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A Note on Buyer's Agent Commision and Sales Price

Author: Joachim Zietz, Bobby Newsome

Start Page: 245
End Page: 254
Volume: 21
Issue Number: 3
Year: 2001
Publication: Journal of Real Estate Research

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.

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