The Rise of Platform-Based Networks: Outlook for the Real Estate Brokerage Industry

The evolution of the real estate brokerage industry is characterized by the ever-emerging, expanding, and evolving network effect. Historically, the real estate brokerage industry developed in different countries around the world in three general forms of agent networks: the multiple listing service (MLS)-centered cooperation network among independent agents that is typical in the United States, through which a real estate listing service is created for and by real estate brokers to inform each other in selling their clients’ properties; the random stochastic informal cooperation network based on an Internet information platform, such as those utilized in Australia and the UK; and an internal closed cooperation network within individual brokerage firms, which is typical in Japan. Despite the differences, all three modes rely on the basic institutional guarantee of the exclusive listing agreement that is based on an “exclusive right to sell” contract where the listing broker receives a payment if the home is sold during the listing period regardless of who finds a buyer for the home. Meanwhile, due to the rapid penetration of the Internet, the boom in consumers’ demand for quality service, and the special backgrounds of open listing agreements, through which a broker has the nonexclusive right to sell the home and receive payment but other brokers or the seller may also sell the home without any payment to the listing broker, China is steering toward a completely different approach to brokerage, featuring a platform-based limited opening cooperation network.