NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

How Much Value Do Real Estate Brokers Add? A Case Study

B. Douglas Bernheim, Jonathan Meer

NBER Working Paper No. 13796*
Issued in February 2008
NBER Program(s):   PE

Sales commissions for residential real estate brokers historically average nearly six percent of a home's closing price. Do brokers add sufficient value to justify those commissions? We address this question using a unique data set pertaining to sales of faculty and staff homes on the Stanford University campus. We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices. However, those who use brokers sell their houses more quickly.

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