Issues In Disintermediation In The Real Estate Brokerage Sector

Abstract

This article introduces new models of disintermediation of the real estate broker by the buyer or the seller. The decision to retain a real estate broker is critical in the property purchase/sale process. The existing literature does not contain analysis of: 1) information asymmetry, 2) the conditions under which it will be optimal to disintermediate the broker, 3) social capital and reputation, 4) the impact of different types of real estate brokerage contracts. The article shows that dis-intermediation of the real estate broker by the seller or buyer may be optimal in certain conditions.