Real Estate Brokers: Do they Infl ate Housing Prices?

This study examines the impact of real estate brokers on the price of residential properties sold in 2007 in twelve French cities. The results indicate that brokers modify the prices of properties they sell, even though they appear to have heterogeneous behaviors across cities. Using sociological characteristics of the buyer and the seller, our objective is to disentangle the pure effects of these features from the cross-effects due to the broker’s interaction with the various sub-populations. The price impact of brokers also varies by the property size and the socio-occupational categories of the buyer. We also find that the age, the localization, and the construction period are the main determinants of the decision to use
real estate brokers.