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: | , , |
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| Format: | Article |
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American Economic Association
2018
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| Online Access: | http://hdl.handle.net/1721.1/114048 https://orcid.org/0000-0001-8621-3864 |
| _version_ | 1826188410536067072 |
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| author | Barwick, Panle Jia Wong, Maisy Pathak, Parag |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Barwick, Panle Jia Wong, Maisy Pathak, Parag |
| author_sort | Barwick, Panle Jia |
| collection | MIT |
| description | 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. |
| first_indexed | 2024-09-23T07:59:13Z |
| format | Article |
| id | mit-1721.1/114048 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T07:59:13Z |
| publishDate | 2018 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/1140482022-09-30T01:31:39Z Conflicts of Interest and Steering in Residential Brokerage Barwick, Panle Jia Wong, Maisy Pathak, Parag Massachusetts Institute of Technology. Department of Economics Pathak, Parag 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) 2018-03-09T23:56:08Z 2018-03-09T23:56:08Z 2017-07 2018-02-26T20:33:17Z Article http://purl.org/eprint/type/JournalArticle 1945-7782 1945-7790 http://hdl.handle.net/1721.1/114048 Barwick, Panle Jia, Parag A. Pathak, and Maisy Wong. “Conflicts of Interest and Steering in Residential Brokerage.” American Economic Journal: Applied Economics 9, no. 3 (July 2017): 191–222. © 2017 American Economic Association https://orcid.org/0000-0001-8621-3864 http://dx.doi.org/10.1257/APP.20160214 American Economic Journal: Applied Economics Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Barwick, Panle Jia Wong, Maisy Pathak, Parag Conflicts of Interest and Steering in Residential Brokerage |
| title | Conflicts of Interest and Steering in Residential Brokerage |
| title_full | Conflicts of Interest and Steering in Residential Brokerage |
| title_fullStr | Conflicts of Interest and Steering in Residential Brokerage |
| title_full_unstemmed | Conflicts of Interest and Steering in Residential Brokerage |
| title_short | Conflicts of Interest and Steering in Residential Brokerage |
| title_sort | conflicts of interest and steering in residential brokerage |
| url | http://hdl.handle.net/1721.1/114048 https://orcid.org/0000-0001-8621-3864 |
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