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Pimps more valuable than real estate agents?

Those Freakonomics guys are back again with a new book called Super-Freakonomics, where they continue their Realtor bashing with even more outrageous comments directed towards real estate agents.

With the first book, they posited the question How Are Real Estate Agents Like the Ku Klux Klan?

They're actually NOT like the Ku Klux Klan, of course, but their position was that when light was shown on the modus operandi of the KKK, they became irrelevant, as will the lowly Realtor.

In their new book Super-Freakonomics they comb the depths of intellectual dishonesty by declaring that prostitutes with pimps make more money but that home sellers with real estate agents actually net less.

In arriving at their conclusion that a pimp provides more value than a real estate agent, the authors analyzed two completely unrelated studies.

The first study found that prostitutes working solo in Chicago earn $325 a week while performing an average of 7.8 tricks, while prostitutes with a pimp working the same area earn $410 a week while doing only 6.2 tricks.

Even after paying a 25%, the authors say, prostitutes with a pimp "come out ahead on just about every front."

They contrast this with a study out of Madison, Wis., that concluded that houses sold by owners over the Internet fetched about the same price as those sold by real estate agents.

Why even compare pimps to real estate agents? Because it's outrageous, of course.

The average real estate agent is a 53-year old woman. Not the kind of person likely to be involved in prostitution on any level.

But isn't it fun to insult nice hard-working folks and won't it sell a lot of books!

"A Realtor and a pimp perform the same primary service: marketing your product to potential customers," Levitt and Dubner explain. The go on to say: "once you consider the value you get for each of these two agents, it seems clear that a pimp's services are considerably more valuable than a Realtor's."

Super-Freaky: Intellectual dishonesty or disingenuous immorality?

Posted by Marlow Harris on 11/02/2009 05:06 PM

Comments (95)

freakonomics

95 Comments on Pimps more valuable than real estate agents?

NOV

I will comment to give you some points, but the book will stay in the store.

I doubt anyone will take this stuff seriously.

Unrepresented sellers are very rare in this market. If it's new, the timing of this published release is way off. Sellers need a good agent with a strong marketing program and the ability to counsel with regard to prices. In our area it's common to sell for more by coming out with a lower price.

Ouch. That is about all I can say on that one. This one hurt.

Marlow...

Thanks a lot. Now I have to read the book. Like I don't have enough to do :)

TLW...ROAR!

I am assuming the authors didn't take into account the number of deals that fell apart because there was no one to mediate between buyer and seller. I am sure they also failed to consider the amount of liability sellers took upon themselves by failing to have a professional help them understand what they were legally required to disclose.

Hi Marlow - The Freakonomics boys are losers...plain & simple. I give them credit, though. They have jumped on the sensationalism band wagon and made "cake". Congrats on the gold star!

Just picked up a copy of the book and while thumbing through it I seen the prostitution examples but not the reference to r/e agents. Now I must read this book as a 'just-in-case' clients have read it. I'm pretty sure the whole point is to make money and to be a little shocking at the same time. But also it can spruce up economics so it's not such a dry topic; that's what college text books are for :)

Marlow,

As a student of the lending and real estate industry, I was taken very much back with how the first book was presented. Certainly not a quality piece. I have not read the sequel but will add it to my list to complete. Both of how are industries' function have been shaped and reshaped. We need to get our professions back or to that of respectable. I have had the opportunity to work with those in both our professions that are unsurpassed in service and ethics because of the commitment to helping others, and they would be that way no matter what sales and consulation profession they were it.

I think it all depends on who you have for a realtor, but I think either way it's a tacky comparison.

This is positively preposterous. I personally don't like being compared to a pimp. But I don't mind sayin at all - better have my money! ;-)

Why promote the book? This type of coverage is just what they are hoping for - get enough buzz about it and the sales will go up. I'm noy going to read it the trash and I sure as hell won't buy a copy. If any of my clients ask me about it - well, there seems to be more economic experts out there than prostitutes is what I'll tell them.

It seems like anyone in the real estate industry is a pretty easy target these days. I think the best comment to this book is, "Pimpin' ain't easy".

I think Dave said it all........

I don't think we can hide our head in the sand. This will probably be a best-seller, just like their first book. Better to be familiar with it because your buyers and sellers might be reading it and you want to be prepared to present more appropriate research and data. A professional and well-researched response will go far to counter their lies and faulty inferences.

Marlow: This is funny. I would be insulted if I thought it was worth it, but this sounds so absurb it's making me laugh.

Hi Marlow. I will happily hide my head in the sand on this one.

If anyone wants to go it alone cause they read this book, I say "Good luck!"

