Economics Department

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TITLE:
Are Brokers' Commission Rates on Home Sales Too High? A Conceptual Analysis

AUTHOR(S):
Richard Arnott, Boston College
Paul Anglin, University of Windsor

DOCUMENT TYPE: Article

ABSTRACT:
Many people believe that prevailing commission rates for residential real estate brokers are "too high" but do not offer a formal model. This paper presents a general equilibrium model of the housing market in which real estate brokers serve as matching intermediaries. We use this model to construct an illustrative example which is "calibrated" using data representative of a typical housing market.