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What added value do Estate Agents offer compared to FSBO transaction? Explanation from a perceived advantages model

Author

Listed:
  • Fabrice Larceneux

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Thomas Lefebvre

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Arnaud Simon

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper aims at explaining the determinants of using an estate agent vs. conducting a private sale on the French housing market. From a survey that collected 4,142 responses relating to effective completed transactions, the results show that the decision of whether to use an estate agent is not explained by the physical or spatial features of the property or socio-demographic variables. But by buyers' and sellers' heterogeneous perceptions of whether it is worthwhile to use estate agents, of how far they feel themselves having market expertise, and their wish to complete quickly. Five perceived transaction costs explain why buyers and sellers use brokerage intermediation, in a consumer's standpoint.

Suggested Citation

  • Fabrice Larceneux & Thomas Lefebvre & Arnaud Simon, 2015. "What added value do Estate Agents offer compared to FSBO transaction? Explanation from a perceived advantages model," Post-Print hal-01635048, HAL.
    • Handle: RePEc:hal:journl:hal-01635048
    DOI: 10.1016/j.jhe.2015.06.002
    Note: View the original document on HAL open archive server: https://hal.science/hal-01635048
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    References listed on IDEAS

    as
    1. Vickie L. Bajtelsmit & Elaine Worzala, 1997. "Adversarial Brokerage in Residential Real Estate Transactions: The Impact of Separate Buyer Representation," Journal of Real Estate Research, American Real Estate Society, vol. 14(1), pages 65-76.
    2. Steven D. Levitt & Chad Syverson, 2008. "Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate Transactions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 599-611, November.
    3. B. Douglas Bernheim & Jonathan Meer, 2013. "Do Real Estate Brokers Add Value When Listing Services Are Unbundled?," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1166-1182, April.
    4. Edward A. Baryla & Leonard V. Zumpano, 1995. "Buyer Search Duration in the Residential Real Estate Market: The Role of the Real Estate Agent," Journal of Real Estate Research, American Real Estate Society, vol. 10(1), pages 1-14.
    5. 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.
    6. 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, March.
    7. J.R. McDaniel & Marc A. Louargand, 1994. "Real Estate Brokerage Service Quality: An Examination," Journal of Real Estate Research, American Real Estate Society, vol. 9(3), pages 339-352.
    8. Williamson, Oliver E, 1981. "The Modern Corporation: Origins, Evolution, Attributes," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1537-1568, December.
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    Cited by:

    1. Fabrice Larceneux & Thomas Lefebvre, 2016. "The " Bad Deal " Illusion," Post-Print halshs-01671084, HAL.
    2. Fabrice Larceneux & Denis Guiot, 2019. "The role of services in homebuyers’ attitudes: A field experiment in the French off-plan housing market," Urban Studies, Urban Studies Journal Limited, vol. 56(14), pages 2880-2896, November.

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