How Much do Real Estate Brokers Add? A Case Study

B. Douglas Bernheim and Jonathan Meer

No 06-041, Discussion Papers from Stanford Institute for Economic Policy Research

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.

Keywords: real estate broker; comission; home sales; home price (search for similar items in EconPapers)
JEL-codes: D14 D19 (search for similar items in EconPapers)
Date: 2007-08
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Citations: View citations in EconPapers (14)

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