Real Estate Commissions: Some Insights from the Economics of Multi-Sided Platforms

The real estate industry has long been scrutinized by regulatory agencies for various practices. Recent investigations and lawsuits have focused on the structure of real estate commissions in which a home seller pays both the commissions of its own agent and the agent working with the buyer. This article provides some insights from the economics literature on multi-sided platforms and applies those insights to the structure of real estate commissions. Rather than being an “odd quirk” or anti