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You are here: Home / 5 Liberal Arts / Culture / Freakonomics on Buying a Home

Freakonomics on Buying a Home

November 13, 2009 by mattperman

I made note of these two interesting points when I read the original Freakonomics a few years ago, to remember whenever buying and selling a home. They are from pages 7-9 and 71-76.

1. On Incentives

Incentives not aligned between seller and real estate agent—if the agent sells your house for $10,000 less, they lose only $150 in commission, while you lose $10,000. Thus, the incentives create a motivation for quick sales, and $150 or so is a small price to pay.

2. On Code Words

Real-estate agent code: Descriptive words (granite, state-of-the-art, corian, maple gourmet) mean it is a good house, and are associated with a higher selling price and used by agents when selling their own homes. Empty adjectives (fantastic, spacious, charming, great neighborhood, !) are code for “not much worth describing.”

  1. Fantastic and charming = not much worth describing
  2. Spacious = impractical
  3. Great neighborhood = this house not that great, but there are nice ones around
  4. ! = real shortcomings
  5. Granite, gourmet, corian, etc. are specific and straightforward. If you like granite, you might like the house; but even if you don’t, granite certainly doesn’t connote a fixer-upper.
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About Matt Perman

 

I am the director of career development at The King’s College NYC, co-founder of What’s Best Next, and the author of What’s Best Next: How the Gospel Transforms the Way You Get Things Done. This is my personal website where I blog on four of my favorite topics: theology, apologetics, culture, and living in New York City.

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