The Possible Consequences of Bank Entry into the Real Estate Brokerage Market: What the Research Tells Us

This article examines the extant literature on real estate brokerage to identify and assess the possible consequences of allowing financial holding companies and financial subsidiaries of national banks entry into the real estate brokerage market. Specifically, this study addresses three areas of concern: the effects of bank entry on competition within this market, the impact on market efficiency, and how entry may affect the type and quality of services provided to consumers. Given what is known about the nature of this market, the findings indicate that bank-provided real estate brokerage services should only be permitted if advocates can offer compelling evidence that the potential benefits outweigh the risks to the consumer.