In summary, homes are a big ticket item and consequently there is a lot of effort put into their purchase. The housing market is a differentiated product market and there will be price variation both due to the variation in the housing itself and as a consequence of the bargaining between buyer and seller. There is a substantial amount of intermediation in the process of buying an selling a home. Much of this intermediation is done by real estate agents/brokers. Another intermediary is the appraiser whose job is to provide an independent valuation of the property. Intermediation may be subject to "moral hazard" and that may in turn affect transaction prices.
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