Hacker News Reader

Comment by d0lph | Hacker News Reader

Couldn't you just rebalance the commission so the pay increase is the majority of the commission.

Not saying the current situation isn't messed up, but there is no reason it couldn't be fixed.

It's hard to design an incentive structure that's perfectly aligned. In the case of a commission only on the increase, now they've gone from having too much of an incentive to get any deal done quickly to not enough of an incentive to close a deal even if it isn't a large increase. You can fiddle around with a fixed part and incentive part, but it is very hard to find the right spot. One alternative is to pay by the hour but that comes with its own set of perverse incentives.

You don't need the agent to close the deal. If the agent peters out after the first hour of negotiations, you can take whatever they put on the table and continue yourself.

Anyway, look at the numbers here: a good salary negotiation takes maybe 5-20hrs to fight for, I don't know, $10K-$50K/yr gain? And a $5-$50k sign-on bonus? Even targeting an "premium consulting" rate of $500/hour, the agent can make a lot of hay to get their cut, putting in the basic standard amount of work.

Yeah I can see that, although in that case you do need to prove to your agent what you were making before, and if they feel it's not worth their time they will be more likely to pass on working with you.

But that's a whole paradigm shift in thinking about agency, and they're perfectly happy with how things operate currently. They would have to spend a lot more time actually negotiating.

In the case of real estate, the idea that you absolutely need to work with an agent is so entrenched that it's very difficult to get anyone to consider the alternative outlook.

Reply on news.ycombinator.com