Determinants of buyer search and the role of broker: Evidence from urban China's housing market

This paper examines the homebuyers' search process and the role of real estate broker in China's urban housing market, where inactive housing stock transactions and infant brokerage industry are distinct characteristics. Using Guangzhou as a case, two dimensions of search-intensity and duration-are modeled simultaneously. This study find that buyers trade off two different search costs-activity cost and duration cost. The study also finds that despite the industry's immature nature, brokers can increase search intensity and shorten search duration by reducing the activity cost. The broker-choice model demonstrates that besides search cost, buyers' confidence in brokers' service quality will greatly influence their choice, so improvements in service quality and reputation have important implications for the development of the brokerage industry.