Internet use and real estate brokerage market intermediation

Abstract This paper examines the factors that influence the use of the Internet as part of the home buying process and the resulting effect on the efficacy of buyer search. Cross section data acquired from NAR’s 2000 Home Buying and Selling Survey is used to conduct the analysis. This study finds that the use of the Internet as a search tool does not reduces buyer search time. Instead, by reducing within-period search costs, it encourages buyers to search more intensively. By making it possible to learn more about the availability of properties on the market, the Internet allows buyers to visit more properties without a commensurate increase in search duration. The implications of these finding with respect to the future role of brokers as market intermediaries are also examined.

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