Is Dual Agency in Real Estate a Cause for Concern?

Posted: 4 Dec 2013

See all articles by Vrinda Kadiyali

Vrinda Kadiyali

Cornell University - Samuel Curtis Johnson Graduate School of Management

Jeffrey Prince

Kelley School of Business, Indiana University

Multiple version iconThere are 2 versions of this paper

Date Written: December 3, 2013

Abstract

We examine the effects of the regulation of dual agency in residential real estate transactions, for 10,888 transactions in Long Island, New York in 2004-2007. We find that dual agency has an overall null effect on sale price, but includes two opposing forces where buyer and seller interests might be compromised. The link between dual agency and timing of sales is less clear. These findings are robust to endogeneity bias. Although it appears dual agency does cause some market distortions, our analysis yields little evidence that prohibiting dual agency in real estate will increase welfare.

Keywords: Conflict of interest; Real estate; Strategic pricing; Leaning on the seller; Time-to-sale

Suggested Citation

Kadiyali, Vrinda and Prince, Jeffrey, Is Dual Agency in Real Estate a Cause for Concern? (December 3, 2013). Journal of Real Estate Finance and Economics, Vol. 48, No. 1, 2014, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2362975

Vrinda Kadiyali

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States
607-255-1985 (Phone)
607-254-4590 (Fax)

Jeffrey Prince (Contact Author)

Kelley School of Business, Indiana University ( email )

1309 E. Tenth Street
Kelley School of Business
Bloomington, IN 47405
United States
8128562692 (Phone)
47405 (Fax)

HOME PAGE: http://https://kelley.iu.edu/jeffprin/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
489
PlumX Metrics