The book Freakonomics is getting plenty of attention lately, for taking a more data oriented approach to answering some very interesting questions. Wired Magazine is now running an excerpt discussing how real estate agents sell homes. The economists who wrote the book compared data from when real estate agents sold their own homes against the data when they sold homes for others. What they found, not surprisingly, was that the agents did a much better job selling their own homes. What was more interesting, though, was the way they did this -- often by using certain keyword triggers in housing ads. Anyone who has done enough real estate shopping probably recognizes much of this intuitively. "Charming" = small or odd in some way. However, the statistical analysis supported these findings, and actually suggested what words to avoid in advertising a home, and what things to watch out for (basically, watch out for general adjectives, and look for actual factual descriptions). Even though an agent is supposedly interested in getting you the highest price, they also have the incentive to get your deal done and move onto the next deal. So, they're likely to push you to take the first "good enough" deal, rather than the best deal you can get. What's most interesting, however, is that at the end of the article, the authors note that the internet is starting to change this. It's all a question of who has access to the information. It used to be that the agents clearly had a huge advantage. However, with the amount of information on the internet, the information advantage is shrinking -- and "mere mortals" are able to close the gap when selling a home.
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