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Heterogeneous Real Estate Agents and the Housing Cycle

Author

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  • Sonia Gilbukh
  • Paul Goldsmith-Pinkham

Abstract

The real estate market is highly intermediated, with 90% of buyers and sellers hiring an agent. However, low barriers to entry and fixed commission rates result in large market share for inexperienced intermediaries. Using micro-level data on 8.5 million listings and a novel research design, we show that house listings by inexperienced agents have a lower probability of selling, and this effect is strongest during the housing bust. We estimate that 3.7% more listings would have been sold in a flexible commission equilibrium. Eighty percent of this improvement comes from competition and the remainder from commission variation across experience.

Suggested Citation

  • Sonia Gilbukh & Paul Goldsmith-Pinkham, 2024. "Heterogeneous Real Estate Agents and the Housing Cycle," The Review of Financial Studies, Society for Financial Studies, vol. 37(11), pages 3431-3489.
    • Handle: RePEc:oup:rfinst:v:37:y:2024:i:11:p:3431-3489.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhae048
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    Cited by:

    1. Hong Lee & Joseph R. Mason, 2025. "Appraisal quality and loan characteristics: evidence from Newcomb–Benford Law," Empirical Economics, Springer, vol. 69(6), pages 3721-3758, December.
    2. Natalya Bikmetova & Geoffrey K. Turnbull & Velma Zahirovic‐Herbert, 2023. "Ethnicity in housing markets: Buyers, sellers and agents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(1), pages 196-232, January.
    3. Sumit Agarwal & John Grigsby & Ali Hortaçsu & Gregor Matvos & Amit Seru & Vincent Yao, 2024. "Searching for Approval," Econometrica, Econometric Society, vol. 92(4), pages 1195-1231, July.
    4. Guoying Deng & Xuyuan Zhang, 2024. "Digital Platform Consolidation and Offline Expansion: Strategic Convergence and Market Welfare in China's Second-hand Real Estate Market," Papers 2409.04326, arXiv.org, revised Apr 2025.
    5. William N Goetzmann & Christophe Spaenjers & Stijn Van Nieuwerburgh, 2021. "Real and Private-Value Assets [Gendered prices]," The Review of Financial Studies, Society for Financial Studies, vol. 34(8), pages 3497-3526.
    6. Elisa Guglielminetti & Michele Loberto, 2025. "Inflation expectations and price-setting decisions: insights from the housing market," Temi di discussione (Economic working papers) 1507, Bank of Italy, Economic Research and International Relations Area.
    7. Xiangou Deng & Zhaohui Li & Michael J. Seiler & Hua Sun, 2024. "Market Strength and Brokerage Choice in Residential Housing," The Journal of Real Estate Finance and Economics, Springer, vol. 69(4), pages 741-777, November.

    More about this item

    Keywords

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    JEL classification:

    • G5 - Financial Economics - - Household Finance
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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