Does it matter whom an agent serves? Evidence from recent changes in real estate agency law

Recent changes in real estate law hastened the shift from a seller's agency regime, in which real estate agents serve the interests of sellers, to a b uyer's agency regime, in which agents serve the interests of buyers. Using data from the Atlanta real estate market, we show that the shift to buyer's agency led to a significant decline in real estate prices in the market fo r relatively expensive houses, while real estate prices did not significant ly change in the market for relatively inexpensive homes. In both markets, the average time needed to sell a house fell after the change in agency reg imes. These results are consistent with a conclusion that a shift to buyer' s agency improves the efficiency of the search process.