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Bias by real estate agents is incredibly well documented in studies by economists. Economists can study this by looking at how real estate agents behave when selling their own home vs selling for their clients. Here's what they found:
From the book Freakonomics by Levitt and Dubner. And here's a link to the actual research paper.
Claims by real estate agents that, as a whole, they act in the best interest of their clients is simply not true. And this is backed by actual data.
No industry acts "as a whole." None.
Please show me how the opportunists at Freakonomics applied meaningful actual granular data specifically to my services as an agent.
And specifically to:
Eric Boyd's services
Brandon Hoffman's services
Glenn Ross's services
You should show us, or amend your posts significantly, or be openly exposed as being easily manipulated by rumor and innuendo and maybe just a bit silly.
Last edited by MikeJaquish; 08-21-2016 at 06:54 AM..
That book was a laughingstock the day it came out. Such a tiny sampling makes it statistically irrelevant. The real estate market has changed a lot since 2004.
I have sold 3 houses that I have owned. I have sold hundreds, maybe close to a thousand, that I did not. Sometimes the seller's wanted out, NOW. Once I needed out, NOW.
A quick glance at the abstract and the data first mentioned in it, and actual experience in real estate and other agents selling their own houses versus sellers hiring an agent, tells me one thing - real estate agents selling their own houses actually do the things that will make the house sell for the best price.
You bring up a fair point but it's addressed in the paper:
Quote:
All of the empirical findings are consistent with agents distorting information to mislead clients, but are difficult to reconcile with most other plausible theories. If realtor homes are more attractive to buyers on unobservable dimensions (e.g., realtors know better what features the market values or invest more in maintenance of their houses), the higher house price can be explained, but the longer time on the market is puzzling. Likewise, if agents exert less effort in selling their clients’ houses than their own (the typical principal-agent story), agents would sell their houses for higher prices, but should sell their own homes more quickly, contrary to the evidence.
So ultimately the data doesn't support your idea that real estate agents simply show/prepare their house better.
Quote:
Reading further into the study I see that the people conducting the study really have no clue what's involved in selling real estate and are simply out to prove an agenda - not the most scientific of approaches, even in the soft sciences.
Sorry, I'm going with the independent study by U of Chicago professor. If you think his study is not scientific or has some fatal flaw, please point out the specific issue in the methodology and how it materially affects the conclusions.
If you have real evidence (i.e. data and study) showing real estate agents do act in the best interests of their clients please provide it. I'd be very interested in seeing it (this is not my area of work, but I find it interesting). Rationalizations simply don't cut it when we have significant data pointing us to a contrary conclusion.
By as a whole, I mean average. Obviously average behavior may not apply to specific individuals.
Quote:
You should show us, or amend your posts significantly, or be openly exposed as being easily manipulated by rumor and innuendo and maybe just a bit silly.
A research study backed by data from 100k home sales is not rumor or innuedo.
Bias by real estate agents is incredibly well documented in studies by economists. Economists can study this by looking at how real estate agents behave when selling their own home vs selling for their clients. Here's what they found:
From the book Freakonomics by Levitt and Dubner. And here's a link to the actual research paper.
Claims by real estate agents that, as a whole, they act in the best interest of their clients is simply not true. And this is backed by actual data.
I decry the sexism of that study.
I hold an economics degree, spent 10 years holding fiduciary responsibilty near and dear as a banker, and have been putting my clients financial and emotional interests above mine for 18 years as a Realtor.
I also know of "studies", "research", and "facts" that tell us Realtor-listed homes sell for $250K vs FSBO homes selling for $175K .... but I and any professional would never tell someone that simply listing with a Realtor gets you the $75K.
first and most importantly, you've linked A SINGLE study, not "numerous" or whatever word you used before (I'll gladly edit if needed). Second, the study is from 2005 but actually klooked at data from 1992-2002, which is a wildly different time in real estate than today.
Quote:
Using a data set of nearly 100,000 home sales, of which roughly 3,300 are agent-owned,
we find that agent-owned homes sell for about 3.7 percent (or roughly $7700 at the median sales
price) more than comparable houses and stay on the market an extra 9.5 days (about 10 percent)
longer, even after controlling for a wide array of house and neighborhood characteristics.
Agent-induced distortions are largest when agents enjoy the greatest informational
advantage, providing further evidence in favor of the theory.
let's break out some simple math ...
in 2005 there were estimated to be 108MM households. in 2005, the rate of home ownership was about 65%, so 70MM households. In 2005, there were about 1MM Realtors.
If Realtors make up 1.4% of households, then why make their share of the study data 3.3%?
Now further, from the study ... the #1 factor cited was an agent's "information advantage". As of 2005 (and again, actually studying some data from the previous 10 years), they stated:
Quote:
Second, the rise of the internet has made it much easier for sellers to directly observe the characteristics of other houses on the market and to find recent transaction prices, reducing the informational advantage or realtors.
By 2005, the perceived or real advantage had dropped to just 2.9% and 2.5 days.
So, take the almost 15 year old data, update and fairly adjust the % of realtor homes to client homes, and then let's chat again.
By as a whole, I mean average. Obviously average behavior may not apply to specific individuals.
A research study backed by data from 100k home sales is not rumor or innuedo.
Oh. So you have chosen Option 3. Sort of.
That is unfortunate and obviously expository of your inability to assess and analyze the "data."
We don't all work in Lake Woebegon.
You purposely mislead the OP with a ridiculous contention, and now admit,"Obviously average behavior may not apply to specific individuals."
That is the entire point.
Levitt made a ton of money with a pop literature book that bore out what he set out to confirm in his sloppy "study," basically peddling unsupported and slanted innuendo and rumor.
In terms of instruction and gravitas, it is a bathroom reader book for any mature mind.
I would propose that the OP, or any consumer, would be very smart to engage a specific agent, rather than "the industry as a whole." If nothing else, engaging a specific agent would greatly reduce paperwork...
You bring up a fair point but it's addressed in the paper:
So ultimately the data doesn't support your idea that real estate agents simply show/prepare their house better.
Sorry, I'm going with the independent study by U of Chicago professor. If you think his study is not scientific or has some fatal flaw, please point out the specific issue in the methodology and how it materially affects the conclusions.
If you have real evidence (i.e. data and study) showing real estate agents do act in the best interests of their clients please provide it. I'd be very interested in seeing it (this is not my area of work, but I find it interesting). Rationalizations simply don't cut it when we have significant data pointing us to a contrary conclusion.
I did already. He very clearly started with a foregone conclusion and worked toward that, which is THE most fatal flaw of ANY study.
I did already. He very clearly started with a foregone conclusion and worked toward that, which is THE most fatal flaw of ANY study.
WELL! Really?
Even if you agree with the foregone conclusion? What fun is that!?
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