Quote:
Originally Posted by retiredguy123
I think it is important to understand that real estate agents work for the seller. When a potential buyer refers to an agent as "our realtor" it is not accurate. Buyers should be wary of seeking advice from real estate agents because they are always going to put a positive spin on the housing market, especially during a difficult time such as this. They are being paid by the seller, not the buyer.
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Nah, real estate agents work for themselves, for their commission. Being paid by seller is true, but if the difference in commission for the re agent is immaterial to them, they will prefer a quick sale versus the sellers ideal sale, especially if the ideal sale is expected in their mind to take 3-6 months longer.
Freakonomics Chapter 2: How Is the Ku Klux Klan Like a Group of Real-Estate Agents? Summary & Analysis | LitCharts
Summary:
Consider a textbook example of information asymmetry: selling a house. When a person sells a house, there are two major dangers: 1) setting the price too low and 2) setting the price too high. The job of a real estate agent is to find the “golden mean” between 1) and 2). But, as we saw in the Introduction to this book, real estate agents don’t always have their client’s best interests in mind: indeed, their monopoly on information about the real estate market may encourage them to sell a house for too cheap.
As we saw in the Introduction, a real estate agent’s incentives don’t always line up with those of the client. Given what we’ve learned about how experts use fear and ignorance to pressure people into changing their behavior, we can start to understand how real estate agents might convince their clients to sell their houses for a lower price than they’d like.
The authors of the book recall a close friend, “K.” K. wanted to buy a house for 450,000 dollars. K. phoned the seller’s agent and asked the agent to name the lowest price the homeowner might accept. The agent scolded K. for asking such an unethical question. But then, the agent said, “My client is willing to sell this house for a lot less than you might think.” After the conversation, K. offered 425,000 dollars for the house. So because of his own real estate agent’s actions, the seller of the house lost 20,000 dollars. Meanwhile, the agent himself lost only 300 dollars (his “cut” of the commission on the house).
Worked with too many sales people with too many incentive plans to modify sales rep behavior to believe that sales agents work for a company or a person. I have seen more than one sales rep hold their big deal as hostage for better commission rates, and other questionable behaviors, such as using the approach, "Danny, if you believe it, its not a lie!"
great theory, not in practice.
sportsguy's experience