efforts by traditional real estate companies to impede competition from their electronic competitors. But I think they're missing the forest for the trees. We make the buying and selling of real estate excessively complicated, with a flurry of required documents, deeds, and associated title searches. Yet there is no reason why a real estate deed, and its transfer, needs to be significantly more complicated than that for an automobile. The success of the real estate industry in preventing a more efficient system for titling and transferring real estate significantly raises the cost of every home transaction. Yes, Internet competition can help lower those costs, but perhaps it is also time to explore modern alternatives to the archaic system of land title used in every state but Iowa.

5 comments:

  1. I was waiting for the reference to Iowa, and there it was, in the very last word of your posting.

    Have you ever seen those huge national realty catalogs, e.g., United Farm and Strout? They have sections, arranged geographically, with listings of farms and properties for sale, in, uh, 49 states. Iowa is simply missing. You don't need a realtor to buy or sell property in Iowa.

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  2. Today I was on the phone with a guy from JPMorgan Chase & Co., about refinancing my mortgage. He told me the impressive sum that a title company would charge in association with a "title search" associated with the refinancing. About $1,500 per hour, if they're as efficient as I am.

    I commented that it's a shame I don't live in Iowa. He replied, "Tell me about it."

    None of this is a secret to those in the real estate business.

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  3. How do things work in Iowa?

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  4. They use the Torrens system, which is a bit antiquated in and of itself, but which makes the transfer of real property much more akin to buying and selling any other piece of titled property (e.g., a boat or a car).

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  5. Okay, not *quite* worth moving to Iowa. Probably.

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