Freakonomics: Trouble brewing for Realtors
There’s a potential crisis looming for Realtors, thanks to a study published in the best-selling book, Freakonomics.
Authors Steve D. Letitt and Stephen J. Dubner claim that Realtors don’t have their clients’ best interests at heart. They say that it isn’t worth a Realtor’s time to advise their clients to hold out for an extra $10,000 because the Realtor stands to make about $150. They’d rather push their clients to make the deal. Once consumers hear that, I’d wonder if any house seller would trust their Realtor’s advice.
Not only that, but the authors’ statistics show that when Relators sell their houses, they get a higher sales price than their clients do!
If this book were some dry economics tome, I doubt the Realtors would have anything to worry about as few people would read it. But Freakonomics is near the top of all the major best-seller lsts. In fact, one of my clients told me about the book and told me about three case studies from the book — nearly word for word from the book. In other words, this book is very repeatable in daily conversation.
If I were on the planning board of the national or local Realtor associations, I’d be scurrying to find the answer to the questions that you know your local business reporters are going to ask you.
Dan Janal
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Anyone who’s worked with a realtor– even a good one — knows this is the truth. Realtors are salespeople, driven by commission but paying close attention to customer service. But anyone who thinks their realtor has their (the buyer’s) interest over their own wallet is absolutely mistaken. But I don’t think this is wrong or masked in any way. It’s just sales, plain and simple. Anyone who doesn’t understand that doesn’t understand a market economy.
I’m a Realtor – presently transitioning into speaking & writing – but I have actually knowingly “lost” deals by giving clients advice that was in their best interest. Like, don’t buy X property, put your money in with your Dad’s purchase of Y property (with another agent). The thing is, long-term, this sort of advice has earned me (a) lifelong client loyalty and (b) more deals via referrals.
With that said, I KNOW that I am the anomaly in this industry, and have even had other Realtors comment disparagingly about my practice of fulfilling my duty to place my clients’ interests ahead of mine.