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Price Effects of Non-Traditionally Broker-Marketed Properties

Author

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  • Ken Johnson

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  • Thomas Springer

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  • Christopher Brockman

    ()

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. 2005

Suggested Citation

  • Ken Johnson & Thomas Springer & Christopher Brockman, 2005. "Price Effects of Non-Traditionally Broker-Marketed Properties," The Journal of Real Estate Finance and Economics, Springer, vol. 31(3), pages 331-343, November.
  • Handle: RePEc:kap:jrefec:v:31:y:2005:i:3:p:331-343 DOI: 10.1007/s11146-005-2793-3
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    File URL: http://hdl.handle.net/10.1007/s11146-005-2793-3
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    References listed on IDEAS

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    1. Haubrich, Joseph G., 1989. "Financial intermediation : Delegated monitoring and long-term relationships," Journal of Banking & Finance, Elsevier, vol. 13(1), pages 9-20, March.
    2. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    3. Ken H. Johnson & Sean P. Salter & Leonard V. Zumpano & Randy I. Anderson, 2001. "Exterior Insulation and Finish Systems: The Effect on Residential Housing Prices and Marketing Time," Journal of Real Estate Research, American Real Estate Society, vol. 22(3), pages 289-312.
    4. Munneke, Henry J & Yavas, Abdullah, 2001. "Incentives and Performance in Real Estate Brokerage," The Journal of Real Estate Finance and Economics, Springer, vol. 22(1), pages 5-21, January.
    5. Marcus T. Allen & Ronald C. Rutherford & Thomas M. Springer, 1997. "Reexamining the Impact of Employee Relocation Assistance on Housing Prices," Journal of Real Estate Research, American Real Estate Society, vol. 13(1), pages 67-76.
    6. Michael A. Arnold, 1992. "The Principal-Agent Relationship in Real Estate Brokerage Services," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(1), pages 89-106.
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    Citations

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    Cited by:

    1. Biqing Huang & Ronald Rutherford, 2007. "Who You Going to Call? Performance of Realtors and Non-realtors in a MLS Setting," The Journal of Real Estate Finance and Economics, Springer, vol. 35(1), pages 77-93, July.
    2. repec:kap:rqfnac:v:49:y:2017:i:1:d:10.1007_s11156-016-0583-z is not listed on IDEAS
    3. William G. Hardin III & Ken H. Johnson & Zhonghua Wu, 2009. "Brokerage Intermediation in the Commercial Property Market," Journal of Real Estate Research, American Real Estate Society, vol. 31(4), pages 397-420.
    4. Justin Benefield & William Hardin, 2015. "Does Time-on-Market Measurement Matter?," The Journal of Real Estate Finance and Economics, Springer, vol. 50(1), pages 52-73, January.
    5. Jonathan Wiley & Leonard Zumpano & Justin Benefield, 2011. "The Limited-Service Brokerage Decision: Theory and Evidence," The Journal of Real Estate Finance and Economics, Springer, vol. 43(3), pages 336-358, October.
    6. Steven Stelk & Leonard V. Zumpano, 2017. "Can Real Estate Brokers Affect Home Prices Under Extreme Market Conditions?," International Real Estate Review, Asian Real Estate Society, vol. 20(1), pages 51-73.

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