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A Study of Exclusive Agency Listing System's Efficiency on Real Estate Transation Cost Theory

  • Korea Real Estate Review
  • 2007, 17(2), pp.107-130
  • Publisher : korea real estate research institute
  • Research Area : Social Science > Law > Law of Special Parts > Law of Real Estate

YoungKi Moon 1,  Choi， Bong Hyun 1

1강원대학교

Candidate

ABSTRACT

The Korean real estate transaction method still lags behind compared to advanced countries. The exclusive agency listing system has been universalized in advanced foreign countries and it is a matter of common knowledge that they have been rooted in the US, Europe, Japan and the like and are actively used. What is more important among other things is to make the exclusive agency listing system properly understood to brokers and people. Therefore, this study assumed that the real estate transaction market is the domain of typical market failure leading to the inefficiency of real estate transactions and social costs due to information asymmetry. Accordingly, government is required to make a proper intervention in it. It should perform a role as the coordinator which is assumed to maximize the revitalization of the system to minimize the social cost. The findings of this study were comprehensively summarized. If the function of exclusive agency listing system work properly, the efficiency of real estate transactions can be enhanced. Moreover, efficient resource allocation is impaired by market failure appearing as the information asymmetry inherent the real estate transaction market and the resultant unfairness and obscurity of the information system, the increase of transactional costs and the like. Under this understanding, a new role of government should be set. The existing general role of government makes a mistake in the following respects: First, government has underestimated the importance and function of the exclusive agency listing system in the real estate transaction system. In the current inefficient and obscure real estate transaction structure, the exclusive agency listing system should be understood as the optimum alternative to resolve the problem of information asymmetry arising from the constraints of transaction information and reduce transactional costs. In the future, government should devote itself to readjusting and revitalizing existing systems by analyzing their problems rather than leave the exclusive agency listing system unresolved and present a new policy under the current situation that the real estate brokerage market is backward. In addition, it is necessary to make a strategical grope for the scheme for improving the institutional and politic complaints of brokers and customers and constructing and reinforcing their relationship between broker and customer.

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