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

Do Buyer Incentives Work for Houses during a Real Estate Downturn? 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

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

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Publisher
Springer US
Copyright
Copyright © 2012 by Springer Science+Business Media New York
Subject
Economics / Management Science; Regional/Spatial Science; Finance/Investment/Banking
ISSN
0895-5638
eISSN
1573-045X
D.O.I.
10.1007/s11146-012-9394-8
Publisher site
See Article on Publisher Site

Abstract

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.

Journal

The Journal of Real Estate Finance and EconomicsSpringer Journals

Published: Oct 31, 2012

References

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