real-estate-boston-pimp

First, let me state this isn’t my question. It is a question asked by Steven Levitt and Stephen Dubner in their recently-published book Superfreaknomics.

So, who does add more value? Are the authors correct in claiming that the economic impact of a pimp (see p.37) is greater than that of hiring a Realtor?

The authors note that, on the basis of their data (a study in Chicago) prostitutes working with a pimp earned, on average, almost $100 more per week than did their counterparts who worked without a pimp. This happened while pimps took, on average, a 25% commission on the transaction.

On the other hand, the authors claim, home sellers do not get a comparable benefit from employing a Realtor, who, they acknowledge, charges a considerably lower commission (averaging 5%). The authors’ claim that “a Realtor and a pimp perform the same primary service: marketing your product to potential customers.” Working with this assumption, they then rely on a yet-to-be published study from Madison, Wisconsin that alleged shows that comparable houses sold without a Realtor “typically fetched about the same price as the homes sold by Realtors.”

The authors fail to note that one of the things that Realtors are paid for – to many people it is the most important of their services – is facilitating the transaction as it proceeds to closing. I suspect that no comparable service are provided by pimps. But than again, how would I know?

Additionally, the authors note that a special value is provided to those prostitutes who work with pimps: they are less likely to be arrested. But the authors fail to note a comparable benefit provided by Realtors. That is, both as a result of their expertise and of the fact that they (mostly) carry Errors and Omissions (E&O) Insurance, the clients of Realtors stand a better chance of being shielded from a lawsuit. This is not trivial. The pimp’s connections (and payoffs) may save the prostitute some hassle and the possibility of a fine in the hundreds of dollars. But that is nothing like having a Realtor’s E&O Insurance provide the “deep pockets” and/or a legal defense that can shield a seller from potentially hundreds of thousands of dollars in damages.

Superfreakonomics is a fun and interesting book to read, even though they compare Realtors to pimps.

File Under: Looking for a pimp real estate agent to satisfy your real estate needs, call me.

Other interesting reads: John Perkins, Confessions of an Economic Hit Man and Hoodwinked.

Author Profile

John Ford
John Ford
EXPERIENCE

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs



In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.



HISTORY

For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.

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Contact
John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.




John Ford
Ford Realty Inc
137 Charles Street
Boston, Ma 02114

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