Thanks for writing,

Ken

Hi Marlow ~ They have to be outrageous or else no one would pay any attention! I had not heard of it, and am glad you bought it to my attention. I have no plans on reading it though. I have too many other books in line waiting to be read.

I saw the book on Amazon and in Barnes and Noble recently. Glad I passed it by.

Any potential client who takes these freaks seriously is probably not someone I want to do business with anyways. These guys deserve no attention, and are only preying on a very thin slice of society that thrives on cynicism and absurdity.

Marlow - When we look at what a pimp markets and sells .... it should come as no surprise that these "Pimp-Like" characters would take such a stand ... weather they actually believe it or not. They are Pimping their outrageousness .... are they not? They could easily say the same thing about lawyers ... maybe that will be their third book!

Did someone compare that book to toilet paper because that is what it is good for.

Kudos to Chuck and his humor (above). I think I'll read both books--put 'em on my list for 2010.

Hey people bought Bill Clintons book and I'm sure people will buy a George Bush books. We love fiction books written by people that think they are telling the truth.

The Madison Study is so full of holes it isn't funny... Trying to use it to prove anything is pretty spurious.

I love comment #1. Ok, now I'm just waiting for someone to come into my office (client/customer) and ask me if I've read the book and what's my take on it. All together now, we have to come up with some snappy comebacks!

Hi Marlow ~ I thought it was so sad that their first book was a best seller - many of their comparisons are simply foolishness, meant to outrage. I just read something yesterday in the NYT or the Globe about the new book and the author. Apparently the economist half of the duo, Levitt, is well respected as an economist despite his penchant for the outrageous. His tendency to push the envelope with cuckoo arguments seems to have started in high school. I don't want to stir the pot so I won't describe his topics here. I've had no respect for their work since the first book. But it is always good to know what others are reading about us, no matter (or especially) how absurd.

Liz

Freakanomics was popular with the college crowd - maybe that's one reason why I see some 20 somethings very wary of using a real estate agent. Instead, they jump from one listing agent to another. Thanks for the heads up.

I agree the authors continue to go for the "shock and awe" approach laced with outrageous comparisons. It makes for thought provoking conversations--and gives us an opportunity rise above the pimp and prostitute comparison.

I've heard the authors interviewed before and they're not that creative. They've just taken some old concepts and turned them around with a new spin and made millions in the process. They're not geniuses; they're just a fad. I'm neither impressed nor infatuated by their sometimes ridiculous claims.

NOV

I'm sorry but I almost did not bother commenting on this blog post. I didn't like the comparison, I disagree, ... but you know what, I'll take it as a joke, LOL ha haha

-Nelson

Anyone have an extra copy? I ran out of liners for my bird's cage.

I do not watch "reality" shows and I wouldn't spend a dime of my hard-earned money to buy this book. Anything to make a buck.

I actually enjoyed Freakonomics quite a bit. I wasn't a Realtor back then but some of their beliefs about how a Realtor would benefit from getting the deal done vs. getting the best price for their client probably has a smidgen of validity.

In regards to the FSBO debate I thought I'd just do a bit more research:

NAR Economic Commentary on FSBO's - http://www.realtor.org/research/economists_outlook/commentaries/commentary_falling_fsbo

NY Times article about the Madison study. Lots of good info in here - would be interesting to see what's happened in Madison since the crash - http://www.nytimes.com/2007/06/08/business/08home.html

Chicago Tribune article about the Madison study and why it may still be better for most to use an agent - http://archives.chicagotribune.com/2007/aug/12/business/chi-ym-spending-0812aug12

Hope this helps.

While I don't have a problem with the book, it is their right to say about anything they want, it is just another example of being uneducated about the value we giveour clients. There are way too many negative things written about us that consumers start to believe it. I'm fairly confident that if either of those authors spent just a week in our shoes, they would have more respect and a better appreciation for our profession.

Hi Marlow~ Super-Freakonomics?! Hmmmm....sounds like a pathetic follow up to their first dismal attempt!! But hey...anything to make a buck! Especially in this economy! Thanks for posting!!

Their premise is flawed. You can twist studies to support any position. I suppose the next thing they could say is the accused innocent shouldn't hire lawyers because they can represent their own case in court. Or maybe the authors could publish their own books and do their own promotion without a literary agent? I don't think so.

Remember the book "Dow 36,000" written in 1999 right before the tech bubble burst? Some books like this freakin book belong in the Hall of Shame.

How can they possibly compare a pimp in Chicago to an Agent in Wisconsin? They obviously need an Agent who could explain to them the most basic concept of "location, location, location" :)

Honestly, can't even take "authors" like that seriously....

