Price Effects of Non-Traditionally Broker-Marketed Properties

Abstract

This study investigates whether or not non-traditional marketing has an effect on the prices paid for residential real estate. Non-traditionally broker-marketed properties are defined as those properties that are sold with the aid of a real estate broker, but not marketed through a Multiple Listing Service (MLS). An analysis of properties that sold in this fashion offers further insight into the intermediation role of the real estate broker, as well as an opportunity to further investigate the efficiency of residential real estate markets. Specifically, we can assess whether MLS participation generates higher prices by determining whether like-kind properties price equivalently despite differences in their mode of marketing. The results show a significant and positive impact by non-traditionally broker-marketed properties on property price suggesting, for this sample, a premium of over 6% compared to like-kind properties marketed through the MLS. This premium may be a result of brokers intermediating a better matching of buyers and sellers. The observed premium also suggests a degree of market inefficiency. Copyright Springer Science + Business Media, Inc. 2005market efficiency, intermediation, principal-agent, residential brokerage,

Do Real Estate Brokers Add Value When Listing Services Are Unbundled?

“…The analysis of Johnson, Springer, and Brockman (2005) Studying Stanford University housing offers several additional advantages. We have data on all home sales over a 27 year period, during which the quality of the neighborhoods remained approximately constant due to the special nature of the market.…”

Who You Going to Call? Performance of Realtors and Non-realtors in a MLS Setting

“…Johnson et al (2005) also found that properties sold by a broker through the MLS had a lower price than broker-sold properties outside the MLS. But, Doiron et al (1985), and Frew and Jud (1987) found that brokers obtain higher sale prices than owners selling their own property.…”

“…Prior research on how brokers impact selling price has focused on FSBO versus broker sales through the MLS, and broker sales through the MLS versus broker sales outside the MLS. The evidence from this research is mixed, with results indicating that the use of a broker increases the sales price, decreases the sales price and has no impact on the selling price (see Yavas and Colwell 1995;Johnson et al 2005;Doiron et al 1985 andJud andFrew 1986;Kamath andYantek 1982 andColwell et al 1992). …”

Broker beauty and boon: a study of physical attractiveness and its effect on real estate brokers’ income and productivity

“…Sirmans et al (1995) and Johnson et al (2005) examine this phenomenon, with the former finding no pricing impact for 'quick sales' and the latter finding a positive pricing premium for 'nontraditional brokermarketed' properties; in essence, both studies examine extremely short listing periods for property sales that successfully closed. Although some previous research suggests that agent's race and gender are unimportant in residential brokerage activities (Turnbull and Dombrow, 2007), we include controls for the race (ListAgentRace and SellAgentRace) and gender (ListAgentGender and SellAgentGender) of both the listing agent and the selling agent in order to properly specify our empirical model.…”