Price, Place, People and Local Experience
AbstractWith property characteristics unobserved or difficult to measure, there are returns to evaluation, due diligence and performance. Buyers can invest in observable human capital signals including location and experience that lower search costs. Buyers with local experience have lower search costs, a higher probability of closing and can earn a purchase discount from the acquisition of human capital developed from repeatedly transacting in a specific real estate market. For 1,793 apartment transactions in Atlanta over the 1995 to 2007 period, a very small focused group of local, experienced buyers receives acquisition discounts. The comparison is with non-locals and locals with two or fewer purchases. Inexperienced locals receive no or little discount and match non-local results. Non-locals do not pay a premium when compared to the typical buyer.
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Bibliographic InfoArticle provided by American Real Estate Society in its journal journal of Real Estate Research.
Volume (Year): 35 (2013)
Issue (Month): 4 ()
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
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