They are just using outrageous topics to sell books in my opinion! Interesting post!

You have got to be kidding. This is rubbish! I cannot believe that book actually got published. Now I know what to REMOVE from my reading list! Thanks for the heads up!

Mr Levitt is a highly acclaimed economist. His style is totally unorthodox, and often (obviously) ruffles feathers. While I appreciate that it hits close to home for many people here on AR, it is an interesting position for him to take.

So much has been said about lenders in the past 2 years, that I am well aware of what it feels like to have a target on your back. That being said, if you believe that you provide value for you clients, regardles of what you have been compared to by Levitt or your uncle Sal, do your job well, and ignore all the naysayers.

I applaud him for taking an interesting position and defending it. We can all use a different perspective from time to time.

I read the first book, have not seen this one. It is written VERY "tongue in cheek". When I give lectures or seminars....I use the words of a colleague of mine. Take what you want, leave the rest and if I say anything that offends anyone....you will get over it.

Don't take this stuff personally. Decide for yourself to provide more value to your client than you receive in monetary compensation and you continue to prosper.

Thanks!

I'd be hard pressed to think that anyone actually would believe that the studies in the book have any true relevance or factual basis. If I were to read a book like that, I'd take it for what it was..... a bunch of fluff.

Freakonomics guys are like pick pocketing pimps. They make any claim as long as they can cash-in. There are many books to read out-there, and anything Freakonomics is none of them.

Mr Levitt has an uncanny ability to crunch numbers and come up with interesting conclusions. His first book said Sumo wrestlers fix matches and crime dropped nationwide due to Roe vs Wade. Some of his conclusions are probably right and some are assuredly wrong.

The point I would like to make is that I think the pimps in Chicago need continuing education. They seem to be undercharging for the product they are selling. What happened to all the $1000 to $3000 per night escorts we see on Law and Order all the time?

I beleive The National Association of REALTORS has numbers supporting the claim that FISBO's prices are lower than REALTOR assisted sales. We all know that buyers who buy FISBOs immediately go for a price drop because there is no commission involved.

The authors try to hit nerves to sell books. I guess they succeed with topics like abortion, KKK, murder rates and pimps and whores!

Ralph Tiz, CRS, GRI, CLHMS, Broker Associate

I wonder if his number for sales without agent assistance included the ones where the buyers had agents. Because if you eliminate the ones where buyers had agents, there really are very few true unassisted sales (buyer agents do 'assist' the seller in that they bring the buyer, DUH!). I doubt that it's really a statistically significant number.

Well, the whole premise of the book is to be outrageous. That's how you attract attention in this 2 minute attention span society. Better just to ignore it.

Sounds like fiction to me. Maybe they can make a movie out of it, "The Pimp Realtor", or "Madams of Real Estate"..

This is just a "recycled" idea from their first book. It obviously didn't get enough attention the first time around, and so now they are using the Pimp analogy to sell more books. Enough said.

I think you're right Dennis, just think of the money their making.

You have to laugh at them, their FUNNY!!!!

OK, but why single out realtors? Couldn't the same comparison be said for those insurance sales people, car dealers, health insurance industry, or anyone who gets the job done without actually doing so with the best interests of the consumer first. Hmm, come to think of it, the comparison could be made in reference to anyone. So why realtors? Maybe with so many of them out there (how many million are members of NAR) they think they have struck a nerve and will sell the book. If you must read it, borrow it from the library--but don't pad their pockets.

Just consider the source...

They'll probably on Oprah or Ellen next hawking the book.

As a realtor, I think the first reaction to such a comparison is to naturally be defensive. We can think and post about how silly and absurd it is, but I think it's better if we continue to educate the public. Over 4 million copies of the first book sold worldwide according to Time. I've never read that book, but I personally know a lot of professional people that earn 6 figure salaries that have read it and loved it. My point isn't that these people believed everything in the book, but that there's far more than just a sliver of society that you don't want to deal with reading it. Given that 4 million copies of the first sold (and who knows how many additionally borrowed and purchased at second hand stores), it's probably safe to say that there will be quite a few reading this one as well. So let's say only 10% believe all the non-sense in the book - that's over 400,000 people thinking agents are worthless. Granted, the 4M is a worldwide number, but people tend to believe sensationalism like this more than doing research and finding the facts for themselves. I think the number of people that buy in to it is greater than what you think and they are the type of clients you would otherwise be working with.

