Freakonomics: Interesting Stats on Real Estate Agents
I recently had the pleasure of listening to the author of Freakonomics, Steven Levitt, speak at York University. In his book, Freakonomics, has talks about the power of information and those who attempt to keep it from the public in order to exploit it for their own gain. He raises some interesting points about real estate agents.
The author, an economic professor at Chicago University, points out that a sample of 100,000 homes sold in the Chicago area included 3,000 properties that were owned by agents themselves. When the agents sold their own homes, the homes sold for an average of 3% higher, and lasted for 10 days longer on the market .
Why would agents sell their own home for more money and keep their home on the market longer?
The conclusion drawn from these statistics is that real estate agents are not motivated to hold out for the best price for their clients. For example, an agent could sell a clients home for $300,000 and receive their commission. However, the agent would only receive an extra $150 in commission if they sell the property for $310,000. Thus, the motivation is to sell the home for $300,000 and make their commission rather than take the extra 10 days required to receive an offer of $310,000.
To find out more, you can click on the image of the book…
William Stynes
Sales Manager
