The Broker/Agent System: A Disincentive to Negotiate

Receiving an offer below your asking price can be disappointing, but it's a common occurrence. Your agent may encourage you to counteroffer, but is this really in your best interest?

Consider the agent's commission structure. Sellers typically pay a commission split between the buyer's and seller's agents. This commission is further divided between the agents and their brokerages, leaving agents with a relatively small portion.

Given this financial arrangement, it's understandable why agents may prioritize closing deals over negotiating for higher prices. A few hundred dollars in additional commission may not be worth the risk of losing a deal.

The outdated broker/agent system fails to incentivize agents to aggressively negotiate on behalf of sellers. To learn more about this issue, check out the insightful analysis by economists Steven Levitt and Stephan Dubner.

By choosing a different approach, such as DIY Home Sale, you can avoid these hidden costs and potentially save thousands of dollars.