For Sale by Owner Online: Who Gets the Saved Commission?

The impact of the Internet on housing prices and its implications on real estate brokerage industry was discussed. An empirical study was conducted to identify the difference in price between the houses sold with a broker and those sold by the owner using the Internet. The real estate brokerage business, involve common practice that when the transaction of property involves both buyer's and seller's agents, which implies that the transaction cost is about the same for buying and selling a property. The survey questionnaire concerning individual's opinion about buying and selling homes using the Internet were sent out to home owners in the sample regions. The study suggests that cyberintermediaries and reintermediaries must focus on establishing a sufficiently large base of home listings. The study is found to be useful in assessing competitive environment and making strategic decisions.