Most outrageous consumer price quotes

[jacob]

From an ad hawking insurance to "protect" the "consumer" from unanticipated costs for hiring an electrician, plumber, ... Among its "convincing" points, it mentioned some "typical" costs such as replacing a GFIC outlet: $294!

Such an outlet costs about $12-15 at home depot and it takes about 10 minutes to replace.

Guestimating the numbers:

ERE:
Parts: $15
Permit: None required for home owner
Work: Takes 10 minutes

Consumer:
3x retail for parts: $45
Electric work permit: $100
First initiated hour: $120

Overpaying by 2000% must be a record?!? Can anyone beat that?

[workathome]

We had some cheap ass transparent hose coming from the water softener start leaking into the basement. You have to crawl into the drop ceiling to get at it though.

Consumer:
$100-$200

ERE:
$2

[FRx]

Patient comes in with knee pain, I tell him that it's likely a torn meniscus and it will heal with good physical therapy that he can do without a physical therapist. I print some out for him, I refer him to some great medical websites and tell him to youtube it. Patient decides I'm a whack doc, files complaint about being told to youtube something. Then goes sees private orthopedist, scheduled for surgery, extensive surgery completed, pain resolved. Cost to him was "only" $2,500 for his deductible. Or he could have done the exercises I recommended.

[workathome]

I notice our society always has a need to "do something" even if it's possibly harmful. If it's expensive and involves a lot of inconclusive tests, that's okay. To not do something is anathema.

[bradley]

$120/hr for a personal trainer to tell you to run 2 miles (on a conveyor belt), do 50 push-ups, some squats, lift some weights, count your calories.

Versus... free online reading, YouTube videos, running on real terrain outside your house, using your body as a weight, and borrowing The Warrior Diet from your public library.

[stand@desk]

Liquor in my home Country (Canada). There is a new 750ml bottle of vodka that is shaped in a hockey stick. Price? $100 plus $13 in taxes for $113 total purchase. Also, you can buy a "stand" to showcase the hockey stick vodka for $22 plus taxes. http://highstickvodka.com/



A 1000ml bottle of Vodka sold for one hour away at the duty free store $11, no additional taxes. A one litre bottle of vodka in the USA? probably a few dollars less.

The hockey stick vodka has sold very well in our market.

[susswein]

I think the biggest consumer ripoff is real estate agents. Each (listing and selling) office makes 3%, or 6% total. This is $30K on a $500K property, or more than the downpayment amount on an FHA loan! Calling the listing agent yourself and telling him that you'll deal without a buyer's broker if he rebates half the buyer's commission to you will save you a quarter of this.

Time invested: 10 minutes
cost: 0
savings: $7500

I've had plenty of agents hem and haw, but only one ever refused outright. I called the seller personally, explained that her agent was costing her a sale by being a greedy pig, and 30 minutes later the selling agent called me back offering to to rebate the full 3% buyer's agent commission.

[billc]

RE: real estate agents.

TL;DR = While the pricing model is out dated and the industry as a whole should change, the fee the average agent gets on an average house is reasonable given their cost structure and expected sales volume. The cost structure is influenced by the establishment and the Realtor lobby, but there's nothing that Average Joe Realtor can do about that. (and many homes sold now are at 4.5% or 5% commission, not 6%).

Long explanation:

An agent who refuses to comply with the rebate demand is not necessarily a greedy pig (they might be, but not necessarily). You don't know their full situation - they don't necessarily have the authority to make that call, depending on their brokerage. Also, most agents are incentivized to sell quickly (which is not necessarily a good thing for their clients, granted) - if they had a shot at getting their 3% commission - nearly all will take it. I don't think you can immediately assume they were banking on you caving on rebate demand and them collecting the whole commission. However, they do have a fiduciary responsibility to their clients - so if I were in the agent's shoes I certainly would have presented all offers to them.

You're correct that the pricing model doesn't make sense and it could be much better. However I think it's important to recognize that working as a real estate agent isn't "easy money" (except perhaps from 2002-2005, but even then you had to live through 2007-2010).

Some things to consider:

1. Most buyers/sellers are uneducated about anything related to conducting a real property transaction. The role of the agent is important for most people. Remember most people are not like the individuals who frequent this board.

2. There is plenty of choice out there for consumers who don't want to work with a traditional agent. FSBO, MLS listing firms, RedFin - etc.

3. A new agent (with a sales person license) who works with a large brokerage brand (Keller Williams, Coldwell Banker, Long & Foster, etc) will generally start at a 50%-50% split with their broker. And many homes now use a 5% fee (down from 6% in the past). So it's 2.5% to each the listing and selling broker. Then that's split 50/50 = so it's 1.25%. On a $300k house - that's $4500.

