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There's also the Principal Agent problem here. If the seller's agent gets the home sold for an extra $50,000, the agent only makes an extra $1500. If this takes

by pradn 3y ago

There's also the Principal Agent problem here. If the seller's agent gets the home sold for an extra $50,000, the agent only makes an extra $1500. If this takes an extra month of work, it may not be worth it. And what guarantee does the agent have that their extra work will actually pay off? Good agents do get referrals, which is a good incentive to do a good job. But are homeowners even able to tell apart a good agent from a bad one? If someone's slick and kind, the bed-side manner might be enough to be considered a great agent. But they might just be less competent compared to a more gruff one.

kangaroozach 3y ago
There is no incentive at the margin. And only the margin matters in real estate transactions. The first 80% is usually a given based on location. Total racket. There should be waterfall hurdles like in Real Estate investing. Or variable commissions above certain thresholds or rolling sqft averages in that location. If they can get that last $50k then split it 50/50 with them. All of their money should be made at the margin. Also there should be full transparency such that the buyer agent loses money when this happens. So there is an overt battle for the pot between buyer and seller agent incentivizing them to advocate for their client, not just get the deal done.