NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Maisy Wong

Real Estate Department
The Wharton School
University of Pennsylvania
1464 Steinberg-Dietrich Hall
3620 Locust Walk
Philadelphia PA 19104-6302
Tel: 6172306235

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NBER Working Papers and Publications

August 2015Conflicts of Interest and the Realtor Commission Puzzle
with Panle Jia Barwick, Parag A. Pathak: w21489
This paper documents uniformity in real estate commission rates across markets and time using a dataset on realtor commissions for 653,475 residential listings in eastern Massachusetts from 1998-2011. Newly established real estate brokerage offices charging low commissions grow more slowly than comparable entrants with higher commissions. Properties listed with lower commission rates experience less favorable transaction outcomes: they are 5% less likely to sell and take 12% longer to sell. These adverse outcomes reflect decreased willingness of buyers' agents to intermediate low commission properties (steering) rather than heterogeneous seller preferences or reduced effort of listing agents. While all agents and offices prefer properties with high commissions, firms and agents with large ...
 
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