Residential Brokerage in Hot and Cold Markets
Posted: 29 May 2015
Date Written: May 27, 2015
Using a search-theoretical framework, we study how a home seller's choice of whether or not to use a broker depends on different market conditions. We analyze the role that the broker plays in the house-selling process by examining the expected time-to-transaction, the expected transaction price, and the value of the transaction. We show that a broker brings less value to the seller in hot markets than in cold markets.
Keywords: Residential brokerage; FSBO; Market tightness
JEL Classification: D85, L85, R32
Suggested Citation: Suggested Citation