Download This PaperAsymmetric Information and Personal Affiliations in Brokered Housing Transactions
Lopez, Luis Arturo, "Asymmetric information and personal affiliations in brokered housing transactions," Real Estate Economics, 2021, 49(2), pp. 459-492. https://doi.org/10.1111/1540-6229.12325
61 Pages Posted: 17 Oct 2019 Last revised: 31 Aug 2021
Date Written: October 4, 2019
Abstract
This research provides evidence on the role of information asymmetry and personal affiliations in housing transactions using a novel dataset that allows observation of detailed information about the property, broker, and seller. Sellers holding a real estate license are found to obtain about 1.6 percent (or $3,200) more for their properties than unlicensed sellers, and sellers personally affiliated to a real estate licensee (e.g., spouses, siblings, parents) also obtain a premium of about the same size, all else equal. There is evidence from appraisal training that knowledge of property valuation further increases the price disparities, while informative public property records reduce price disparities. Agents and personal affiliates appear to use information advantages to time the market and capture capital gains. These new findings provide insights into the behaviors of market participants in asymmetric information environments.
Keywords: Asymmetric Information, Personal Affiliations, Brokerage
JEL Classification: R2
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