The Dollars Don't Make Sense

You got an offer! However, the buyer wants to get the best deal possible and assumes you might be overpriced, so they come in $20,000 below listing price. Ouch!

Then your agent does what they're trained to do, "Look at the bright side, we got an offer. They're interested. What would you like to counter?"

The gut-punching negotiations go back and forth until you meet in the middle. You've conceded $10,000 to the buyer to make the deal. Everyone just had to give a little...but did they really?

Agent commissions are still typically paid by the seller, half to the buyer side and half to the seller side. These commissions are then split between the agent and their brokerage, leaving only a small percentage to the agent negotiating on your behalf. After the commissions are shared with all the broker and agent middlemen, your agent is only out a few hundred bucks.

If you were an agent, would you be interested in risking a deal falling through for an extra couple hundred dollars or would you prefer to close the deal, get paid, and move on to the next deal?

Real estate agents aren't bad people, they're just stuck in an outdated and costly broker-agent compensation structure that doesn't properly incentivize the agent to negotiate on your behalf.

Don't just take our word for it. Check out this great breakdown from Economists Steven Levitt and Stephan Dubner.