I just re-read the critiques that Steven Levitt and Stephen Dubner make about real estate agents and I think they need to be qualified. Levitt and Dubner's point is that real estate agents only gain a marginal benefit by negotiating a higher price for a seller so agents just try to close a deal quickly and leave money on the table for sellers. To prove this fact the authors reference a study "that found an agent keeps her own house on the market an average ten extra days, waiting for a better offer, and sells it for over 3 percent more than your house."
1) Refuting myth No. 1 - Keeping a house on a market longer leads to a higher price.
Levitt and Dubner wrote their book in 2005 when the housing market had been booming for several years. Perhaps at that time leaving a house on the market longer would have lead to a higher price but now leaving a house on the market usually leads to significant price reductions.
2) Refuting myth No. 2 - Real estate agents are simply looking to close deals quickly so they don't care about getting top-dollar for their seller clients
Everyone has probably met an unscrupulous real estate agent at some point. They don't last long in the business though and they never make much money. Successful real estate agents take a long-term approach to the business. They want to treat every client well because they hope the client will refer them other business and the client will work with them in future years. An agent's reputation is everything to their business and if they shortchange a client it will significantly harm the agent's business in the future. Since Leavitt and Dubner are so interested in economic incentives they should realize that real estate agents have the most economic incentive to treat their clients well.
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