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Do Buyer Incentives Work for Houses during a Real Estate Downturn?

Listed author(s):
  • Kenneth Soyeh

    ()

  • Jonathan Wiley

    ()

  • Ken Johnson

    ()

Registered author(s):

    The impact of incentives on marketing duration is examined for residential real estate using data from the Multiple Listing Service during a real estate downturn. The focus is on incentives offered directly by sellers to potential homebuyers. The evidence suggests that incentives are not capitalized into the selling price during the softened market conditions. Alternatively, incentives are found to have a significant reduction in marketing time, however this is found to be true only for closing costs and not for other incentive classifications. The benefit of reduced expected market time from offering incentives is quickly diminished when the seller initially overprices the listing by a large amount. Copyright Springer Science+Business Media New York 2014

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    File URL: http://hdl.handle.net/10.1007/s11146-012-9394-8
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    Article provided by Springer in its journal The Journal of Real Estate Finance and Economics.

    Volume (Year): 48 (2014)
    Issue (Month): 2 (February)
    Pages: 380-396

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    Handle: RePEc:kap:jrefec:v:48:y:2014:i:2:p:380-396
    DOI: 10.1007/s11146-012-9394-8
    Contact details of provider: Web page: http://www.springer.com

    Order Information: Web: http://www.springer.com/economics/regional+science/journal/11146/PS2

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    1. Geoffrey K. Turnbull & Velma Zahirovicā€Herbert, 2011. "Why Do Vacant Houses Sell for Less: Holding Costs, Bargaining Power or Stigma?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 39(1), pages 19-43, March.
    2. Justin Benefield & Christopher Cain & Ken Johnson, 2011. "On the Relationship Between Property Price, Time-on-Market, and Photo Depictions in a Multiple Listing Service," The Journal of Real Estate Finance and Economics, Springer, vol. 43(3), pages 401-422, October.
    3. 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.
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    17. Ken H. Johnson & Randy I . Anderson & James R. Webb, 2000. "The Capitalization of Seller Paid Consessions," Journal of Real Estate Research, American Real Estate Society, vol. 19(3), pages 287-300.
    18. Ken H. Johnson & Leonard V. Zumpano & Randy I. Anderson, 2008. "Intra-firm Real Estate Brokerage Compensation Choices and Agent Performance," Journal of Real Estate Research, American Real Estate Society, vol. 30(4), pages 423-440.
    19. David Geltner & Brian D. Kluger & Norman G. Miller, 1991. "Optimal Price and Selling Effort from the Perspectives of the Broker and Seller," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(1), pages 1-24.
    20. Zuehlke, Thomas W, 1987. "Duration Dependence in the Housing Market," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 701-704, November.
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