LogFAQs > #979610383

Doe posted...

I took a negotiations class in college and we did real estate one day and the current system has a really blatant flaw, at least in terms of agent incentives. I feel like in the grand scheme of things the buyer agent's pay is not a top 5 issue for housing prices

Freakonomics talk about how on a surface level, its in the best interest for both agents to make the price of the house as high as possible; however, when looking beyond the surface level, that 3% commission, which agents have to give up half or more to their brokers (so each agent only ends up with ~1.5% in their pocket), is so small and it does not incentivize any of the agent to negotiate harder on your behalf (e.g., why spent a week or more negotiating and working harder to earn just $150 more by raising the sale price by $10k, or reduce your own pay by lowering the sale price).