Real-Estate Agent Commission Structure and Sales Performance

46 Pages Posted: 16 Jan 2018

See all articles by Pieter A. Gautier

Pieter A. Gautier

Free University of Amsterdam; Tinbergen Institute Amsterdam (TIA); IZA Institute of Labor Economics

Arjen Siegmann

VU University Amsterdam

Aico van Vuuren

Department of Economics, Gothenburg University

Multiple version iconThere are 3 versions of this paper

Date Written: January 2018

Abstract

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

Suggested Citation

Gautier, Pieter A. and Siegmann, Arjen and van Vuuren, Aico, Real-Estate Agent Commission Structure and Sales Performance (January 2018). CEPR Discussion Paper No. DP12587. Available at SSRN: https://ssrn.com/abstract=3102225

Pieter A. Gautier (Contact Author)

Free University of Amsterdam ( email )

Amsterdam, ND North Holland
Netherlands

Tinbergen Institute Amsterdam (TIA) ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Arjen Siegmann

VU University Amsterdam ( email )

De Boelelaan 1105
Dept. of Finance
Amsterdam, NOT IN US OR CANADA 1081 HV
Netherlands
+31205986581 (Phone)

HOME PAGE: http://personal.vu.nl/a.h.siegmann

Aico Van Vuuren

Department of Economics, Gothenburg University ( email )

Sweden

HOME PAGE: http://https://sites.google.com/site/aicovanvuurenshomepage/

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