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Comment by scarejunba | Hacker News Reader

Wouldn't you want to say "My Zillow prediction is $1.2 million, you get 20% of any more than that if you sell by June but only this low rate otherwise"? Anyone with true ability would take the deal.

Aligning the incentives etc.

If you flatrate it, they don't have an incentive to find you a big buyer.

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There's something in here but 1) Zillow/Redfin predictions bounce all over the place based (I think) on recent local sales 2) Good real estate agents are good at estimating actual selling prices. I don't know if "ability" in a real estate agent results in a house being sold for more than it's worth.

Not sure how many purchases go for cash only but I gather that bank won't give mortgage if price of the house higher than appraised one, since it won't recover the value in case of the default ?

They won't loan you more than X% of the appraised value, but you can make that up with the down payment (or pay the whole thing in cash, as you say).

But magically, if you know the right collection of real estate agent, appraisers, and mortgage brokers, the house always appraises for what you need it to in order for the loan to go through.

True, but that right collection will also ensure the price you need isn't unreasonable. If the house is worth $300,000 and you need $301,500 that is in the margin of error (which I doubt is statically calculated, but if it was). If you need $500,000 on the same house you won't get it.

Maybe they will post 2008. But you would be surprised at how those same combination of people would be complicit in the loan process far outside the margin of error back then.

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