The Limited-Service Brokerage Decision: Theory and Evidence

This study examines the home seller’s brokerage services decision, comparing full-service brokerage and limited-service arrangements. A model is developed which considers seller motivation and availability of effort, along with the cost of brokerage services, broker productivity and market dynamics as factors of influence in this decision. Limited-service arrangements are found to have a significant impact on price and marketing time. The popularity of limited-service arrangements is strongly influenced by the total dollar cost of brokerage services, which, in turn, is determined by housing market conditions.