Issues in disintermediation in the real estate brokerage sector

It is shown that dis-intermediation of the real estate broker by the seller or buyer may be optimal in certain conditions.

Abstract

This article introduces new models of disintermediation of the real estate\nbroker by the buyer or the seller. The decision to retain a real estate broker\nis critical in the property purchase/sale process. The existing literature does\nnot contain analysis of: 1) information asymmetry, 2) the conditions under\nwhich it will be optimal to disintermediate the broker, 3) social capital and\nreputation, 4) the impact of different types of real estate brokerage\ncontracts. The article shows that dis-intermediation of the real estate broker\nby the seller or buyer may be optimal in certain conditions.\n