[kbutler]

$2M house. 6% commission split 3% to seller's realtor and buyer's realtor. Seller's realtor gets $60K if it sells in 1 month or 1 year, same commission. No sale = $0.

First week gets a 10% low offer of $1,800,000. If sale completes, that's $54,000 income for the realtor (.03*1800000). Or, could hold out for a better offer after for some months of additional work to hopefully get an offer for the full $2M, and the realtor just gets $6,000 more - or $0 if no sale. Seller holding out would get $200,000 more, or if no sale, still has the house.

Realtor's personal interest is to maximize return on invested work - take an early offer and go on to the next sale, even if it is low. Seller's best interest is probably to hold out for a bit better deal.

[philwelch]

I suspect this actually starts to change at the upper end of the market, but only if you have proportional commissions.

There aren't that many $10,000,000 houses. You can't just dump a $10,000,000 house ASAP and list another $10,000,000 house next week. And at $10,000,000, every percentage point in sale price is worth a marginal $3000 to the sellers' agent. If someone comes in 10% below listing on a $10MM house, the difference alone is equivalent to the sellers' agent commission on an entire $1,000,000 house.

[jessaustin]

...after for some months of additional work...

I'm as suspicious of realtors as anybody, but this scenario here includes a real asshole as a seller. If she doesn't want to sell her house, she shouldn't waste everybody's time by putting it on the market. This sort of "just testing the market" shenanigan raises costs for everyone.

[fma]

Statistically, per freaknomics, a realtor selling their own home lists their house 10 days longer so they can get a better offer.

https://www.bankrate.com/finance/real-estate/real-estate-age...

Levitt and Dubner found that, on average, self-listed homes stay on the market an extra 10 days, prompting the authors to hypothesize that agents might be a little more aggressive about their own homes because a 3 percent fluctuation makes a fair difference on the total sale price, but not that much of a difference when it comes to the commission.

[jessaustin]

ITT we're talking about "some months" (three? eight? more than a couple, anyway), not "10 days". The Freaks are just hypothesizing the price rise anyway; markets don't always go up.

Your link identifies the only actual service that realtors provide: objectivity. Houses are worth what buyers will pay for them. The realtor who can predict what price a house will fetch in the near term is providing a service. Permanent realtor's signs indicate failures of objectivity.

[freewilly1040]

In the scenario the seller is gaining $200K by waiting two months. You think she should forgo this money to save everyone else's time looking at her ads?

I personally try and be a polite person, but I'm not $200K polite.