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Discussion Paper Details

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Title: Real-Estate Agent Commission Structure and Sales Performance

Author(s): Pieter A. Gautier, Arjen Siegmann and Aico van Vuuren

Publication Date: January 2018

Keyword(s): agency, broker incentives, Housing and real-estate brokers

Programme Area(s): Financial Economics, Industrial Organization and Labour Economics

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.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12587

Bibliographic Reference

Gautier, P, Siegmann, A and van Vuuren, A. 2018. 'Real-Estate Agent Commission Structure and Sales Performance'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12587