Study Of Real Estate Brokering Agent

Since 1990s, real estate brokerages have been mushrooming in China. The rapid development leads to the badly demand of application of Economics in this industry. But the domestic literatures have almost stayed in the simple research mode of "Existing problems plus Policy recommendations ". Under such background, thispaper attempts to carry on the study to the central issue-agency problems in thereal estate brokerage industry in China, based on the modern economics theories, lessons from and the U.S. advanced study results.The paper narrates the agency problems of the realtor from 5 perspectives: Generation of agency relationship, Comparison of agency mechanism, Analysis of agency price, Analysis of agency incentives and Choices of agent business. Research methods include normative logic analysis and comparative institute analysis.Firstly, the paper have established a endogenous specification model based on search behavior, which is used to interpret how the economy composed of sellers and buyers become a economy made up of three parties: the buyers, sellers and brokers.Secondly, through the comparative analysis of Sino-US contracts, the paper has pointed out three basic characteristics leading to different transaction mechanism of Sino-US: multiple agents, dual agency and non-sharing listing in China; exclusive agent, no dual agency and sharing listing in U.S. From the point of view of efficiency and welfare, China's mechanism is less than American's, but the views of economic history and institute change both prove that the institute transforms into U.S.A. depend on the enforcement of the third party.Thirdly, the paper turns to the price problem and conclusions are as following: (1) Fixed-percentage commission rate is extensively adopted by most countries and regions; (2) The relationship of price competition and scale competition is that a larger broker sets a higher commission rate, and a smaller scale sets lower; (3) The same scale broker provides the same service level under the non-price competition, and non-price competition can't create the Pareto optimal state.Fourthly, the paper points out there exists various moral hazards phenomenos under agency relationship. When commission rate is exogenous, commission rate is not satisfied with the second-optimal incentive contracts, and the principals can not do anything except accepting realtors' activity efforts that are based on their private knowledge. As a quality expert, the broker's participation reduces adverse selection problems of buyer-seller direct transaction. But a new adverse selection problem has arisen because of the participation of brokers.At last, business choices of real estate brokerage is concerned, and the paper sums up four major factors: Cash flow restrain, risk, revenue, institute, which are the real reasons for bid-and -ask mushrooming in China instead of in U.S.