Title

Seller Over-Pricing and Listing Contract Length: The Effects of Endogenous Listing Contracts on Housing Markets

Authors

Authors

R. I. Anderson; R. T. Brastow; G. K. Turnbull;B. D. Waller

Comments

Authors: contact us about adding a copy of your work at STARS@ucf.edu

Abbreviated Journal Title

J. Real Estate Financ. Econ.

Keywords

Listing contract; List price; Seller pricing; House price; House; liquidity; RESIDENTIAL REAL-ESTATE; SELLING PRICE; TIME; LIQUIDITY; EXPIRATION; BROKERAGE; QUALITY; Business, Finance; Economics; Urban Studies

Abstract

This paper examines how seller pricing decisions influence listing contract length and how these decisions affect price and liquidity in housing markets. Because list price affects broker effort required to sell the property, brokers respond to seller overpricing by increasing the negotiated listing contract length. At the same time, sellers respond to longer listing contracts by adjusting their list price strategy. Both list price and length of marketing time affect broker sales effort and therefore a property's realized selling price and liquidity. Analysis of house transaction data from Virginia indicates that greater over-pricing by sellers prompts brokers to pursue longer listing contracts, which subsequently lengthen marketing time but increase selling price. The results reveal a novel transmission mechanism from higher list price (which induces longer contracts) to selling price and liquidity.

Journal Title

Journal of Real Estate Finance and Economics

Volume

49

Issue/Number

3

Publication Date

1-1-2014

Document Type

Article

Language

English

First Page

434

Last Page

450

WOS Identifier

WOS:000341750400006

ISSN

0895-5638

Share

COinS