Real-Estate Agent Commission Structure and Sales Performance
TI 2017-049/VI, Tinbergen Institute Discussion Paper
39 Pages Posted: 1 Jun 2017
Date Written: May 31, 2017
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 the price difference is not due to a seller-selection effect.
Keywords: real-estate brokers, broker incentives, housing, agency
JEL Classification: D80, L10, L80, R20, R30
Suggested Citation: Suggested Citation