Agency Choice and Financial Consequences : Evidence from the Sydney Housing Market

Song SHI*, Junji XIAO

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)peer-review


This paper studies the seller’s agency choice and the financial consequences of this decision. Specifically, at sale, sellers can choose to use either the same agency they originally purchased the house from, or a different agency. Since the same agency sold the property before, it has an informational advantage by knowing the property and principal. Using housing market transaction data in Sydney, the largest capital city in Australia, we show that sellers make their agency choice based on past purchase experience, non-salient features of the property, and the current market shares of the agency. Furthermore, our analysis of pair sale transactions reveals that using the same agency results in a 1.1–1.4% return discount compared to using a different agency. The findings support agency theory, which suggests that using the same agency may not be financially beneficial for the principals due to its informational advantage.
Original languageEnglish
Number of pages25
JournalJournal of Real Estate Research
Publication statusE-pub ahead of print - 10 Jan 2024

Bibliographical note

We acknowledge housing transaction data provided by the Rozetta Institute (formerly Securities Industry Research Centre of Asia-Pacific (SIRCA)) on behalf of CoreLogic. We also would like to thank Claire Shi for excellent research assistance in this paper. We are responsible for any remaining errors.
© 2021 Song Shi and Junji Xiao. All Rights Reserved.

Publisher Copyright:
© 2024 American Real Estate Society.


  • Real estate brokerage
  • agency choice
  • principal agent problem
  • agency value
  • asymmetric information

Cite this