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Reminds me of the piece that Freakonomics did on real estate agents. It's probably worth the read for anyone about to buy/sell a home.
by jlgaddis 10y ago
Reminds me of the piece that Freakonomics did on real estate agents. It's probably worth the read for anyone about to buy/sell a home.
- SturgeonsLaw 10y agoThe TLDR on this piece is that since commission is a fraction of sale price, the primary incentive for agents is to just get a sale, and fast, rather than maximise sale price, as even tens of thousands extra adds only a little to their cut, so their time is better spent pushing the property through the sales pipeline and moving on to the next one as quickly as possible. There's a study which draws similar conclusions: > Our central finding is that, when listings are not tied to brokerage services, a seller's use of a broker reduces the selling price of the typical home by 5.9 to 7.7 percent, which indicates that agency costs exceed the advantages of brokers' knowledge and expertise by a wide margin. https://www.nber.org/papers/w13796 https://www.nber.org/papers/w13796