Individual Agents,Firms, and the Real Estate Brokerage Process

This study examines how individual agents affect house selling prices and time on the market while controlling for brokerage firm-specific effects as well as supply and demand conditions that vary by neighborhood. Firm size effects disappear once firm specialization and agent characteristics are taken into account but geographic concentration by firms leads to higher selling prices. For individual agents, neither sex nor selling own listings affects price or selling time, but there are gains from partnering transactions across firms. Agents who specialize in listing properties obtain higher prices for their sellers while those who specialize in selling obtain lower prices for their buyers. Houses nearer to other transactions of an agent sell for higher prices. Finally, greater scale of listing and selling activity by an agent tends to lower selling price or lengthen the time on the market.

Price concessions,time on the market,and the actual sale price of homes

This article examines the relationships between listing price concessions, time on the market, and the actual sale price of homes. The principal hypothesis that significant listing price concessions, usually the result of overpricing, can lead to real discounts on the final sale price is proven by our empirical results. We also found that the longer the time on the market, the higher the sale price, ceteris paribus. This finding is consistent with the theory that the longer a property remains on the market, the higher the probability is that a relatively superior selling price can be realized.     

Selling price,financing premiums,and days on the market

Home buyers face the task of trading off selling price and the time required to sell a property. One factor that may affect this decision is the presence of financing premiums. The effects of financing premiums on the time a single-family home remains on the market is examined in this paper. The question is to what extent home sellers are willing to compromise on financing premiums and make concessions to buyers in order to sell their properties more quickly.The study uses a sample of single-family residential homes sold with assumption financing and new conventional financing. The sample covers segments of time when interest rates were relatively low and stable (1975–1976) and when rates were much higher on average and more volatile (1980).The results show that financing premiums were present in selling prices of assumption-financed home sales during the 1975–1976 period and that sellers were able to capture a premium and maintain the same average time on the market as properties with other types of financing. During a period of unfavorable market conditions, such as 1980, the results indicate that home sellers with assumption financing conceded or negotiated away any premium in order to significantly decrease the number of days their properties stayed on the market for sale.     

Why Do Companies List Shares Abroad?: A Survey of the Evidence and Its Managerial Implications

The purpose of this monograph is to survey the academic literature on the economic implications of the corporate decision to list shares on an overseas stock exchange. My focus is on the valuation and liquidity effects of the listing decision, and the impact of listing on the company's global risk exposure and its cost of equity capital. The evidence shows:
(1) share prices reacts favorably to cross-border listings in the first month after listing;
(2) post-listing price performance up to one year is highly variable across companies depending on the home and listing market, its capitalization, capital-raising needs and other company-specific factors;
(3) post-listing trading volume increases on average, and, for many issues, home-market trading volume increases also;
(4) liquidity of trading in shares improves overall, but depends on the increase in total trading volume, the listing location and the scope of foreign ownership restrictions in the home market;
(5) domestic market risk is significantly reduced and is associated with only a small increase in global market risk and foreign exchange risk, which can result in a net reduction in the cost of equity capital of about 126 basis points;
(6) American Depositary Receipts represent an effective vehicle to diversify U.S.-based investment programs globally;
(7) stringent disclosure requirements are the most important impediment to cross-border listings.     

Efficiency and Incentives in Residential Brokerage

The literature on broker intermediation in residential real estate has shown positive pricing effects associated with the use of a broker and mixed results as far as the pricing effects of nonstandard commission structures. On the premise that real estate broker incentives emanate from two primary sources, factors that increase broker operating efficiency and negotiable features arising from the relationship between the listing broker and the seller, this study assesses the degree to which these incentives affect the marketing time, probability of sale, and selling price of single-family houses. Of particular interest, this study investigates efficiency and broker intermediation effects on residential property associated with a broker concentrating his listings into a service area. Empirical results show that properties within an individual broker??s GIS-determined service area are more likely to sell, sell faster, and sell with an associated price premium. These effects are more concentrated in the market for higher priced homes. Also, additional compensation favorably motivates the broker with higher-priced properties, but has no effect on the sale of lower-priced properties.     

