The Impacts of Contract Type on Broker Performance: Submarket Effects
AbstractRutherford et al. (2001) develop and empirically test a model that analyzes the effect the type of listing contract, either exclusive agency (EA) or exclusive right to sell (ERTS), has on the performance of the agent/broker. This paper extends the work of Rutherford et al. (2001) and looks at differences between housing submarkets delineated by price. The results show a selling price discount associated with both broker-effected and owner-effected sales for lower-priced houses with EA contracts. For higher-priced houses, there is no price advantage to an EA-listing if the broker achieves the sale, but if the owner sells the house, there is a modest price premium associated with the sale. The primary implication of the results is that owners of lower-priced houses should be wary of alternative listing arrangements, namely exclusive agency contracts.
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Bibliographic InfoArticle provided by American Real Estate Society in its journal journal of Real Estate Research.
Volume (Year): 26 (2004)
Issue (Month): 3 ()
Contact details of provider:
Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
Web page: http://www.aresnet.org/
Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
Find related papers by JEL classification:
- L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
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- Bar-Isaac, Heski & Gavazza, Alessandro, 2013. "Brokers' contractual arrangements in the Manhattan residential rental market," MPRA Paper 43967, University Library of Munich, Germany.
- Michael LaCour-Little, 2009. "The Pricing of Mortgages by Brokers: An Agency Problem?," Journal of Real Estate Research, American Real Estate Society, vol. 31(2), pages 235-264.
- Jonathan Spader & Roberto Quercia, 2011. "Mortgage Brokers and the Refinancing Transaction: Evidence from CRA Borrowers," The Journal of Real Estate Finance and Economics, Springer, vol. 42(2), pages 181-210, February.
- Raymond Brastow & Thomas Springer & Bennie Waller, 2012. "Efficiency and Incentives in Residential Brokerage," The Journal of Real Estate Finance and Economics, Springer, vol. 45(4), pages 1041-1061, November.
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