I'm always baffled that in this day and age most people are still paying such high real estate commissions to traditional real estate agents to sell their places - especially at the high end - or passing up the opportunity to get a commission rebate from their real estate agents. But maybe it's still the early days of disruption of the traditional real estate model - like the early days of the demise of the stock broker. Then again I recently stumbled upon this great episode of Penn and Teller's Bullshit that is a perfect allegory for why real estate commissions may remain high for quite some time due to the gullibility of the general public. Sorry general public.
In case you've never seen this program these guys go around and debunk the bullshit that most people take for granted. As the masters of deception they are the perfect duo to take on this noble task and they do it with a highly entertaining flair.
This particular episode, called The Best, aired back in August 2005 and in it they show how easily people can be fooled into believing that something is in fact The Best and of course be willing to pay extra for it. In this segment of the episode they set the stage in a fancy restaurant.
Be warned that there is possibly offensive language in this video and it is 10 minutes long. If you don't want to watch the whole thing you can jump to some of the finer scenes like the wine performance at 3:25 or the Kobe beef hoax at 5:35. The big reveal is at 9:30.
The bottom line is that if people believe they are getting The Best they will pay a handsome premium for it and convince themselves that they in fact did get something special. In real estate the deception is even more insidious because a) people want desperately to believe that hiring the right real estate agent is going to net them 10s of thousands of dollars more on their home and b) the most successful real estate agents are extremely skilled in convincing unsuspecting consumers that they have some kind of magic dust that is worth a full commission. Being the "top producing neighborhood expert" or offering an "industry leading marketing program" is akin to that hand massaged Kobe cow.
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