A Note on Buyer's Agent Commision and Sales Price
The article examines whether and to what extent the level of a buyerâ€™s agent commission will affect the sale price of a house. The estimation results suggest that a higher commission rate leads to a higher sale price, although only for lower-priced houses. It is suggested that, at least for this market segment, there may be a principal-agent problem: buyerâ€™s agents do not act in the best interest of their clients because of the institutional structure of sales commissions.
Volume (Year): 21 (2001)
Issue (Month): 3 ()
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References listed on IDEAS
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- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
- G. Donald Jud, 1983. "Real Estate Brokers and the Market for Residential Housing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 11(1), pages 69-82.
- Alastair Hall, 1987. "The Information Matrix Test for the Linear Model," Review of Economic Studies, Oxford University Press, vol. 54(2), pages 257-263.
- Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-94, September.
- Elder, Harold W & Zumpano, Leonard V & Baryla, Edward A, 1999. "Buyer Search Intensity and the Role of the Residential Real Estate Broker," The Journal of Real Estate Finance and Economics, Springer, vol. 18(3), pages 351-68, May.
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