Are Brokers' Commission Rates on Home Sales Too High? A Conceptual Analysis
AbstractMany people in North America believe that prevailing commission rates for residential real estate brokers are too high, even though such beliefs are not based on a formal model. This paper presents a general equilibrium model of the housing market in which real estate brokers serve as matching intermediaries. We use this model to construct an illustrative example which is calibrated using data consistent with a typical housing market. The example suggests that the commission rate which maximizes aggregate efficiency is considerably below the prevailing rate. Moreover, this finding appears to be robust to changes in the matching process. Copyright American Real Estate and Urban Economics Association.
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Bibliographic InfoPaper provided by Universite Aix-Marseille III in its series G.R.E.Q.A.M. with number 95a21.
Length: 29 pages
Date of creation: 1995
Date of revision:
Contact details of provider:
Postal: G.R.E.Q.A.M., (GROUPE DE RECHERCHE EN ECONOMIE QUANTITATIVE D'AIX MARSEILLE), CENTRE DE VIEILLE CHARITE, 2 RUE DE LA CHARITE, 13002 MARSEILLE.
Web page: http://www.greqam.fr/
More information through EDIRC
REAL ESTATE; HOUSING;
Other versions of this item:
- Paul Anglin & Richard Arnott, 1999. "Are Brokers' Commission Rates on Home Sales Too High? A Conceptual Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(4), pages 719-749.
- Richard Arnott & Paul Anglin, 1995. "Are Brokers' Commission Rates on Home Sales Too High? A Conceptual Analysis," Boston College Working Papers in Economics 302., Boston College Department of Economics.
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
- H0 - Public Economics - - General
- D0 - Microeconomics - - General
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