IDEAS home Printed from https://ideas.repec.org/a/jre/issued/v24n22002p165-192.html

Agency Representation and the Sale Price of Houses

Author

Listed:
  • Joachim Zietz

    (Middle Tennessee State University, Murfreesboro, TN 37132)

  • Bobby Newsome

    (Mountain Heritage Mortgage, Inc., Jackson, KY 41339)

Abstract

Multiple Listing Service data are employed to examine how the type of agency representation influences the sale price of a residential property. The results differ by property size. The type of agency representation is relevant only for some segments of the market, mainly smaller- to medium-sized properties. For a certain range of property sizes, buyers who engage a buyer’s agent pay on average 2% less. However, an above average buyer’s agent commission can more than cancel this price effect. Buyers that engage a buyer’s agent that comes from the same firm as the listing agent never pay more for a house.

Suggested Citation

  • Joachim Zietz & Bobby Newsome, 2002. "Agency Representation and the Sale Price of Houses," Journal of Real Estate Research, American Real Estate Society, vol. 24(2), pages 165-192.
    • Handle: RePEc:jre:issued:v:24:n:2:2002:p:165-192
    as

    Download full text from publisher

    File URL: http://pages.jh.edu/jrer/papers/pdf/past/vol24n02/04.165_192.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. G. Donald Jud & James Frew, 1986. "Real Estate Brokers, Housing Prices, and the Demand for Housing," Urban Studies, Urban Studies Journal Limited, vol. 23(1), pages 21-31, February.
    2. Joachim Zietz, 2001. "Heteroskedasticity and Neglected Parameter Heterogeneity," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(2), pages 263-273, May.
    3. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    4. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    5. William A. Brock & Steven N. Durlauf, 2001. "Discrete Choice with Social Interactions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(2), pages 235-260.
    6. James Heckman, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    7. repec:bla:obuest:v:63:y:2001:i:2:p:263-73 is not listed on IDEAS
    8. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-1294, September.
    9. Yinger, John, 1981. "A Search Model of Real Estate Broker Behavior," American Economic Review, American Economic Association, vol. 71(4), pages 591-605, September.
    10. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    11. R. Kelley Pace & James P. LeSage, 2004. "Spatial Statistics and Real Estate," The Journal of Real Estate Finance and Economics, Springer, vol. 29(2), pages 147-148, September.
    12. Harold W. Elder & Leonard V. Zumpano & Edward A. Baryla, 2000. "Buyer Brokers: Do They Make a Difference? Their Influence on Selling Price and Search Duration," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 28(2), pages 337-362.
    13. Joachim Zietz & Bobby Newsome, 2001. "A Note on Buyer's Agent Commission and Sale Price," Journal of Real Estate Research, Taylor & Francis Journals, vol. 21(3), pages 245-254, January.
    14. Thursby, Jerry G., 1992. "A comparison of several exact and approximate tests for structural shift under heteroscedasticity," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 363-386.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marcus T. Allen & Justin D. Benefield & Ronald C. Rutherford, 2023. "Co-Listing Strategies: Better Transaction Outcomes?," The Journal of Real Estate Finance and Economics, Springer, vol. 67(3), pages 517-544, October.
    2. Joachim Zietz & Emily Zietz & G. Sirmans, 2008. "Determinants of House Prices: A Quantile Regression Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 37(4), pages 317-333, November.
    3. repec:dau:papers:123456789/515 is not listed on IDEAS
    4. William Hardin III & Ken Johnson & Zhonghua Wu, 2009. "Brokerage Intermediation in the Commercial Property Market," Journal of Real Estate Research, Taylor & Francis Journals, vol. 31(4), pages 397-420, January.
    5. Steegmans, Joep & Hassink, Wolter, 2017. "Financial position and house price determination: An empirical study of income and wealth effects," Journal of Housing Economics, Elsevier, vol. 36(C), pages 8-24.
    6. Vestal, Mallory K. & Lusk, Jayson L. & Cooper, Steven R. & Ward, Clement E., 2012. "What Are the Consequences of United States Government Slaughter Policies on Horse Prices?," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119766, Southern Agricultural Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joachim Zietz, 2006. "Detecting neglected parameter heterogeneity with Chow tests," Applied Economics Letters, Taylor & Francis Journals, vol. 13(6), pages 369-374.
