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Removing Conflict of Interest for Agents of Homebuyers

Author

Listed:
  • Borys Grochulski
  • Zhu Wang

Abstract

In real estate transactions, sellers' agents have weak incentives to market homes sufficiently long to secure top prices for their clients. Buyers' agents, however, face completely backward incentives: They get paid more when their clients pay more for their homes. We discuss an a la carte compensation model for buyers' agents that eliminates this conflict of interest.

Suggested Citation

  • Borys Grochulski & Zhu Wang, 2023. "Removing Conflict of Interest for Agents of Homebuyers," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, vol. 23(34), October.
    • Handle: RePEc:fip:fedreb:97097
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    File URL: https://www.richmondfed.org/publications/research/economic_brief/2023/eb_23-34
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