Friday, July 22, 2011

Real estate agents as middlemen

A new NBER paper examines real estate agents in Boston:
The Costs of Free Entry: An Empirical Study of Real Estate Agents in Greater Boston,
by Panle Jia Barwick and Parag A. Pathak

Abstract: This paper studies the real estate brokerage industry in Greater Boston, an industry with low entry barriers and substantial turnover. Using a comprehensive dataset of agents and transactions from 1998-2007, we find that entry does not increase sales probabilities or reduce the time it takes for properties to sell, decreases the market share of experienced agents, and leads to a reduction in average service quality. These empirical patterns motivate an econometric model of the dynamic optimizing behavior of agents that serves as the foundation for simulating counterfactual market structures. A one-half reduction in the commission rate leads to a 73% increase in the number of houses each agent sells and benefits consumers by about $2 billion. House price appreciation in the first half of the 2000s accounts for 24% of overall entry and a 31% decline in the number of houses sold by each agent. Low cost programs that provide information about past agent performance have the potential to increase overall productivity and generate significant social savings.

6 comments:

Sell Your Own Home said...

Hi,

Real estate agents are brokers or middlemen who give aid in the buying and selling of real estates. They look for buyers who want to buy a property or properties or seller who want to sell a property or properties. Their services can be rendered by both buyers and sellers. They make buying and selling of properties seem easy. Thanks a lot.

Hong Kong Rental Accommodation said...

You are truly well-informed. I cant believe how much of this I just wasnt aware of Hong Kong Real Estate Agents. Thank you for bringing more information to this topic for me. I am truly grateful and really impressed.
Thank!!

koh samui real estate said...

Selling or buying property is not an easy task. The real estate agents are very helpful for managing all your property issues as they know very well about the real estate.

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ascencion rana said...

An interesting discussion is worth comment. I think that you should write more on this topic, it might not be a taboo subject but generally people are not enough to speak on such topics. To the next. Cheers.


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Koh Samui real estate said...

Well, buying or selling any type of property is not so easy as looks. The middleman or any real estate agents are helpful for getting it with proper management. Now Koh Samui real estate is also wonderful option for making your precious investments for good profit.

sellmyhouseinaz said...

Hire the real estate agents is the best idea or solution for people who are looking to get the best deal of buying and selling of real estate properties.

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