On Sat, 12 Aug 2006 22:12:27 -0400, Jonathan Goodish
wrote:


If I hire someone to represent me and sell my airplane (or house, etc.)
I expect them to represent MY best interests, because that's what
they're being paid to do. This usually works out fine for everyone,
because the broker gets a percentage of the sale, so he has incentive to
get the highest possible sale price.

I disagree. The broker's interest is to sell the plane/home so that
they receive their commission.

The broker is making their 3% no matter the sale price, and the
difference between a high and low sales price is not substantial
enough to make a broker hold for a better price.

Example (a 10% price reduction to get the deal done)
3% of $200k = $6k
3% of $180k = $5.4k

Both parties are out 10%, but the seller is out $20k, meanwhile the
broker is only out $600 bucks. When the mortgage is due, most people
would rather have $5400 in their pocket today vs a potential of $6000
in the future.

Also, keep in mind that if the high price is held, and the plane does
not selll in a few months, the seller is likely to blame the broker,
and terminate or not renew the contract with the broker, in which case
the broker's income went from $5400 to $0. So that is a worst case
scenario for the broker.

The only thing offsetting the broker's desire to get the deal done is
the need for future repeat business. They will not be in business for
long if they get a reputation for screwing their clients.