Conflicts of Interest and Steering in Residential Brokerage
This paper documents uniformity in real estate commission rates offered to buyers' agents using 653,475 residential listings in eastern Massachusetts from 1998-2011. Properties listed with lower commission rates experience less favorable transaction outcomes: they are 5 percent less likely to s...
| Main Authors: | , , |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
American Economic Association,
2018-03-09T23:56:08Z.
|
| Subjects: | |
| Online Access: | Get fulltext |
| Summary: | This paper documents uniformity in real estate commission rates offered to buyers' agents using 653,475 residential listings in eastern Massachusetts from 1998-2011. Properties listed with lower commission rates experience less favorable transaction outcomes: they are 5 percent less likely to sell and take 12 percent longer to sell. These adverse outcomes reflect decreased willingness of buyers' agents to intermediate low commission properties (steering), rather than heterogeneous seller preferences or reduced effort of listing agents. Offices with large market shares purchase a disproportionately small fraction of low commission properties. The negative outcomes for low commissions provide empirical support for regulatory concerns over steering. Samuel Zell and Robert Lurie Real Estate Center National Science Foundation (U.S.) (grant SES-1061970) |
|---|