By the way, here's some related links:

The book's web site
Their blog
Time magazine article

They struck a nerve. What are the stats on time on the market for FISBO's vs Realtor listed properties? The same could be said about almost every service offered by many professions. You have to pay for knowledge and help in certain instances. Why pay lenders fees or interest? A no fee no interest loan is much better for the consumer. They are trying to sell books and it is working.

If I read it right if your looking to make money as a Prostitute it is best to use a Pimp

So if us REALTORS are like pimps then it must also be best to use a Realtor when selling your house.:)

Phil

I do not know about those FSBO stats. I would like to see the numbers. It sounds like a good argument for working for a Broker; those are the real pimps.

Its a money scam from 2 eco profs who made it big the 1st time around and are looking for another hit.....

It just never ends....some folks who don't understand what we do and how hard we work to serve our clients. All they talk about is that "high" commission.

Why spend the money on this book. Rather, use that money to take out one of your best clients to lunch.. It may make him feel good, and you may even get a referral out of it.

Good to be forewarned about such idiots....but continue building your service and your brand.

Marlow ! Yikes !!! If any more of the commenter's go buy this book they may end up on the " Best Sellers " list ! Stop already ! LOL

Weird.....

I hate when people go after us like this. I do understand that there are some dishonest Realtors who could easily be considered worthless... however, there are people like that in every trade. The people that wrote this lack serious credibility. It has been statistically proven, many times over, that people who utilize the service of a professional Realtor, net more money.

Frustrating...

Thanks for the post though!

Be well,

Brendan

How very sad, and truly disturbing that these "men" (?) would take women in Chicago who are perhaps experiencing ravishing tortured lifes . . . and use their sorrow to write a book and compare apples to oranges.

How very sad that these "men" (?) use a prostitutes' shamed and horrofic life to bolster the hype and hysteria of the Real Estate profession.

Even after paying a 25%, the authors say, prostitutes with a pimp "come out ahead on just about every front."

WOW -- how pathetic that these men (?) use their "analysis" to make a point on the backs of these women who are in the MOST lowest state of the human condition . . . selling themselves to strangers on a street corner to (feed): their habits, their children, themselves.

So . . YES, America . . . buy the book. Read all about it . . . hate women, degrade them, make "the oldest profession" fodder for your NY Times Best Seller list.

I wouldn't be a bit surprised if I went to Chicago I wouldn't find Stephen Dubner and Steven Levitt's, wife, mother, daughter plying the same trade that these men (?) find so amusing, and contrite . . . and comparative.

Maybe Oprah will feature these men (?) on her show and include this book in her "TOP PICKS"

Best of luck Stephen Dubner and Steven Levitt -- such SCHOLARS!!

An insightful and helpful post, to be sure. I wish I could put into words how much I appreciate it. Oh wait, I just did!

Yawn. Well, I guess I'd better change my wardrobe.

It is my guess that they chose to compare realtors to Pimps so that they could take their work home with them.

Wow. A ton of snap judgements here. I found the book a (along with the first book) a great read. I expect I'll have fun answering questions it brings.

Off to pimp some houses...

Oh I found my Niche; House Pimping

I think you just helped them sell a few books.

Nice going.

Aloha Marlow,

I don't think the intent of the authors was to insult REA's but to bring attention to statical analysis they have compiled. I think many experienced REA's do help sellers and then there are the amateurs you actually don't. What their saying from my perspective is choose a qualified, experienced Realtor, otherwise statistically you will loose money. Comparing Realtors to Pimps is harsh but I wouldn't take it to seriously. It's all a marketing ploy, however, it does challenge are preconceived notions of things.

Peace,

Why didn't they pick on the pimp for charging 25%? Couldn't they have found a discount one for less?

Just 3 comments:

1) Rick James's estate needs to sue them for use of the term "Super Freak", they dishonor a good song by using it...

2) Tamara (#27), here's your snappy comeback for when someone walks into your office and brings this trash up: "Don't let the door hit ya where the good Lord split ya..." (OK, not so snappy...)

3) How many economists does it take to look intelligent? Two...just not THESE two.

Trying to compare the economic realities or benefits of a legal enterprise versus an illegal activity is a non starter. It was obvious in their first book that one or both of them has a personal axe to grind with realtors. Who cares ? If prostitution is such a viable industry maybe they should try it themselves. Oh, they already are.

There must be regional differences. Sorry to say, but a 53 year old woman is not the "norm" in and around Boston.

Wow, it is too bad when sensationalism is all that sells books. Thanks for bringing this weird analogy to our attention.

Sorry, I used 2007 statistics.

New stats from the NAR show the median age for Realtors is 52: http://www.realtor.org/library/referral/whatistheaverageageofrealtors

And it's about 40/60 male to female ratio.

