For those readers who think brokers can successfully list their own houses at higher prices than their client’s, ponder this:

"You ain't goin' nowhere"

“You ain’t goin’ nowhere”

57 Byram Shore Road, owned by a relative of a real estate agent, has taken still another price cut and is now asking $2.095 million. That’s not a bad price, and maybe this cut will do it, but the house has been actively for sale (not counting periods when it was off the market) for 1,859 days. It’s first price was $5,775,000. Has anyone seen that Freakonomics professor who claims that real estate agents know the “real” value of their own homes and price them accordingly?

12 Comments

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12 responses to “For those readers who think brokers can successfully list their own houses at higher prices than their client’s, ponder this:

  1. anon2

    this subject of overpricing by a broker was brought up at gideon’s blog yesterday re 504 north. the seller there, also a broker, started out selling it at some preposterous price. gideon, the appeaser, was able to justify (excuse) the overpricing, saying normally she is spot on. how could that possibly be? if a broker is willing to overprice their own home, they are clueless (worthless) in my book. i think one question every seller should ask before hiring an agent is “are you now or have you ever sold a home you own.” then ask for details.

  2. InfoDiva

    One anecdote does not a rebuttal make.

    The Freakonomics guys looked at 100,000 transactions. They have PhDs in economics and their specialty is price theory. They have no particular skin in this game.

    Your credentials, please?

    • A PhD in economics is supposed to impress us? Really? I have a degree in philosophy, and as part of earning that degree I studied political history and thus had the opportunity to see the results of certain economists’ best theories. I enjoyed Freakonomics and I was quite persuaded by the authors’ insights, but not once did I mistake either of them for the Pope. And to repeat, the mere possession of a PhD, in any subject, does not guarantee infallibility.(Nor, for that matter, does a BA in philosophy.)

  3. Price is one thing. … And this is only my opinion… But, an agent owned listing should be staged better. The decor is very specific and would not appeal to a wide range in my best judgement.

  4. Anonymous

    i have come to the conclusion that the world could be ending and the sky falling, and gideon will point out a positive attribute like, “well, there’s a nice patch of sunlight right behind that giant mushroom cloud off in the distance. lovely, isn’t it?”

  5. anonymous

    Pink and green flounce went the way of Muffy, who left town a long time ago and is playing golf in Del Ray. Air conditioning on the 2nd and 3rd floor? I think I’ll take dinner in my room tonight, dear.

  6. Balzac

    PhD’s or no, a very useful service is provided when unrealistic high price expectations are punctured by observations of reality.

  7. I'm thinking, ladies only

    I don’t think there is a man living in that house

  8. The real reason isn’t what Freakononmics says. It’s far simpler:
    1. Everybody loves their own house– after all, they bought it.
    2. Because they love it, they value it more highly than other houses that may be similar in value.
    3. Part of a listing broker’s job is to bring realism to the seller: I know you love it, but let me give you an objective opinion…
    4. But when the listing broker and the seller are the same person, there’s no one to pop the seller’s bubble, so the house goes on the market at the inflated price. We see this all the time in the Upper Left Corner– can’t imagine it’s any different in Greenwich.

    But Freakonomics points out that brokers get more for their own houses. How can this be, unless the Evil Brokers underprice everyone else’s listings just to get them sold quickly? An intelligent broker may not be able to price his house, but he knows what features buyers want. Their homes are better-prepared and presented than the average house. So they sell for more– if the owner/broker is smart enough not to price it at his own inflated opinion of value in the first place–