I would very much like to sell my home here in Rochester. Based on what I see of comparable houses sold in my
community, in similar condition, I should expect to sell it for $190,000.
Despite being an economist, I am actually quite skeptical of "middlemen" but probably for reasons that many folks are. But that is for another day. In any case, I do not wish to use a realtor to sell my house. Why? Because my realtor, for what I view as work that is easily substituted for, will earn 3% of the price of my house as the fee for helping me sell it.
If you see a commercial for a Real Estate Agency you might think you would never sell your home if you did not have the professional services rendered from a licensed real estate professional.
(a) Suppose the scare mongering is right and that I won't be able to sell my house as effectively as a professional. By how much would my house price have to fall (as a result of my bad marketing strategies) in order for me to justify hiring a realtor at first glance? What is one of the assumptions I am making when doing this crude calculation? What does this do to my calculation?