Read the paper by Levitt and Syverson (2007). \"Market Distortions when Agents a
ID: 1215858 • Letter: R
Question
Read the paper by Levitt and Syverson (2007). "Market Distortions when Agents are Better Informed: The Value of Information in Real Estate Transactions," Working Paper, University of Chicago Booth, available in the Learning Materials folder (scroll down to the bottom). Watch also the video clip on Incentives of Real Estate Agents (by Levitt and Dubner). Imagine you are relocating 3 months from now and wish to sell your home. You consider either hiring a real estate agent or putting the property for sale yourself. 1. Explain how you are going to make this decision. If you hire a real estate agent, will the agent be willing to work in your interest of finding the best customer possible? 2. Design two ways in which you can motivate the real estate agent to act in your best interest. Will your incentive scheme work? Make use of references to support your claims.
Explanation / Answer
Ans:
1)
Family and companions who've as of late acquired a home can be awesome wellsprings of referrals of value land operators. People you know can give you the scoop on what it resembles to truly work with a specific operator e.g. how proficient that specialist is, the way well that operator knows the group and its homes, and how well he or she might have the capacity to address your issues - as far as the kind of property you need to purchase and its cost.
You'll need to know whether the operator these individuals worked with earnestly attempted to address their issues, whether that specialist benefited an occupation in indicating just homes that were in the purchaser's value range and whether the operator was wonderful to work with and had enough time to commit to the purchaser.
In the event that you are hoping to purchase in a specific neighborhood or uncommon class of home e.g noteworthy Victorian you'll need to get suggestions of specialists who have a mastery and demonstrated reputation here.
When you limit it down to a couple of operators who interest you, plan gatherings with them. Get some information about their years of experience, foundation, honors and assignments and to what extent they've worked with their office.
Discuss the sort of home you're keen on acquiring, your value range and the areas you like and get their criticism on how they can help your pursuit.
Ask them how they'll stay in contact with redesign you on new homes available e.g by telephone, email or instant message their hours and their present workload and accessibility. Keep notes so you can recollect who said what when it comes time to settle on your choice.
Converse with purchasers
When you meet with the operators, request the names of some present and past customers. Meeting these purchasers, and get some information about their encounters working with a specific specialist pluses and minuses of working with that operator and in the event that they'd suggest him or her. Conversing with real purchasers ought to give you a firm thought of which specialist will be the best one for you.
Whether purchasing or offering, your operator ought to be a full time proficient with high moral guidelines.
* Look for expert assignments that will distinguish the specialist with your particular need.
* Know your business association with the specialist, which ought to be clarified on the initially meeting.
* The specialist ought to have an expert appearance and not clothing that ought to be worn in the back yard.
* The specialist ought to furnish you with exploration in the business sector you are purchasing and offering.
* Response time is essential, and his strength demonstrate whether the specialist is low maintenance or not. Call or email the operator and perceive to what extent it takes to repond. In the event that it takes a day to react, the specialist might be low maintenance. On the off chance that it takes that long on the underlying test, to what extent will it take when you truly require the specialist.
* Does the operator have a site advancing his organization and postings. Is it cross referenced with different sites to get greatest scope. These are a portion of the things that low maintenance specialists don't have.
2)
Financial matters is the investigation of human conduct, clarified through the examination of motivating forces. Accordingly, to comprehend human conduct, one must comprehend the motivators which inspire him vigorously. Market analysts love motivating forces. The commonplace financial expert trusts the world has not yet created an issue that he can't settle if given a free hand to outline the best possible motivating force plan.
motivating forces come in three assortments: good, social, and monetary. Moral motivators rouse a person to carry on of or conviction. Social motivations rouse people to act keeping in mind the end goal to maintain a strategic distance from disgrace or accomplish magnificence. At long last, monetary impetuses direct individuals to act to their greatest advantage. a land specialist, including the present state of nearby lodging markets. They can consolidate this better learning than speed up a home deal which might be at a cost not as much as what the merchant could have acquired by a more extended posting period. The land specialist's bonus is organized in a manner that what might be a noteworthy increment in benefit for the dealers likens to unimportant increment in the expenses they get for the offer of the home. Also, the land specialist's believability is regularly connected to how quick a house is sold, i.e. days available. The proof of land specialists utilizing their educational favorable position to frighten venders into tolerating a lower offer to accomplish an arrangement which is in the operator's best advantage.
Managing decently and sincerely implies an operator must not distort realities to purchasers or venders. Deception is the demonstration of making a false or deluding affirmation about something. In a land exchange, both sides are qualified for divulgence of material truths. A material actuality is any truth that would appear to be prone to influence the judgment of the key in offering agree to the specialist to go into the specific exchange on the predetermined terms. Whatever a sensible individual would feel essential in settling on a purchase or offer choice is viewed as a material truth.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.