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The Relative Performance of Real Estate Marketing Platforms: MLS versus FSBOMadison.com

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  • Igal Hendel
  • Aviv Nevo
  • François Ortalo-Magné

Abstract

We compare house sales on a For-Sale-By-Owner (FSBO) platform to Multiple Listing Service (MLS) sales and find that FSBO precommission prices are no lower, but that FSBO is less effective in terms of time to sell and probability of a sale. We do not find direct evidence of the importance of network size as a reason for the lower effectiveness of FSBO. We do find evidence of endogenous platform differentiation: patient sellers use FSBO while patient buyers transact more often on the MLS (where they avoid patient sellers). We discuss the implications for platform competition, two-sided markets, and welfare. (JEL L85, M31, R31)

Suggested Citation

  • Igal Hendel & Aviv Nevo & François Ortalo-Magné, 2009. "The Relative Performance of Real Estate Marketing Platforms: MLS versus FSBOMadison.com," American Economic Review, American Economic Association, vol. 99(5), pages 1878-1898, December.
  • Handle: RePEc:aea:aecrev:v:99:y:2009:i:5:p:1878-98
    Note: DOI: 10.1257/aer.99.5.1878
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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