The Beatles once posed the question, "How does it feel to be one of the beautiful people?" If you are a real estate agent, the answer might be, "Very good, indeed."
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A new study finds that, on average, attractive real estate agents sell homes at prices $15,622 higher than those of their less attractive peers. Therefore, assuming a 6% commission, good-looking agents earn a nearly $950 premium on each home they sell.
However, average-looking agents tend to earn more overall than their attractive counterparts.
What's behind the apparent contradiction? Study co-author Frank Mixon -- visiting professor of economics, accounting and finance at Columbus State University in Columbus, Ga. -- explains in the following interview.
In your study, you measured how the physical attractiveness of a real estate agent affects the listing price of a home for sale. In a nutshell, could you explain your findings?
We found that, on average, attractive agents list houses at $20,275 above the prices listed by average-looking agents, other things equal.
Also, we found that, on average, attractive agents generate sales prices that are $15,622 higher than the sales prices generated by average-looking agents, other things equal.
Could you please give a small synopsis of the methodology used in your study?
To do the study, we downloaded website (photos) of more than 100 real estate agents in a metropolitan area in the U.S. South. Based on their photos, these real estate agents were rated based on their attractiveness, on a scale of 1 to 10 -- with 10 being the most attractive -- by more than 400 raters.
The average attractiveness scores for each agent were combined with (multiple listing service) data over a seven-year period. (The agents were anonymously presented, and the raters resided in another state.) The MLS data contained all sorts of information on each particular house, such as number of bedrooms, number of baths, etc. From there, we obtained results like those listed above.
Is it correct to assume if an agent is good-looking, it helps him or her sell more properties than an average-looking agent?
We found that attractive agents tended to sell fewer homes over a seven-year period than average-looking agents.
Given that attractive agents sell homes for $15,622 more than average-looking agents means that, assuming 6% commission on sales, attractive agents earn almost $950 more on each house they sell. This means that attractive agents don't have to sell as many homes as average-looking agents in order to earn the same income.
Even so, data over seven years indicated that average-looking agents earned greater incomes than attractive agents because the difference in number of houses sold (favoring average-looking agents) outpaced the difference in commission per home sold (favoring attractive agents).
Do the attractive agents sell their listings more quickly than the other agents?
Interestingly, homes managed by attractive agents sit on the market about two weeks longer than those handled by average-looking agents.
Was there anything in the study that surprised you?
The results of the study weren't surprising in that there is a lot of research indicating that attractiveness plays a big role in the workplace.
Studies have shown that advertising firms headed by attractive executives generate greater revenue than those headed by average-looking executives. In higher education, it has been found that attractive professors get higher student evaluations of teaching than average-looking or unattractive professors.
Studies have also shown that, in general, attractive workers earn wages that are 1% to 13% higher than average-looking workers' wages, while the wages of unattractive workers sit 1% to 15% below those of average-looking members of the workforce.
Given the study, should homebuyers be more cautious of real estate agents who are attractive?
While homebuyers should do their homework in dealing with any agent, some buyers prefer to work with attractive agents. The big-ticket nature of a home purchase calls for due diligence (for example, research, adequate search, etc.) on the buyer's part, regardless of who the agent may be.