Each real estate transaction involves a number of strategic decisions. First, the seller needs to determine an optimal asking price under incomplete information without the knowledge of the preferences and valuations of potential buyers. Then, sellers and buyers have to decide on an optimal search strategy, an optimal reservation price and an associated stopping rule. However, a contact between the buyer and seller does not necessarily result in a mutually acceptable match, depending on the reservation prices and outside options of the two sides. Once a contact is achieved, the two sides engage in a bargaining game, again under incomplete information without the knowledge of each other's reservation prices. If the bargaining results in an agreement, then a sale contract is signed. To finance the purchase, the buyer often chooses among a rich menu of mortgage contracts, where the choices offered by the lender often aims at screening borrowers of different risk types. Along the way, the buyer and seller deal with agents and intermediaries, including lawyers, lending agencies and real estate brokers, and they need to worry about the effectiveness of the compensation structure to minimize potential agency problems.The complex real estate transaction makes a fascinating research lab to analyze many interesting economic problems and to apply various economic models; from price theory to contract theory, from matching games to bargaining games, from market structure to the theory of the firm, from moral hazard to adverse selection problems, from agency theory to search theory, etc.Brokers play a bigger role during a real estate transaction than any other third party. They are involved in almost every phase of a real estate transaction, including the determination of the asking price strategy, searching for a trading partner, matching and negotiation strategy, obtaining a mortgage, and the closing. The significance of the role played by agents is also evident by the fact that they represent approximately 81% of single-family dwelling sales and total brokerage commission fees add up to more than $65.5 billion a year ). Thus, it is not surprising that the literature paid a significant amount of attention to the principal-agent problems involved in the seller-broker relationship.