An Agent will get you a better price - right?


an undoubted or self-evident truth; 

especially : one too obvious for mention

A real estate truism - the traditional agent will get you a better price.

Steven Levitt and Stephen Dubner’s popular non-fiction economics page-turner - Freakonomics and their on-going New York Times columns - challenge many of our traditional assumptions.  Here the authors 'riff' on how simply tracking and understanding incentives can destroy the assumptions we hold as sacrosanct. And the example used - the real estate agent:

The authors base their conclusions on research, Levitt is an economist after all - using a database of 100,000 normalised real estate sales from the Chicago area, USA.

So the incentives used for real estate sales people drive behavior not necessarily to the benefit of the homeowner.

The industry itself questions the way sales people are paid - is the 100% commission structure really the best way? But, has the horse bolted - how do you change the pay structure of the person that really controls what goes on?

Agree, disagree? Crazy, compelling? What is your experience, what do you think?

Definition from Merriam-Webster dictionary

1 Comment on “An Agent will get you a better price - right?”

  • Mike Butcher said:

    We think 200 Square Rocks....! Who better than the owners themselves to sell and take potential buyers through their biggest asset, only they will know all the major features and advantages of a property. From a security point of view also this method / concept of Real Estate Selling is of huge appeal to us. Traditional "Open homes" can often have hoardes of people and children of all ages traipsing through your home - who on earth keeps an eye on all these people - certainly not the agent trying to sell for you....?? Keep up the good work Grant. :)

    Posted 3 rd March, 2012

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