A Note on Buyer's Agent Commission and Sale Price

Joachim Zietz and Bobby Newsome

Journal of Real Estate Research, 2001, vol. 21, issue 3, 245-254

Abstract: The article examines whether and to what extent the level of a buyer's agent commission will affect the sale price of a house. The estimation results suggest that a higher commission rate leads to a higher sale price, although only for lower-priced houses. It is suggested that, at least for this market segment, there may be a principal-agent problem: buyer's agents do not act in the best interest of their clients because of the institutional structure of sales commissions.

Date: 2001
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DOI: 10.1080/10835547.2001.12091053

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