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If the NJ bubble blog post is correct and listing agents are being rewarded for getting sellers to drop their asking prices, industry regulators should begin asking serious questions about conflicts of interest and breaches of fiduciary duty. Isn’t the listing agent’s legal obligation to get the highest price for the seller? Wonder if the dual agency or designated agency — a form of brokerage where a single agency tries to represent both buyers and sellers — could be at work behind this anecdote. If so, my guess is that industry critics and a few class action lawyers will be watching this trends closely.

The authors of _Freakonomics_, or some other economists should also take note of this trends, and take a look at a trend we saw last year in Boston. Some sellers would rather drop their agents than drop their price, or more specifically their net profit after paying real estate commissions. If they can drop their price by the amount of the commission, why not say goodbye to the listing agent and their newest conflict of interest?

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