Most homebuyers and sellers approach their agent the way they’d approach a doctor or accountant — as a professional whose advice is meant to serve them. The reality is closer to a salesperson on commission whose interests overlap with yours partially, not entirely. Agents are not villains. They’re rational economic actors operating under a fee structure that quietly tilts their incentives in ways consumers rarely notice until the deal is closed and the check is cashed.
The commission math nudges toward “close, not optimize”
A standard agent’s commission is a percentage of the sale price. On the seller side, that sounds aligned — higher price, higher commission. The math is misleading. A study by economists Steven Levitt and Chad Syverson found agents kept their own homes on the market longer and sold them for more than comparable client homes, because the marginal commission on holding out for a better offer is small to the agent ($150 on a $10,000 price increase) but significant to the seller ($9,850). The agent’s strongest incentive is closing the deal, not maximizing it.
Buyer’s agents have a similar tilt
Buyer’s agents are also paid as a percentage of the purchase price, which is an awkward incentive — they earn more when their client pays more. In recent years, the National Association of Realtors settlement and related rule changes have started reshaping how buyer’s commissions are negotiated and disclosed, but the underlying tension remains. A buyer’s agent steering a client toward a higher offer to “win” a bidding war is, in the agent’s economics, also raising their own paycheck. Most won’t say it that way. Few are unaware of it.
“Dual agency” is a structural conflict
In many states, the same agent or brokerage can represent both buyer and seller in the same transaction — “dual agency.” It’s legal with disclosure, and brokerages prefer it because they collect both sides of the commission. From the consumer’s perspective, it eliminates the adversarial advocacy that justifies the agent’s role in the first place. The same person cannot fully advocate for the lowest price for the buyer and the highest price for the seller. Several states have moved toward limiting dual agency, but it remains common and is often agreed to in fine print.
How to work with agents anyway
Agents do bring real value — local market knowledge, transaction logistics, access to listings, negotiation experience. The fix isn’t avoiding them; it’s understanding the incentive structure and adjusting accordingly. Get clear, written terms. Ask directly about dual agency. Be skeptical of “you should accept this offer” advice when the offer is below your target. Compare comparable sales yourself. Negotiate the commission rate — it’s negotiable, despite years of industry messaging suggesting otherwise. Treat the agent as a useful expert, not an oracle.
The bottom line
Your agent’s interests overlap with yours, but they don’t match. Closing fast, closing at all, and closing both sides of the deal are all worth more to them than the marginal dollar that matters to you. Knowing where the incentives diverge is most of the protection.
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