Single-family housing transactions: Seller motivations, price, and marketing time

Factors such as relocation and financial distress motivate the seller of a single-family home to facilitate sale by posting a lower list price, communicating the motivations to the marketplace, or offering sales incentives to agents. Impacts of seller motivations on selling prices and marketing times are estimated using data for single-family homes sold in Arlington, Texas, from 1991 to 1993. Results show selling price discounts for houses with sellers who are either eager, motivated, or anxious, houses with sellers who have relocated, foreclosures, and vacant houses. Only foreclosure houses show the reduced marketing time expected for properties with motivated sellers. The results further suggest that the list price is the seller's primary mechanism for selling the property. Reducing the list price fosters faster sales at the sacrifice of the selling price.     

Distribution of Ownership,Short Sale Constraints,and Market Efficiency: Evidence from Cross‐Listed Stocks

We investigate the interplay between the distribution of ownership, short sale constraints, and market efficiency. Using minute‐by‐minute data during the period surrounding the short sale ban of 2008, we demonstrate that short sale restrictions cause price disparities among cross‐listed stocks when ownership in the stocks is distributed unevenly across the two markets. The stocks tend to trade at a premium in the market where long sellers are relatively scarcer, which reduces the speed at which prices adjust to bad news. The premium is driven primarily by an increase on the ask side of the market where ownership is thinner, is only evident when prices are moving down, and disappears quickly.     

Search Costs,Behavioral Biases,and Information Intermediary Effects

In many markets, buyers, sellers, and their agents have differential information about the quality of heterogeneous assets. We study negotiated transaction prices in the commercial real estate market, which is characterized by heterogeneous assets, illiquidity, and highly segmented local markets, all of which increase the importance of asymmetric information in negotiated pricing outcomes. Using 114,588 industrial, multi-family and office sale transactions that occurred during 1997–2011, we document that distant commercial real estate buyers pay, on average, premiums of 4 % to 15 % relative to local buyers, controlling for individual property characteristics as well as time fixed-effects. We also examine the extent to which the sources of these observed premiums are a product of higher search costs/information asymmetry problems associated with distance (search cost channel) or a result of reference-dependence preference/anchoring based on the price levels in the investors’ local market (behavioral biases channel). Our results suggest the observed price premiums are explained by distant investors who face higher search costs and are at an information disadvantage compared to investors located in closer proximity to the property. In contrast, anchoring plays a more muted role in explaining observed premiums. The use of an intermediary (broker) increases, on average, the acquisition prices of buyers and decreases the disposition prices of sellers by 3 % to 8 %. This result is consistent with the incentive real estate agents have to convince sellers to dispose of their properties too quickly and to convince buyers to search less and therefore pay higher prices.     

Who You Going to Call? Performance of Realtors and Non-realtors in a MLS Setting

This study attempts to shed some light on the extent of non-realtor broker listings on the MLS and their resulting price and time-on-the markets effects. Using duration, probit and selling price models, this study empirically examines whether the REALTOR designation provides a signal of quality that is reflected in the price and time on the market for sellers. Results indicate that properties listed by non-realtors on the MLS setting sell at lower prices, take slightly longer to sell, and are less likely to sell than properties listed by REALTORs in a MLS setting. Working with a REALTOR in a MLS setting appears to be advantageous to the seller.

Spatial Competition and Shopping Externalities: Evidence from the Housing Market

In search markets, greater spatial concentration of sellers increases price competition. At the same time, though, a greater concentration of sellers can create a shopping externality by attracting more buyers to the site. Using housing sales data, we test for spatial competition and shopping externality effects on prices and marketing time. We find that they reflect both competitive and shopping externality effects from surrounding houses, although the relative strength varies with how fresh the house is in the market, the freshness of surrounding houses, and the phase of the market cycle. New listings have the strongest shopping externality effect on neighboring houses that have been on the market for some time. Vacant houses have their strongest competition effects in the declining market and externality effects in the rising market. Fresh houses on the market reap little benefit from shopping externalities in all phases of the market cycle.     