    2. Han, Lu & Strange, William C., 2015. "The Microstructure of Housing Markets," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 813-886, Elsevier.
    3. Yang Zhang & Hong Zhang & Michael J. Seiler, 2016. "The Effects of Time Constraints on Broker Behavior in China¡¦s Resale Housing Market: Theory and Evidence," International Real Estate Review, Global Social Science Institute, vol. 19(3), pages 353-370.
    4. Rahman, Mustafizur & Al-Hasan, Md., 2018. "Male-Female wage gap and informal employment in Bangladesh: A quantile regression approach," MPRA Paper 90131, University Library of Munich, Germany.
    5. William Hardin III & Ken Johnson & Zhonghua Wu, 2009. "Brokerage Intermediation in the Commercial Property Market," Journal of Real Estate Research, Taylor & Francis Journals, vol. 31(4), pages 397-420, January.
    6. Zumpano, Leonard V. & Johnson, Ken H. & Anderson, Randy I., 2003. "Internet use and real estate brokerage market intermediation," Journal of Housing Economics, Elsevier, vol. 12(2), pages 134-150, June.
    7. E. Pastrapa & C. Apostolopoulos, 2015. "Estimating Determinants of Borrowing: Evidence from Greece," Journal of Family and Economic Issues, Springer, vol. 36(2), pages 210-223, June.
    8. Li, Ming-Yuan Leon, 2009. "Value or volume strategy?," Finance Research Letters, Elsevier, vol. 6(4), pages 210-218, December.
    9. Medina, Eva & Vicéns, José, 2011. "Factores determinantes de la demanda eléctrica de los hogares en España: una aproximación mediante regresión cuantílica/Determinants of Household Electricity Demand in Spain: An Approach through Quant," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 29, pages 515-538, Agosto.
    10. Huang, Wen-Hsiu, 2015. "The determinants of household electricity consumption in Taiwan: Evidence from quantile regression," Energy, Elsevier, vol. 87(C), pages 120-133.
    11. Joachim Zietz & Emily Zietz & G. Sirmans, 2008. "Determinants of House Prices: A Quantile Regression Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 37(4), pages 317-333, November.
    12. Uematsu, Hiroki & Mishra, Ashok K., 2012. "The Impact of Natural Amenity on Farmland Values: A Quantile Regression Approach," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119804, Southern Agricultural Economics Association.
    13. Koh, SzeKee & Durand, Robert B. & Limkriangkrai, Manapon, 2015. "The value of Saints and the price of Sin," Pacific-Basin Finance Journal, Elsevier, vol. 35(PA), pages 56-72.
    14. Leon Li & Nen-Chen Richard Hwang, 2017. "Prospect Theory and Earnings Manipulation: Examination of the Non-Uniform Relationship between Earnings Manipulation and Stock Returns Using Quantile Regression," Working Papers in Economics 17/25, University of Waikato.
    15. Tilov, Ivan & Farsi, Mehdi & Volland, Benjamin, 2020. "From frugal Jane to wasteful John: A quantile regression analysis of Swiss households’ electricity demand," Energy Policy, Elsevier, vol. 138(C).
    16. Huber, Martin & Melly, Blaise, 2011. "Quantile Regression in the Presence of Sample Selection," Economics Working Paper Series 1109, University of St. Gallen, School of Economics and Political Science.
    17. Marco Capasso & Tania Treibich & Bart Verspagen, 2015. "The medium-term effect of R&D on firm growth," Small Business Economics, Springer, vol. 45(1), pages 39-62, June.
    18. Gan, Jie, 2007. "Collateral, debt capacity, and corporate investment: Evidence from a natural experiment," Journal of Financial Economics, Elsevier, vol. 85(3), pages 709-734, September.
    19. Pei-Ing Wu & Yi Chen & Je-Liang Liou, 2021. "Housing property along riverbanks in Taipei, Taiwan: a spatial quantile modelling of landscape benefits and flooding losses," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(2), pages 2404-2438, February.
    20. Aaron Jackson & William Miles, 2009. "Quantitative goals for monetary policy: a quantile regression approach," Applied Economics, Taylor & Francis Journals, vol. 41(16), pages 2065-2071.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:24:n:2:2002:p:165-192. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: JRER Graduate Assistant/Webmaster (email available below). General contact details of provider: http://www.aresnet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.