Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.
- 204
- 2
Jump in the discussion.
No email address required.
Notes -
It's effectively mandatory under the NAR's current rules that the buyer's agent be compensated out of the 6-percent commission that nominally is paid to the seller's agent by the seller. But the NAR has encouraged buyers' agents to misleadingly state to buyers that their services are free.
I guess it's a question of semantics. Their commission comes out of the six percent, but the buyer's agent is selected by the buyer. Clearly the buyer's agent wants to steer the buyer to a more expensive property, but it's arguable who "hires" the agent.
It's not clear at all. The buyer, if they have any sense at all, would already know the state of the market and how much, in broad terms, houses they look for cost. Not precisely, but in certain boundaries. Sure, the agent could show them houses that are a little cheaper and a little more expensive, but the marginal gain would be in hundreds of dollars, while the price of the whole deal is for them in tens of thousands. So the incentive of the agent is to make a deal. It is true that it's not always correct incentive for the buyer (since the agent focused on making a deal first may push for the buyer to compromise on things they wouldn't otherwise compromise) but it much, much better for the agent to get a deal at a slightly lower price than to lose a deal at higher price. So the buyer agent would steer you enthusiastically to any property they think you could potentially buy, but the marginal incentive of showing you only the expensive ones - unless you are so rich the price is obviously not an issue at all for you - would be quite small.
I've been shopping for houses in the US a number of times, both successfully and unsuccessfully, and I didn't notice a lot of drive to only go for top expensive properties. Of course, price is correlated with quality and desirability, so the agent won't show me a half-ruined cheap house while they could show me a pristine new one for slightly more, but I did not notice the overt push that often. There are a lot of agents that understand the above, and if a particular one prefers to lose tens of thousands to gain hundreds, then you get a smarter agent instead.
It'd be hard to fix the incentives completely, since а fixed-price agent would be as interested in getting to the deal as quick as possible. I guess one should get an agent that would be able to keep themselves in check and work for the client.
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link