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

Creator(s)

Leonard V. Zumpano, The University of Alabama
Harold W. Elder, The University of Alabama
Edward A. Baryla, East Tennessee State University

Document Type

Article

Publication Date

1-1-1996

Description

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 a 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.

Citation Information

Zumpano, Leonard V.; Elder, Harold W.; and Baryla, Edward A.. 1996. Buying a House and the Decision to Use a Real Estate Broker. Journal of Real Estate Finance and Economics. Vol.13(2). 169-181. https://doi.org/10.1007/BF00154054 ISSN: 0895-5638