Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 692: Real-Estate Agent Commission Structure and Sales Performance

Pieter Gautier , Arjen Siegmann and Aico van Vuuren ()
Additional contact information
Pieter Gautier: Vrije Universiteit Amsterdam
Arjen Siegmann: Vrije Universiteit Amsterdam
Aico van Vuuren: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 GÖTEBORG, Sweden

Abstract: Do higher real-estate agent fees imply better performance? This study uses a nation-wide dataset 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-codes: D80; L10; L80; R20; R30

33 pages, February 2017

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