Distortions in Real Estate Transactions with Out-of-State Participants

Using the MLS and the land registration data from Indiana, this paper identifies and explains price distortions associated with out-of-state sellers and buyers in the housing market. We find that out-of-state buyers pay 20.4% higher prices than local buyers, and the premium is fully explained by the former purchasing larger homes than the latter. On the other hand, out-of-state sellers receive a 21.2% price discount, among which 9.3% is attributable to differences in transactional characteristics, 3.2% is explained by increased motivation and weak bargaining power of out-of-state sellers, and 1.5% is due to differences in agent characteristics and behaviours. The remaining 7.2% discount varies systematically with the informational disadvantage of out-of-state sellers, and with the market condition. Our results are robust to model misspecification.     

Information, Search, and House Prices: Revisited

Buyers pay different prices for nearly identical homes. One explanation for this is that housing markets are thin, resulting in price bargaining between sellers and buyers. If the relative bargaining power of buyers varies, so will sales prices. One hypothesis is that the relative bargaining strength of buyers coming from outside the local market relative to that of local residents is weak, because distant buyers have high search costs and may know less about the nuances of the local market. Our results, based upon a large number of single-family home transactions from the state of Florida, lend support to this hypothesis. Another related hypothesis is that buyers?? price expectations are anchored to prices they were accustomed to at their previous residence. Hence, if they come from high price markets they will tend to pay more for their new home. This hypothesis is also supported by our results.     

THE EFFECT OF TRADED OPTION INTRODUCTION ON SHAREHOLDER WEALTH

Several authors suggest that the opening of a market in traded options constitutes a “feasibility-expanding” change. In this paper evidence on changes in the price of underlying stocks at the time of option listing is examined to determine whether option listing constitutes such a change. Evidence supports the hypothesis that call option listing is feasibility expanding, that put option listing is not feasibility expanding, and that call listings closer to the initiation of organized option trading have a larger impact relative to later listings.     

Signaling effects of recurrent list-price reductions on the likelihood of house sales

Recurrent list-price reductions for a house may signal the impatience of sellers to conclude a sell transaction more quickly, leading to more visits and a higher likelihood of being sold (positive signal). Recurrent list-price reductions may also provide a market signal that the listing is problematic and thus harder to sell without a list-price reduction, leading to a lower likelihood of being sold (negative signal). Unlike standard survival analysis, we investigate which signal prevails using a joint frailty model that accounts for the interdependence among recurrent list-price reductions and the association between the recurrent reductions and the sold event. Our novel data set contains the time-dated recurrent list-price reductions for each house listed on the market. The results from the joint frailty model show time-varying negative impacts of list-price reductions on the likelihood of a house sale, supporting the dominance of the negative signaling effects of recurrent list-price reductions. Although listings with frequent list-price reductions are less likely to be sold, sold houses sell at a higher ratio of sold price to last list price, which incorporates current market conditions and fairer pricing, holding constant the initial list price and the aggregate list-price reduction from the initial list price.     

List Price Information in the Negotiation of Commercial Real Estate Transactions: Is Silence Golden?

We examine the use (and non-use) of list price information in the process of marketing commercial real estate. While housing market research suggests that list prices can serve as a strong anchor and/or signal, list price information is included in less than one-third of the commercial property sales and is less likely to be included as part of the sellers’ offering information for larger and more complex properties. Given the potentially powerful effect of list prices (first offers) on outcomes, the non-use of list price information is a puzzle. We speculate that the limited use of list prices may be due to the sellers’ interests in both maintaining their informational advantage and not truncating higher than expected offers, especially during periods of economic growth or with more complex properties. Using a two-stage selection correction model, we find that office properties which provide list price information are, on average, associated with lower price outcomes (ceteris paribus) and that these outcomes vary by price cohort and economic condition. It is important to note, however, that while these findings identify a correlation, they do not necessarily imply causation. Our results support the notion that asymmetric information and information signaling play a dominant role in explaining the sellers’ strategic non-use of list price information in the commercial real estate market and that the signaling effect is more pronounced in higher priced properties and during periods of strong economic growth.     

