Institutional convergence in real estate markets: a comparative study of brokerage models and transaction costs

This paper analyses international variations in transaction processes and costs in commercial real estate markets. They are interpreted through a framework emerging from new institutional economics and socio-technical theory. Specifically, brokerage arrangements and transaction times and costs are investigated across a sample of 26 developed, emerging and frontier real estate markets. The research reveals a nuanced and intricate pattern of market conventions. In some markets, a variety of transaction models can comfortably co-exist, but more commonly, a single model is embedded and dominant. However, there is near universality in practice for other aspects of transactions such as broker service offer and brokerage commission structures. Overall, local market outcomes seem to reflect local adaptations and modifications of a small number of common models