Buying a House and the Decision to Use a Real Estate Broker

Leonard V Zumpano, Harold W Elder and Edward A Baryla

The Journal of Real Estate Finance and Economics, 1996, vol. 13, issue 2, 169-81

Abstract: This study examines the factors that affect the decision by home buyers to use real estate brokers and the subsequent effect this decision has on home prices. Buyers with high opportunity costs and the least amount of information about local market conditions are the most likely to use brokers; a finding consistent with the role of the real estate broker as market intermediary. Not surprisingly, these were some of the same factors that also have a positive impact on selling price. An important finding of this study is that when selection bias is adequately controlled, the real estate broker has no appreciable, independent impact on selling price. This, in turn, suggests a nonsegmented, highly competitive housing market. Copyright 1996 by Kluwer Academic Publishers

Date: 1996
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The Journal of Real Estate Finance and Economics is currently edited by Steven R. Grenadier, James B. Kau and C.F. Sirmans

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