FollowSteph Follow Steph as he posts Blog Blazer Friday

Interesting Statistics About Real Estate Agents

FreakonomicsI’ve been reading another interesting book called Freakonomics over the last week which is filled with lots of facts and great explanations behind them. In my next article I’ll even write about another real estate related metric I found in the book. But for now, heres today’s tidbit:

Real estate agents keep their own properties on the market an average of 10 days longer and sell them for an extra 3+%. To quote the book, on a house of $300,000, that means they sell it for an extra $10,000.

Freakonomics goes into more details as to the cause, and it’s nothing negative against the real estate agent. It’s simply all about incentives, and it makes perfect sense once you understand the facts. So let’s take a quick look.

Looking at that same $300,000 property again, after breaking up the commission, etc., the real estate agent’s average take is $4,500, or about 1.5% of the total purchase price. Now if we take a $310,000 property (adding the $10,000 difference), the real estate agent’s additional 1.5% revenue on $10,000 comes to a total of $150. Therefore the question is, is it worth it for the real estate agent to work an 10 additional days (have more showings, consume a lot of time, take away time from selling other properties, etc.) for $150? I agree with the author, probably not, the incentive just isn’t there. Would you work an additional 10 days for $150? (yes I understand that it’s not 8 hours a day for 10 days, but it still does eat up a lot of time over those 10 days). Now if you change that $150 difference to $10,000, then again I agree with the author, there is substantially more incentive there.

So although the statistics clearly show that the incentives are higher for a real estate agent to sell their own properties, can you blame them? I can’t. Is there a better way to align both your incentives? Probably but I’m not sure how. If you think you do, feel free to comment.

Like this article?


  •     Jim Cronin
    · July 23rd, 2006  · 4:28 am  · Permalink

    I reference an article in Wired Magazine at the Real Estate Tomato – Juicy News For Realtors Online.


  •     Jim Cronin
    · July 23rd, 2006  · 4:33 am  · Permalink

    I apologize for the double post: I meant to say I reference a very similar example Wired Mag.

Write a reply:



LandlordMax Property Management Software

LandlordMax is the EASIEST
Property Management
Software available!
Try it for free!

Real Estate Pigeon

Real Estate Pigeon
The place to ask and answer
all your real estate questions

Blog Blazers: 40 Top Bloggers Share Their Secrets to Creating a High-Profile, High-Traffic, and High-Profit Blog!

Blog Blazers is a book that
features secrets from the
Top 40 Bloggers on the web

How to Generate Traffic to Your Website ebook

How to Generate Traffic to
Your Website
is an ebook for
to you achieve success


More resources from Stephane Grenier:
For people who work on the web
Blog Blazers
How to Generate Traffic to Your Website
The EASIEST Property Management Software available!

Copyright @2003-2024
LandlordMax Property Management Software

Disclaimer: This is a personal blog about my thoughts, experiences and ideas. The contents of this blog are for informational purposes only. No content should be construed as financial, business, personal, or any other type of advice. Commenters, advertisers and linked sites are entirely responsible for their own content and do not represent the views of myself. All decisions involve risks and results are not guaranteed. Always do your own research, due diligence, and consult your own professional advisors before making any decision. This blog (including myself) assumes no liability with regard to results based on use of information from this blog. If this blog contains any errors, misrepresentations, or omissions, please contact me or leave a comment to have the content corrected.