Wednesday, December 5, 2007

Lessons in dumping land

Land bots are not a bad thing, people, on the other hand, are dishonest and corrupt and Second Life's economy is filled with perverse incentives that heavily reward people who hold back progress. While Libertarianism is as close to a state religion as Second Life gets, it is, like all libertarians everywhere, actually anti-capital and pro-rent. People naturally gravitate towards religions that reward being first rather than smart, because, as SA is wont to point out "you can only think you are smarter than everyone else, but you can know if you are first." To which I can only add that some judicious pruning of people who were there before you helps a great deal too.

As I said, land bots are not bad, because they set the liquid price of land. That is the minimum that a parcel will go for. If you hold land, then land bots are the means by which liquidity is kept in the land market, a series of parcels are there to buy, and you can sell out in hours. This is a good thing. However, this is where the corrupt nature of people comes in. In market economics all information has to be distributed immediately through price. This is in the rules, and while I am not that smart, I can read my textbooks and regurgitate on command. Really, I'm good at this. I speak Standard Written English as my native, when I am not staring at my shoes in embarrassment. Then I speak mumble. In SL I speak with a heavy Typonese accent, as do many people.

Anyway, in SL this not the case with the land market. It would be far better if all land were sold at auction, rather than this strange guess based system, but that is the way it is.

What will happen if you put a parcel for sale at above dump price is that people will try and get you to sell below it. That is they are asking whether you want to donate to the cause of land griefing, or "are you a brain dead newbie to be reaped?" This is destructive to market forces, because they are, in essence, committing fraud, hoping you won't know.

Don't fall for it.

Never sell for what an ad sign says to sell for. Ever, it is always below dump price.

Listen to the market, not to the people trying to steal your money.

Often the people lying to you run the landbots. Which makes sense, they know how this works, and are more than willing to steal your money and not teach you the lesson. So here is the lesson that they don't want you to know: don't talk, dump.

So now you know: only trust their lindens. Only trust their lindens. Only trust their lindens. Because if the human is typing something, he or she is only doing it lie to you, that's the only thing that would motivate them to not just buy or not buy: the hope they can cheat you. But you can't cheat an honest avatar. So just be honest, and if you decide to dump (as we did sometime after putting the parcel for sale) don't try and get more than dump price, because no one in the land bot hoard will pay it. They sell prims basically, and they don't have time to evaluate parcels outside ones they know will never ever ever ever sell.

How do you figure the dump price? In SL the dump price is just slightly below the cheapest 512 mature mainland parcel available. Occasionally one land baron will buy a blocker and put it for sale well below this at an unacceptable price, and this will slow down land bots, which, remember are controlled by people who actually decide to buy or sell the land. This price in L/M is the what you should put the parcel for sale for. Parcels larger than 4096 tend not to sell.

Now here is where a bit of actual working capitalism comes into play. Landbots are capital, and maldistributed capital because ordinary users are intentionally blocked from using scripts to search for and buy land. This is, therefore, a government created restriction on free enterprise, and, just like all such restrictions, favors those who benefit from it, namely the ones who have libsl bots. It isn't fair, it isn't smart, and it is anti-capitalist but there are enough land bots out there that competition is starting to work. If a land baron offers below dump price, don't believe them, there are enough others who will buy that they have to pay the dump price. If that land baron does not like you, then some other will buy it.

That's the market, even as blocked by religion and corruption as it is, flowering through the cracks. Competition forces open doors, and prevents even cartels from exercising their power in an unlimited fashion. So now, some information has spread through the SL economy, so pass it on to everyone. So don't hate land bots, because they are actually capital doing its work. That work is both lowering base prices, creating more choices, and a floor for prices. Now that might not feel good when you have to dump, but realize that if you want to maximize profit on land, then you need to hold it and wait for someone who wants to do something that your parcel is good for, often that can be a long time, and tier makes that generally unproductive.

Don't sell below dump price. Land can literally evaporate. SA reports that one parcel sold before the dialog box closed. People will "offer" less than the dump price. No matter how desperate you are, never sell below dump price, because it will take longer to say "yes" and haggle with the fraudster who wants to steal your money, than it will to just set it at dump price and walk away.

This is why I think that land is going to stay around 8L/M. You see LL sells islands. The demand for mainland is mostly driven by speculators and new people. The speculators are paying lots of tier, and in fact holding prices down for everyone else, because if they weren't paying LL all that money to put up rotating for sale signs, then well, LL would raise its prices for the rest of us. Yes the speculators carve out a land tax for what they do, and they will try and rob you but, so long as you know what you are doing you will come out well enough.

SA says that the process you should follow runs like this:

First return all objects. You are going to dump, it might pass through many hands before morning. You have no idea if you will have access to the parcel. Return it all. But next time, give everyone a bit more notice. Sorry. The person who that is intended for knows who he is. Moving right along...

Next if group land, sell it to the owner of the group. Even if it is going to be divided, group payouts come days later. What is the point of dumping if you don't get paid right away?

To sell to yourself, first set user to yourself. First. First. First. Then set the price to 0L and then "keep ownership of the objects." Then buy. SA notes that you may have to play some games if your contribution to the group plus the land is more than your total tier. This because it is on the books twice: once as donated tier, once as the land itself. Just reduce your contribution to the group. This will give a warning, but if you buy it, it won't matter, because the group has a grace period to get the land and land credits back in balance. You will do that by buying the land.

Once this is done, you are ready to dump.

Next check the land search board. Select parcel greater than 512, mature, for sale, mainland. The top property on this will be the dump price. Take the area of that parcel and divide it by the price in Linden. Set your parcel about .1LM below this. That is subtract .1L/M from the dump parcel, and multiply by the size of your parcel.

Then type that price in.

No objects, so it doesn't matter, pick a box.

Then sell.

It might take a while for an odd parcel, but standard ones will evaporate.

You almost certainly won't make money this way, but at least you are getting the market dump price for your land.

The other lesson is the one I knew, but hoped could avoid. Mainland is a race to the bottom, and is barely worth the risk and time. Once you want to do something special, go in with others on an island, especially if you fit in with a user continent.

In our case we sold at around 7.9, which since much of the land was bought during the land collapse, is about what we got it for. (Average of 8.7L/M) Since we are moving to an island, and not paying tier any more, this was our best move, and we will be back with more land and more surprises as soon as we can be.

Thanks everyone, this means a great deal to me, and fortunately the ride isn't over yet.

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