Expertise Value Added in the Real Estate Market

28 Pages Posted: 28 Oct 2014 Last revised: 14 Nov 2015

See all articles by Sebastien Gay

Sebastien Gay

The University of Chicago

Allen Zhang

University of Chicago - Booth School of Business

Date Written: December 30, 2014

Abstract

We consider the effect of expertise on economic transactions, with a particular focus on the real estate market. We show that even as listing information becomes increasingly accessible on real estate aggregation websites, realtor expertise remains important in securing a desirable sale price. One main channel for the effects of such expertise is improving information dissemination to potential buyers through higher quality listings. Using listing photos and remarks as measures of quality, we find that realtor activity is correlated with significantly higher quality listings. We then measure the price impact of these measures of quality and find that, even after controlling for a large spectrum of house characteristics, listing quality is correlated with higher sale prices.

Keywords: expertise, transaction, real estate, specialization, value

JEL Classification: D8, L1, L8, R2, R3

Suggested Citation

Gay, Sebastien and Zhang, Allen, Expertise Value Added in the Real Estate Market (December 30, 2014). Kreisman Working Papers Series in Housing Law and Policy No. 20. Available at SSRN: https://ssrn.com/abstract=2515157 or http://dx.doi.org/10.2139/ssrn.2515157

Sebastien Gay (Contact Author)

The University of Chicago ( email )

Department of Economics
1126 East 59th Street
Chicago, IL 60637
United States
773-834-0887 (Phone)

HOME PAGE: http://www.sebastiengay.com

Allen Zhang

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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