[xofer]

There's also a misalignment on the sell side. Since the seller's agent gets paid a percentage of the sale price you'd think they're incentivized to sell at the highest price possible. But they don't make any money at all until the sale actually goes through. They'd much prefer to sell 2 houses at $125,000 than 1 house at $175,000 for roughly the same amount of time and work. Since cost is the only knob they control of the three affecting the time/effort it takes to sell a house (the others being condition and location), they are going to turn it as low as possible.

[matt-attack]

Agree. A listing agent would much rather that the house sells for 2M than try to eke another 100k out of it and risk the house sitting on the market for months. The 3% of the incremental amount is just not enough to matter. They’re incentivized only by getting the deal done. Full stop.