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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]The only thing that will happen if you untie the two fees is that buyers will lose free representation, and sellers will keep 2-3 percent more profit. [/quote]

Sellers could take a lower price because their net would be higher. A lot of deals fall apart because the buyer and seller can't agree to price. Changing the realtor fees to 2% would get them 2-3% closer than the current 4-5% commissions.[/quote]

I don't know why this is not discussed more.  What is more likely to sell a home quickly?  A top notch realtor or a price that is 5% under the market of the realtor-represented ones?

Also that for some reason realtors commission is on the gross and not the net.  That makes no sense, nothing else I can think of is comped that way.[/quote]

This. The lower price is much more likely to sell the home quickly. No seller's realtor can squeeze more money from a buyer. The most they can do is avoid hampering the deal, which unfortunately seems to happen a lot. [/quote]

It is because the seller and buyer agent make more when the price is higher, and of course, the industry as a whole (where commissions are based on percentage of sales price) benefits more with higher overall prices. [/quote]

It has been shown statistically that the opposite is true, and realtors overall make MUCH more with faster sales:

[i]When she sells her own house, an agent holds out for the best offer; when she sells yours, she encourages you to take the first decent offer that comes along. Like a stockbroker churning commissions, she wants to make deals and make them fast. Why not? Her share of a better offer—$150—is too puny an incentive to encourage her to do otherwise.[/i]

https://forum.nachi.org/t/exerpt-from-freakonomics-book-regarding-real-estate-agents/56492

https://freakonomics.com/2008/02/real-estate-agents-revisited/[/quote]

Indeed.

The commission scheme incentivizes frequent sales.

In addition to  Levitt & Syverson, an example :

[quote] For example, if an agent expected that spending 30 extra hours would increase the selling price of a home by about $10,000, the 3 percent listing agent’s commission on that increase ($300), translating to $300/30 = $10/hour, or more likely $7/hour,[13] would hardly seem likely to motivate the agent to invest the time .

[13] Actually, both buyer and seller agents usually share their commissions with their brokers, with the agents typically retaining 70% of the commission. So here, the agent would receive 70% of the $300 = $210 for 30 hours

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3571088
[/quote]

There is zero real monetary incentive ($7/hour) for a seller agent to maximize returns for the seller, nor any incentive for the buyer agent to minimize price for the buyer. 
[/quote]

Not sure where you are listing houses, but I do most of my work in Arlington and there is a large monetary incentive for me to maximize returns to the seller. The sellers happily trumpet around the neighborhood that I got more money for them and that gets more listings and more money for me.  What am I missing about marketing 101?[/quote]

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