And over 90% have some college with over 50% having some sort of college degree:

http://www.realtor.org/library/library/fg006

I don't think I would be so quick to give so much publicity to such a negative and obviously uninformed author. I imagine they appreciate your bashing them..

I think many of the commenters here have missed the point of these two books. For a starter, the authors' goal was to demonstrate how statistics can be used to suppport almost any premise. Politicians have known this for years and are quick to dig up statistics when needed.

It is useful to recognize that conclusions based on selected statistics may not prove anything but they do get our attention. We need to pay attention if we want to get anything done, or if we want to keep it from getting done!

The comparison between pimps and Realtors was intended to get the thought process started. It clearly accomplished that objective. I am sure the authors did not really intend to convince anyone that there is little difference between the two . . . . . . or did they? Lighten up folks!

These authors are very well educated and intelligent economists. Read the books, I think you will enjoy them. For sure you will never again be so quick to jump on statiscally based bandwagons!

"This is a great time to buy a house".

Akron, Ohio

I recently had a listing expire, an estate in which the youngest daughter had power of attorney for her deceased mother. This place needed a complete rehab and was going to sell very cheap based on the neighborhood alone.

My client, the daughter had been trying to sell the house on her own for about 140% of what the actual sale price should have been for OVER 2 YEARS.

Towards the end of the contract, after turning down multiple full asking offers, I brought a buyer offering almost 15% over the asking.

Guess what that house is doing now?? Still sitting there...vacant, dusty, old and moldy. She refused to accept anything below this outrageous number she had conceived about 3 years ago. That house will NEVER sell for her ideal price, and I got her as close as she'll ever get to it.

The latest Newsweek says of the Super Freakanomics, "We read it so you don't have to."

Newsweek gives four examples from the book, one about prostitutes but nothing to do with real estate. Newsweek refers to Levitt and Dubner as "the dismal- science duo."

I read parts of the first book.

Oh Great, now I have been called a pimp. This business keep on getting tougher and tougher all the time.

I couldn't read all the comments but all I can say is "whatever" and roll my eyes. How silly. I wonder if they had a bad experience with a Realtor or something. I also wonder if they actually did the research. As far as my stats go. most FSBO's actually end up listing with Realtor because of the hardships of selling on your own.

It seems there will always be those who think we just make too much easy money, such as a pimp. Hope they don't need to sell a house anytime soon :o)!

I don't find much credit to the Madison study. In my experience I've found that by owners try to get more for their house than any recent sale because, of course, their house is so much better. As one of my buyers said "don't bother showing me any of those for sale by owners and help you sell it kinds, they are all priced way over the marketplace."

Marlow - Some of these comments are so funny, I love it. Not all pimps and real estate agents are created equal.

I like Dennis' idea. I'd much rather watch The Madams of Real Estate than the narcissistic kids of Million Dollar Listing.

NOV

They need to throw in the legal liability these people face in addition to deals breaking.

Here's a good book . . .

Here's a recent review of the book:

"SuperFreakonomics As Fun As Predecessor"

Thankfully, no mention of us no-value Realtors...

I read the original Freakonomics book. I then posted my thoughts about the book with a review on Amazon.com's site. If you read this one, please let potential buyers know how you feel.

In the first Freakonomics, one of the points made was that Realtors® think only in terms of their commission and how much more money they can make by jacking the price up.

First forgetting that sellers are usually the ones who want to push the list price up and agents who usually try to talk them down ...

Assuming that a $300,000 house sells for $10,000 more than it's worth only because the agents are looking out for #1, each agent might earn an extra $200 after splits with their brokers. Now wouldn't it be nice if they could turn the same 'trick' at least 6.2 times a week?

They have time or find value in a study of hookers in Chicago? Great in depth info gathering on their part. I think we should fight back and leave the book 'dust covered' in the stores. How about it?

I wonder if the hookers are upset they are being compared to realtors? :-0

Don't think we will be seeing this book on the New York Times best seller list anytime soon.

Some people have too much time on thier hands and too much hate in thier heart.

Boulder City Steve

NOV

Marlow, do they talk about the Sellers that lost their shirt on FREE concessions and repairs that they did not need to make? The price may be similar, however, the concessions for my last unconverted FSBO prospect totaled about $8,000. He also netted $20,000 BELOW market value. He was trying to prove that he could sell his home on his own.

It costed him about $28,000 and they practically kicked him out of his home. By the way the other agent still charged him 4% (another $12,000) to represent both sides.

NOV

Well Marlow, If I ever decide to make a career change, I'll have to look into that "pimp thang"!

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