SHORT SELLING AND PRICE DISCOVERY: EVIDENCE FROM AMERICAN DEPOSITARY RECEIPTS

The underlying shares of some American Depositary Receipts (ADRs) can be short sold in their home markets, and others cannot. This institutional feature offers a unique opportunity to investigate the relation between short selling and price discovery. We hypothesize and confirm that ADR short selling on a U.S. exchange is more informative when the ADRs’ underlying shares cannot be short sold in the home market. These and related results suggest that short sellers make a significant contribution to price discovery. Short sellers’ trading activity, representing more than 20% of total ADR share volume, increases the benefits of cross‐listing on U.S. exchanges.     

双重上市、IPO抑价与大规模融资行为——来自中国公司IPO的证据

本文以中国1993～2009年期间的1158家IPO(其中A+H公司36家)为样本,实证检验了A+H双重上市与公司IPO行为之间的关系。研究发现:A+H双重上市与单位权益发行价、IPO定价效率、融资规模效率均显著负相关,表明A+H双重上市非但没有给公司带来IPO溢价,反而导致更高的IPO抑价。进一步分析表明,A+H公司的更高IPO抑价与其大规模的股票发行数量显著正相关,正是A+H公司的大规模股票发行迫使发行人和承销商采取低价策略以保证成功IP0,并导致A+H公司具有偏好在热市期上市的择时行为。     

The Impact of Range Pricing on Marketing Time and Transaction Price: A Better Mousetrap for the Existing Home Market?

In various markets around the country, some real estate professionals are employing a new pricing strategy that involves marketing homes for sale with a price range rather than a single asking price. This strategy is often touted as a mechanism that will attract more potential buyers to look at a house and thus result in reduced marketing times for existing homes, with prices determined by competitive forces. The purpose of this study is to empirically examine whether houses using range pricing, often referred to as value range marketing, sell in the same amount of time and sell for similar prices as those marketed in the traditional manner. Two staged least squares with a correction for sample selection and Weibull duration models are used to test the hypotheses, employing a sample of 5,852 residential houses that were sold during the period January 1999 to December 2000. In contrast to claims of the strategy’s proponents, the results indicate that houses take longer to sell when using the range pricing strategy after controlling for physical characteristics and market conditions. Furthermore, there is no evidence that this strategy has any significant impact on transaction prices.     

The Impact of Hurricane Mitigation Features and Inspection Information on House Prices

This paper examines the effect of hurricane mitigation features and their verification on the transaction prices of single-family homes. Some of these features are obvious to buyers and sellers (visible) and others are not easily observed (hidden). Prior research on the relationship between mitigation features and house prices has implicitly assumed the features are known and that buyers and sellers are equally informed. This paper contributes to the literature by examining the potentially different effects of the visible and hidden features, and the verification of each by professional inspection, on prices in an environment of incomplete and asymmetric buyer-seller information. Generally, findings are consistent with expectations – that visible mitigation features are positively correlated with price increases; that the effects of the visible and hidden features on price differ significantly; and that inspection information significantly increases the implicit price of hidden features. Interestingly, the inspection is found to also increase the implicit price of the set of visible features, suggesting the implicit prices of characteristics that are, or should be, visible to buyers and sellers may be affected by verification or disclosure.     

The Impact of Cross‐Listing on the Home Market's Information Environment and Stock Price Efficiency

We empirically examine changes in information asymmetry and informational efficiency of cross‐listed stocks in their home market around a cross‐listing in the United States. We estimate intraday market microstructure measures of information asymmetry and price efficiency, and find that a U.S. cross‐listing significantly improves the quality of a firm's information environment and stock price efficiency in the home market. This improvement is stronger for cross‐listings that take place after the adoption of Sarbanes‐Oxley Act. Our results demonstrate that stricter disclosure from a U.S. cross‐listing is beneficial, in line with the legal and reputational bonding hypotheses.