Tuesday, August 28, 2007

Is your real estate agent on your side?

The Freakonomics authors explored this and found out no, agents are more interested in rapidly selling a house than maximizing the price. I had observed that at REMAX, which typically gets the best agents because of their cost structure. The agent has a high monthly hump to meet but gets more profit from the sale or listing. REMAX homes sell faster because they want to move those suckers.
"I was just about to buy a house on the Stanford campus, and the seller's agent kept telling me what a good deal I was getting because the market was about to zoom. As soon as I signed the purchase contract, he asked me if I would need an agent to sell my previous Stanford house. I told him that I would probably try to sell without an agent, and he replied, 'John, that might work under normal conditions, but with the market tanking now, you really need the help of a broker.'"
There is an interesting study of what words in real estate ads lead to higher or lower prices.

Positive correlation• granite • state-of-the-art • Corian • maple • gourmet

Negative correlation• fantastic • spacious • ! • charming • great neighborhood

Through my magic decoder ring we see:

This house is fantastic - I can't think of anything to say.
Spacious - at least it is roomy.
! - I really can't think of anything to say so emphasize something.
Charming - take pity on this family.
Great neighborhood - there are better houses in this neighborhood.

The positives are more specific and quality things you can't argue with. Who knows whether a house is fantastic or not, but you can't argue about granite. Corian is high-end granite-like counter tops.

Old link - I like Wired Magazine and Freakonomics.

A recent Wired article: Why You're Not Getting Your Money's Worth Out of That New CPU. Short answer - programmers aren't up to speed on multi-core chips yet but new tools are on the way.

Freakonomics is now a NYT blog - this Playboy editor interview was interesting.
Q: If you have to blame someone for Playboy’s declining circulation rate, whom would you blame?
A: George Bush? Yeah, let’s blame him.

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