Is hiring agent to sell worth it.

[Jacob Bindler]

Somewhat dated, but still one of the best studies. 

MARKET DISTORTIONS WHEN AGENTS ARE BETTER INFORMED: THE VALUE OF INFORMATION IN REAL ESTATE

This is an abstract. 

Agents are often better informed than the clients who hire them and may exploit this informational advantage. Real-estate agents, who know much more about the housing market than the typical homeowner, are one example. Because real estate agents receive only a small share of the incremental profit when a house sells for a higher value, there is an incentive for them to convince their clients to sell their houses too cheaply and too quickly. We test these predictions by comparing home sales in which real estate agents are hired by others to sell a home to instances in which a real estate agent sells his or her own home. In the former case, the agent has distorted incentives; in the latter case, the agent wants to pursue the first-best. Consistent with the theory, we find homes owned by real estate agents sell for about 3.7 percent more than other houses and stay on the market about 9.5 days longer, even after controlling for a wide range of housing characteristics. Situations in which the agent's informational advantage is larger lead to even greater distortions.

http://www.nber.org/papers/w11053.pdf 

[Joshua D.]

@Jacob Bindler

Not sure about all the philosophy behind this stuff, but i can tell you my experience. 

We had a house we had lived in for 2 years and bought for 47k. 

We rehabbed and refinanced 1 year into the project. had a appraisal on it for 127k. 

Went to sell it and our Realtor told us we would be crazy to list it for less than 145k. We thought she was crazy... 127k was what the appraisal came back at. With Comps. 

We decided to listen to her and it had a full price offer the first day. 

She got us 18k more for our house than we thought... 

She was worth it...