Agency Choice and Financial Consequences: Evidence from the Australian housing market

What is it about?

I have collaborated with Professor Xiao Junji from the School of Economics at Lingnan University to conduct quantitative research on the role of real estate agents in property transactions and their impact on transaction prices. The full article was recently published in one of the three major core journals in the field of real estate research, Real Estate Research. Due to infrequent transactions and location constraints, individuals often lack practical experience in selecting real estate agents. We discovered that hiring the same agent results in a selling price approximately 1.2% lower than when choosing different agents, meaning a house valued at 1 million would sell for about 12,000 less in the Sydney house market, Australia. While repeatedly using the same agent may be convenient, it comes at a cost. When your real estate agent is too familiar with your property and situation, you become susceptible to potential exploitation. To minimise losses, homeowners should choose an agent based on their past transaction experience, the agent's reputation, market share, and the unique features of their property. If your property is distinctive, with features such as a large garden and swimming pool, unique interior and exterior designs, or is considered a luxury property, it is advisable to stick with the same agent, as they may specialise in such transactions. Otherwise, conducting your research and switching to a different agent might be preferable. For real estate agents, unless specialising in the high-end market, it is recommended not to overly focus on retaining existing clients, but rather to concentrate on improving service quality and acquiring new clients to increase market share. Interested readers can access the full article via the following link: https://lnkd.in/gH2d3s-t If you are unable to download it, feel free to send me a private message.

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Photo by Towfiqu barbhuiya on Unsplash

Photo by Towfiqu barbhuiya on Unsplash