Real-Estate Agent Commission Structure and Sales Performance
46 Pages Posted: 16 Jan 2018
Date Written: January 2018
Do higher real-estate agent fees imply better performance? This study uses a nation-wide data set of residential real-estate transactions in the Netherlands from 1985 to 2011 to provide evidence against this. Brokers with a flat fee structure who charge an up-front fee (which is substantially lower than the average fee of traditional brokers) and leave the viewings to the seller sell faster and at -on average- 2.7 percent higher prices. We correct for fixed house- and time effects. We provide additional evidence that sellers who chose for a flat fee broker were the ones who benefitted most from them.
Keywords: agency, broker incentives, Housing, real-estate brokers
JEL Classification: D80, L10, L80, R20, R30
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