Agents who manage to do enough deals to make a full time living at it will work their way up to a 70/30 split. The very most productive agents will generally get to 95/5 with a monthly desk fee (usually about $1000/mo). In most states after working 3-5 years full time as an agent a sales person can get a broker's license and open their own firm so they no longer need to split the commission, but it's very difficult to get the volume of business one would need to do this. Most agents stick with an established brokerage brand.

4. There are costs to be an agent. Many of these are deductible, but they are costs nonetheless

• Realtor dues: $650-$1000/year (you don't have to be a realtor to have real estate license, but the MLS is controlled by the realtors, so you have little choice but to pay or pay higher mls dues of equivalent cost)
• MLS Subscription: $500/year
• Lock Box Subscription: $250/year
• Continuing Education: $100/year
• Licensing Fees: $65/year
• Errors and Omissions Insurance: $400/year
• Health Insurance >$5000/year (you're a 1099 contractor, so it's not subsidized by anyone)
• Self Employment tax: 15.3% (or 7.65% more than FICA in typical job). However this can be deducted against income.
• All expenses related to advertising and promoting self (brand) and listings. (Amount obviously varies)

5. Let's assume a $300k sales price and the agent is a few years into their career and they have a 70/30 split with their broker. They would gross $5,250 on this sale. After accounting for advertising costs and costs above + phone, etc - you'd probably have to close >20 transactions per year to make the equivalent of approx $100k salary job. Obviously $100k is a damn fine salary, but there is no year to year security in it either. And most people don't spend efficiently, so a 100k salary to the average american is different than the 100k salary to people who are efficient with their money. 20+ transactions/year may not sound like a lot - but it's actually quite difficult to get to that level.

[dot_com_vet]

Kirby vacs are pretty bad. (But not as bad as home maintenance plans.)

[Stahlmann]

https://www.youtube.com/watch?v=7R5A0pg4oN8

[Laura Ingalls]

From an ad hawking insurance to "protect" the "consumer" from unanticipated costs for hiring an electrician, plumber, ... Among its "convincing" points, it mentioned some "typical" costs such as replacing a GFIC outlet: $294!

Such an outlet costs about $12-15 at home depot and it takes about 10 minutes to replace.

Guestimating the numbers:

ERE:
Parts: $15
Permit: None required for home owner
Work: Takes 10 minutes

Consumer:
3x retail for parts: $45
Electric work permit: $100
First initiated hour: $120

Overpaying by 2000% must be a record?!? Can anyone beat that?

I defense of someone that paid to have GFI’s replaced. Intellectually knowing how to replace is not the same as being able to. I straight up did not have the hand strength to get the wires back in the box. I got the old one off and the new one wired just fine. Since I was in a time crunch and had 7 replace plusit was not the house or the community I lived in I just hired someone.

[basuragomi]

$16,000 quoted for a cracked plastic fitting, fixed with a $4 part (and $100 of tools, and $596 of expertise).

[plow_2]

Had some furnace trouble last year that I didn't have time to do myself. They gave me a quote and in the quote was a line for replacing the furnace filter for $70
cost of item $2 ish
Time to replace 2 minutes. I replace mine monthly so I turned it down.

Needed oil change in car last summer, again was too busy at the time so Took to dealer. They told my wife it needed new windshield wipers. $125. It didn't need them so cost of item at that time 0 dollars. Replaced last month for $36

[rube]

Last month the car dealer quoted 400 euro to replace the car battery. I used the code on their quotation to find the exact same battery for 138 euro including delivery. Took me about 20 minutes, including watching the how-to YouTube video, to replace it.

[aptruncata]

Just finished replacing my 1929 clay sewer main to ABS due to root intrusion.
Rooting request in Southern CA on a thursday night 8:30pm February 2022, $850.00- $900.00. (yelp and angie's list recommended plumbers)
Next day plumber shows up and unplugs the main with a snake for $150 in 10 mins but only guarantees the work for 2 weeks. Recommends $600 hydro jet to trim the roots, $2,500/ root intruded joint re-hab with rubber coupling x 6 joints = $15,000 or if during the process the pipe collapses and needs complete overhaul= $20,000+ my liver.

ERE: pack of ice $2.99, water and gatorade $15.00, 3- 10ft abs pipes, joints and glue $200.00.
Already in the garage are:
Shovel
pickaxe
leather gloves
tape measure
saw
level
sawzall

3.5' deep x 2' wide x 25' long. dig= 20 hours by myself (plenty of rocks in the mix)
cut off and removal of old= 30 mins
install of new joints, leveling and prep= 2 hours
covering trench= 5 hours.