Restructuring Agency Relationships in the Real Estate Brokerage Industry: An Economic Analysis
Recent state legislative reforms of real estate agency relationships suggest that traditional agency law and practice are not meeting the needs of the parties involved in a residential real estate purchase and sales transaction. In this article, we argue that this is due, at least in part, to the bundling of information and representation services provided by brokers. This bundling results in a tradeoff between the benefits of buyers and sellers in sharing information prior to a match, and the cost to the parties individually of revealing information during bargaining. We conclude that, from an economic perspective, effective agency reform must solve this basic conflict, perhaps by unbundling the matching and representation functions.
Volume (Year): 20 (2000)
Issue (Month): 1 ()
|Contact details of provider:|| Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323|
Web page: http://www.aresnet.org/
|Order Information:|| Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323|
Web: http://pages.jh.edu/jrer/about/get.htm Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Abdullah Yavas & Thomas J. Miceli & C.F. Sirmans, 2001. "An Experimental Analysis of the Impact of Intermediaries on the Outcome of Bargaining Games," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 29(2), pages 251-276.
- G. Donald Jud & James Frew, 1986. "Real Estate Brokers, Housing Prices, and the Demand for Housing," Urban Studies, Urban Studies Journal Limited, vol. 23(1), pages 21-31, February.
- Anglin, Paul M & Arnott, Richard, 1991. "Residential Real Estate Brokerage as a Principal-Agent Problem," The Journal of Real Estate Finance and Economics, Springer, vol. 4(2), pages 99-125, June.
- Salant, Stephen W, 1991. "For Sale by Owner: When to Use a Broker and How to Price the House," The Journal of Real Estate Finance and Economics, Springer, vol. 4(2), pages 157-73, June.
- Gene A. Marsh & Leonard V. Zumpano, 1988. "Agency Theory and the Changing Role of the Real Estate Broker: Conflicts and Possible Solutions," Journal of Real Estate Research, American Real Estate Society, vol. 3(2), pages 151-164.
- Michael A. Arnold, 1992. "The Principal-Agent Relationship in Real Estate Brokerage Services," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(1), pages 89-106.
- Thomas J. Miceli, 1988. "Information Costs and the Organization of the Real Estate Brokerage Industry in the U.S. and Great Britain," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 16(2), pages 173-188.
When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:20:n:1:2000:p:31-47. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (JRER Graduate Assistant/Webmaster)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.