Setting a price
According to the NAR, people selling their homes often choose a price based on need, ego or greed. Particularly in a tough real-estate market, sellers often want to price their homes based on how much they need to get out of the sale in order to purchase a new property.
Unfortunately, what a seller needs to make on a property has nothing to do with market conditions, which are generally governed by supply and demand, among other economic factors.
The same goes for sale prices that are dictated by ego or greed. Just because a neighbor's house sold for an attractive price doesn't mean yours should, as well, unless your home is more valuable or market conditions have changed.
Accepting an offer
The final piece of the puzzle in selling a house is deciding which offer to take. Levitt and Dubner say that their data suggest that agents "hold out" for a higher price on their own homes. Assuming this is true, it is important to remember that when it comes to selling their homes, agents are the decision-makers. When an agent is selling a client's home, the seller is in the driver's seat. The agent must balance the desire to get a price that will please the seller with the need to ensure that the home sells in a timely manner — or at all.
When selling their own homes, agents can afford to gamble that a better offer might come along, even though this plan will often fall through, particularly if the house stays on the market too long. This is similar to when stockbrokers make more money trading for themselves than for you: They are willing to take more risks in their own account than they think are appropriate for a client's account.
In addition, a common practice for real-estate agents is to relist a home that isn't selling. This is because a listing's "days on market" can affect the price the seller can obtain for the property. When a home sits for too long, buyers assume the price is too high, the sellers must be desperate or something is wrong with the property. This can kill a seller's chance of getting a fair price, and real-estate agents must balance this risk with the seller's desire to hold out for a higher price.
Type "real-estate agents are" into a Google search bar, and among the first options to appear are "scum" and "crooks." This may be why this little fact from "Freakonomics" has had so much staying power, even though it was published more than five years ago.
Perhaps real-estate agents really do sell their own homes for more. But just as with many simple statistics, the data can tell us only that a correlation exists. The reasons are left to speculation.
Okay; so we are refering to a book published in 2005, six (6); yes, six years old ! The information was gathered, compiled and edited long before 2005and an entirely different market and economy! What is the accuracy level and reletivity to todays' REAL ESTATE market?
I may be wrong, but back in '04 realtors could submit "Comps" to the appraiser when they met at the home under-contract, during the inspection by the appraiser for establishing value. Just try to do that today in 2011 !
A real estate agent will hold out for themselves but when they are doing for others it is better to work more homes quicker than sell one for more over a longer time.