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The buyer's agent's incentive is the same as the seller's, which is to turn houses as fast as possible. That's a huge misalignment on the buy side. If the buyer

The buyer's agent's incentive is the same as the seller's, which is to turn houses as fast as possible. That's a huge misalignment on the buy side. If the buyer dislikes the house enough to move after several months, that increased liquidity benefits agents. I wish the buy side agents' compensation were more like a vesting schedule, that would incentivize them more along the lines of getting buyers into long-term residence.

calmworm 3y ago
I can see this point of view for a developer/builder, maybe… but that often comes in the form of a warranty or builder guarantees. You talk about increased liquidity as if homes are a commodity, traded quickly and often. This isn’t the case. I can’t even imagine how this scenario you’ve imagined plays out. The real estate agent should not be required to guarantee that their clients home will be “liked” for X months or years. This makes no sense.
- plagiarist 3y ago
  For 3% of the purchase price on inventory of $100k+ they absolutely should be accountable for their client being satisfied with the purchase.
  - calmworm 3y ago
    These are specific lines you’ve drawn. Maybe you can provide a scenario in which this is accountability is required… A good agent will spend the entire 30-45 day process ensuring their client is getting what they want and what they are paying for. A good agent does not want a buyer to end up in a house that is bad for them in any way. And even then that’s only counting the days between the acceptance of an offer to closing day. Oftentimes an agent will spend months or even a year or more with clients.
    - plagiarist 3y ago
      It is strange that you claim you cannot imagine how selling a primary residence sooner than expected increases the number of houses being sold, but you do have the imagination to pretend an agent is working full time for single clients in 30-45 day stretches to ensure they get what they want (despite misaligned incentives to do so). And that they "often" spend a year on this.
      - calmworm 3y ago
        You’re exaggerating my claims and won’t answer for your own.
xofer 3y ago
There's also a misalignment on the sell side. Since the seller's agent gets paid a percentage of the sale price you'd think they're incentivized to sell at the highest price possible. But they don't make any money at all until the sale actually goes through. They'd much prefer to sell 2 houses at $125,000 than 1 house at $175,000 for roughly the same amount of time and work. Since cost is the only knob they control of the three affecting the time/effort it takes to sell a house (the others being condition and location), they are going to turn it as low as possible.
- matt-attack 3y ago
  Agree. A listing agent would much rather that the house sells for 2M than try to eke another 100k out of it and risk the house sitting on the market for months. The 3% of the incremental amount is just not enough to matter. They’re incentivized only by getting the deal done. Full stop.

calmworm 3y ago

I can see this point of view for a developer/builder, maybe… but that often comes in the form of a warranty or builder guarantees. You talk about increased liquidity as if homes are a commodity, traded quickly and often. This isn’t the case. I can’t even imagine how this scenario you’ve imagined plays out. The real estate agent should not be required to guarantee that their clients home will be “liked” for X months or years. This makes no sense.

plagiarist 3y ago
For 3% of the purchase price on inventory of $100k+ they absolutely should be accountable for their client being satisfied with the purchase.
- calmworm 3y ago
  These are specific lines you’ve drawn. Maybe you can provide a scenario in which this is accountability is required… A good agent will spend the entire 30-45 day process ensuring their client is getting what they want and what they are paying for. A good agent does not want a buyer to end up in a house that is bad for them in any way. And even then that’s only counting the days between the acceptance of an offer to closing day. Oftentimes an agent will spend months or even a year or more with clients.
  - plagiarist 3y ago
    It is strange that you claim you cannot imagine how selling a primary residence sooner than expected increases the number of houses being sold, but you do have the imagination to pretend an agent is working full time for single clients in 30-45 day stretches to ensure they get what they want (despite misaligned incentives to do so). And that they "often" spend a year on this.
    - calmworm 3y ago
      You’re exaggerating my claims and won’t answer for your own.

xofer 3y ago

There's also a misalignment on the sell side. Since the seller's agent gets paid a percentage of the sale price you'd think they're incentivized to sell at the highest price possible. But they don't make any money at all until the sale actually goes through. They'd much prefer to sell 2 houses at $125,000 than 1 house at $175,000 for roughly the same amount of time and work. Since cost is the only knob they control of the three affecting the time/effort it takes to sell a house (the others being condition and location), they are going to turn it as low as possible.

matt-attack 3y ago
Agree. A listing agent would much rather that the house sells for 2M than try to eke another 100k out of it and risk the house sitting on the market for months. The 3% of the incremental amount is just not enough to matter. They’re incentivized only by getting the deal done. Full stop.