Conflicts of Interest and Steering in Residential Brokerage†

Conflicts of Interest and Steering in Residential Brokerage† AbstractThis 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. (JEL D82, L85, R21, R31) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Applied Economics American Economic Association

Conflicts of Interest and Steering in Residential Brokerage†

Preview Only
32 pages

Loading next page...
 
/lp/aea/conflicts-of-interest-and-steering-in-residential-brokerage-sSF0xQyxqa
Publisher
American Economic Association
Copyright
Copyright © 2017 © American Economic Association
ISSN
1945-7790
D.O.I.
10.1257/app.20160214
Publisher site
See Article on Publisher Site

Abstract

AbstractThis 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. (JEL D82, L85, R21, R31)

Journal

American Economic Journal: Applied EconomicsAmerican Economic Association

Published: Jul 1, 2017

There are no references for this article.

Sorry, we don’t have permission to share this article on DeepDyve,
but here are related articles that you can start reading right now:

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches

$49/month

Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.

$588

$360/year

billed annually
Start Free Trial

14-day Free Trial