We sold our house this summer and bought a new home. The experience has led me to reflect on homes and home-buying in America. As in any industry, there are good and bad incentives at work in real estate. A home seller would like to get the highest price for their house and sell it in a reasonable period of time. The industry operates on a commission system so that the agent seeks to sell the house at a higher price. This incentive works, but only to a point. Consider the impact of $5000 on the seller vs. the agent. Six percent of $5000 is $300. After the realty company and purchasing agent take their cut, the agent isn't left with much. A $5000 difference in the price of the house means little to the agent, but a lot to the home owner. Does an agent become successful by getting the highest price or by turning over lots of houses? The answer is obvious. An agent's ideal world is not one where people get exactly the right price for their homes, it is a world where everyone is wi
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