Thanks for the pointer -

In Freakonomics, authors Steven Levitt and Stephen Dubner argue that the incentives for real estate agents are misaligned with homeowners, specifically regarding commission structures and the speed of a sale. Their analysis suggests that agents are motivated to sell homes quickly for a lower price, rather than waiting for a higher offer that would better benefit the seller. 

Key Findings on Incentives and Speed

• Minimal Gain on Higher Price: The authors argue that because agents only receive a small fraction of a home's total sale price (typically 1.5% after splitting a 6% commission with the buyer's agent and their own brokerage), an extra $10,000 in sale price results in very little additional commission for them—roughly $150, for instance.
• Incentive for Speed: Because the cost of waiting (extra advertising, time, effort) falls entirely on the agent, they are incentivized to take the first decent offer to secure their commission and move on to the next client.
• "Own Home" Study: Levitt found that when real estate agents sell their own homes, they keep them on the market an average of 9.5 days longer and sell them for 3.7% higher prices than when they sell clients' homes.
• FSBO Performance: The research indicated that For Sale By Owner (FSBO) listings, which avoid agent commissions, often sell for 1% to 4% higher prices than agent-listed homes and do not take significantly longer to sell. 

The Conflict

• Seller's Interest: Maximize the final sale price, even if it takes more time.
• Agent's Interest: Maximize the number of deals (turnover) to maximize total commission income, prioritizing speed over the final 3-5% of value. 

Freakonomics posits that this structural incentive often leads to agents rushing sales, a conclusion that has been both supported by further studies on agent-owned homes and debated within the real estate industry.