Hacker News Reader

If a buyer’s agent gets any percentage of a sale, the buyer’s agent and the buyer have misaligned interests. They might ‘represent’ the buyer, but the buyer’s agent has the same economic incentives as the seller (higher price, faster sale, fewer contingencies).

View on HN

Fundamentally you’re correct, but the much bigger incentive on BOTH sides is to close the deal quickly. If they spend twice the amount of time on the transaction, their earnings per hour get cut in half. That’s a much bigger impact then a few percentage points in price swings.

The point about speed would be true under pretty much any incentive model except an hourly rate for the buy side.

My point is when you are buying, your agent wants you to pay more. This is not what you want generally. It is fundamentally flawed.

I agree, on the sell side it creates an incentive for an agent to not push for marginal price improvements. The incentives are misaligned on both sides of the transaction.

On net you get round-tripped on misaligned incentives with the percentage model.

Reply on news.ycombinator.com