As someone who just sold a house and is currently trying to buy one, I found this pretty interesting. We’ve lost two bidding wars where houses listed ~$5k under what they’re worth sold for (my opinion) ~$10k over what they’re worth. We’re also considering making an offer at $10k under list price for a house that’s probably listed $5k over what it’s worth and has been on the market for a comparative eternity.
Regarding the Stanford study:
We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices. However, those who use brokers sell their houses more quickly.
This makes sense, because unless sellers are systematically underpricing houses (the opposite of the direction I’d expect), they don’t actually control the sale price, and the realtor on the sellers’ side is there to help the seller find the market price faster (which they appear to do).
Some other confounders with realtors selling their own houses are:
They probably have more expensive houses than the average (since they have high incomes)
I suspect they’re more likely to have house features that are underappreciated by (most of) the market, like well-maintained roofs
If you combine expensive houses with hard to market features, you get houses that sell for more but sell slower. The more-expensive-house hypothesis seems like something you could control for, but it would be hard to control for the second without extremely detailed (sometimes subjective) information about the houses.
As someone who just sold a house and is currently trying to buy one, I found this pretty interesting. We’ve lost two bidding wars where houses listed ~$5k under what they’re worth sold for (my opinion) ~$10k over what they’re worth. We’re also considering making an offer at $10k under list price for a house that’s probably listed $5k over what it’s worth and has been on the market for a comparative eternity.
Regarding the Stanford study:
This makes sense, because unless sellers are systematically underpricing houses (the opposite of the direction I’d expect), they don’t actually control the sale price, and the realtor on the sellers’ side is there to help the seller find the market price faster (which they appear to do).
Some other confounders with realtors selling their own houses are:
They probably have more expensive houses than the average (since they have high incomes)
I suspect they’re more likely to have house features that are underappreciated by (most of) the market, like well-maintained roofs
If you combine expensive houses with hard to market features, you get houses that sell for more but sell slower. The more-expensive-house hypothesis seems like something you could control for, but it would be hard to control for the second without extremely detailed (sometimes subjective) information about the houses.