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| The Realty Reality of Freakonomics |
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Freakonomics is a New York Times Bestseller that looks at economics from a different perspective and tackles meaningful life questions like “What do School Teachers and Sumo Wrestlers Have in Common?” “Why Do Drug Dealers Still Live with Their Moms?” and “How is the Ku Klux Klan Like a Group of Real-Estate Agents?” To learn the full answer to the similarity of Sumo Wrestlers and School Teachers, you will have to read the book. Sneak peak…they both cheat. While I don’t intend to do a full book review here, reading the chapter on the KKK and real estate agents was provocative. Although I wasn’t personally offended, the assertions of the author seemed equally justifiable, inadequate, logical, and unfounded. The author puts forth, in many more words, that real estate agents leverage fear to promote their own well-being disregarding their clients’ interest. The author states, “So a big part of a real-estate agent’s job, it would seem, is to persuade the homeowner to sell for less than he would like while at the same time letting potential buyers know that a house can be bought for less than its listing price.” The inaccuracy of the author’s view is that an agent’s job is to actually help the owner establish a fair and marketable price. If the owner feels or thinks their home is worth more, then it is the agent’s job to help them have a reality check. A person’s feelings or thinking about a value matter much less than the reality of the value in the marketplace. The reality is that most home-owners feel like their home is worth more than everyone else because they think that their decorating or style is better than everyone else. One might call this the pride of ownership. The reality of realty is that a home is only worth what a person is willing to pay.
Do agents actually tell buyers a home can go for a lot less than listed? It shouldn’t come as a surprise that some people only care about themselves regardless of an oath or even a code of ethics. There are corrupt politicians, cops, school teachers, and yes real estate agents. I’m probably the last person on earth to defend a group of people, especially real estate agents. However, not all real estate agents are bad. Just like not all cops, school teachers and politicians are bad. Some real estate agents actually care about their clients making the most money or paying the least. The ones who really care are the ones who do really well—usually. That’s not to say that all the top agents really care. Some of the most cynical and rude agents are the ones you might see in a popular magazine. The author also asserts unreasonably that there are code words real estate agents use to communicate. While this is fanciful suggestion, real estate agents are far too simple to have a secret code. The correlation, though, found between certain words in a property description and the sales price shows something much more meaningful than a secret code. The use, or over-use, of superlatives and ambiguous terminology is typically an attempt to create a more attractive picture of a generally unattractive property. The uses of descriptive details of a home provide a much more accurate portrait of a home, which is more attractive that layer upon layer of vague terminology. So what does that mean for you? Here’s my advice: If you are ever considering working with an agent to either buy or sell, sit down and eat a meal with them, talk with them, get to know them. Find out what kind of person they are. If they seem like a selfish person in their personal life, then they will likely be selfish in their professional life. See if they are a person who is really trying to help you or find out if they are just out to serve themselves. Are they really interested in you? Do they really care when you speak? Here’s a tip—a person who cares what you are saying and how you are saying it is much more likely to really care about your best interest. |
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