Conflicts of Interest and Steering in Residential Brokerage
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app.20160214.pdf
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656.18 KB
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Author(s)
Barwick, Panle Jia
Wong, Maisy
Pathak, Parag
Date Issued
July 2017
Journal
American Economic Journal: Applied Economics
Publisher
American Economic Association
Citation
Barwick, Panle Jia, Parag A. Pathak, and Maisy Wong. “Conflicts of Interest and Steering in Residential Brokerage.” American Economic Journal: Applied Economics 9, no. 3 (July 2017): 191–222. © 2017 American Economic Association
Version
Final published version
Abstract
This paper documents uniformity in real estate commission rates offered to buyers' agents using 653,475 residential listings in eastern Massachusetts from 1998–2011. Properties listed with lower commission rates experience less favorable transaction outcomes: they are 5 percent less likely to sell and take 12 percent longer to sell. These adverse outcomes reflect decreased willingness of buyers' agents to intermediate low commission properties (steering), rather than heterogeneous seller preferences or reduced effort of listing agents. Offices with large market shares purchase a disproportionately small fraction of low commission properties. The negative outcomes for low commissions provide empirical support for regulatory concerns over steering.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/APP.20160214
