The Relative Performance of Real Estate Marketing Platforms: Mls Versus Fsbomadison.Com

38 Pages Posted: 10 Sep 2007  

Igal Hendel

Northwestern University - Department of Economics; National Bureau of Economic Research (NBER)

Aviv Nevo

Northwestern University - Department of Economics; National Bureau of Economic Research (NBER)

François Ortalo-Magné

Wisconsin School of Business; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: September 2007

Abstract

We compare outcomes obtained by sellers who listed their home on a newly developed For-Sale-By-Owner (FSBO) web site versus those who used an agent and the Multiple Listing Service (MLS). We do not find support for the hypothesis that listing on the MLS helps sellers obtain a significantly higher sale price. Listing on the MLS shortens the time it takes to sell a house. The diffusion of the new FSBO platform was quick, with the market share stabilizing after 2 years, suggesting it managed to gain a critical mass necessary to compete with the MLS. However, the lower effectiveness of FSBO (in terms of time to sell and probability of a sale) suggests that the increasing returns to network size are not fully exploited at its current size. We discuss the welfare implications of our findings.

Suggested Citation

Hendel, Igal and Nevo, Aviv and Ortalo-Magné, François, The Relative Performance of Real Estate Marketing Platforms: Mls Versus Fsbomadison.Com (September 2007). NBER Working Paper No. w13360. Available at SSRN: https://ssrn.com/abstract=1012814

Igal E. Hendel (Contact Author)

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Aviv Nevo

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Francois Ortalo-Magne

Wisconsin School of Business ( email )

4300 Grainger Hall
975 University Avenue
Madison, WI 53706-1323
United States
608-262-7867 (Phone)
608-262-7867 (Fax)

HOME PAGE: http://francois.marginalq.com

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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