Wednesday, July 28, 2010

The Value of Information in Real Estate Transactions

Market Distortions when Agents are Better Informed: The Value of Information in Real Estate Transactions.

This is an interesting paper from the University of Chicago that seeks to understand the informational advantages that realtors have over home sellers and that they on average sell their own homes for almost 4% more on average, and even more than that when a buyer does not use a buyers agent. Much of the work I do is to help my buyers and sellers understand this informational difference and to help them understand values better. As I read this paper it makes me think about some of my competition and how they run their business and in some cases do exactly what this paper talks about in that the incremental difference in trying to get a higher price for their sellers does not make economic sense for the agent and they talk the seller down in price in some cases below value....yes I've seen it and the values that a few homes have sold for when it's not a forced sale don't fit my valuation matrix. Email me if you want a copy of this whitepaper. Bookmark and Share

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