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

B. Douglas Bernheim () and Jonathan Meer

No 13796, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: D14 R21 R31 (search for similar items in EconPapers)
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Date: Written
Note: PE
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