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Bubble - Bubble-lusionsWHY MOST REAL-ESTATE AGENTS AREN'T...

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Bubble-lusionsWHY MOST REAL-ESTATE AGENTS AREN'T GETTING RICH. By Austan Goolsbee Posted Friday, Aug. 26, 2005, at 1:20 PM ET During most of history's great economic bubbles, only a few people made a mint from the bubble itself. Instead, it's often the people supplying the bubble's participants who stand the best chance of reaping profits that last after the good times end. That's the lesson of the 1849 gold rush, during which Levi Strauss sold blue jeans to miners and made a fortune far greater than any of his customers. The current housing bubble—prices have doubled in the last four years in hot markets like Boston, Washington, D.C., and parts of California—is breeding a lot of would-be Strausses. One seemingly obvious path to riches is to become a real-estate broker. For many decades, agents have successfully kept their payments steady as a fixed share of the value of the houses they sell. In most cities, the rate is around 6 percent, split between the buyer's and the seller's agents. The lack of price competition has attracted the notice of anti-
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