Is Your Realtor Properly Motivated?
Last week’s New York Times’ article suggesting you dump your real estate agent referred to the best-seller Freakonomics and its conclusion that agents have an incentive to sell your home quick and cheap because a few extra dollars won’t mean squat to them. One way to dissuade brokers and agents from shortchanging sellers, Brooklyn-based Brownstoner suggests, is to overhaul the sales commission:
…create a sliding commission scale (with quite a steep rate slope) based on how close they come to achieving that price. This would encourage brokers not to throw out inflated numbers in hopes of winning a listing–and would align their interests better with the seller.
Don’t miss the discussion that follows and see how the industry standard 6% magically transforms into 7% before your very eyes. Looks as if brokers are sliding the sales commission already, B’Stoner.
Brokers’ Misalignment of Interest [Brownstoner]