Brokerage Firms' Characteristics and the Sale of Residential Property

William T. Hughes
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William T. Hughes: Department of Finance Louisiana State University Baton Rouge, Louisiana 70803, http://www.finance.lsu.edu/

Journal of Real Estate Research, 1995, vol. 10, issue 1, pages 45-56

Abstract: Brokerage firms are continually searching for opportunities to improve their business and position in the market. Given a resistance to price competition, firms typically compete by offering different services to their customers. These services range from media access to new search technology to reputation. Firms offering new services may enhance the experience of home transition for individuals and attract business when past customers describe their comfort with the firm. This paper empirically examines the firms' impact on a more tangible feature of the home sale process: the sale price. There is a generally accepted trade-off when individuals sell their homes. Speed of sale and price obtained are balanced against each other. Holding days on the marketing constant, as well as property amenities, evidence is presented suggesting that some firms consistently achieve higher sale prices than other firms. Specifically, in the given market, when homes are listed with one of the largest firms, the owner can anticipate a significantly higher sale price. This size effect is very limited as some large firms consistently sell at prices below the small firm comparison group.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1995
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