Dual Agent Distortions in Real Estate Transactions

30 Pages Posted: 19 May 2015

See all articles by Ken H. Johnson

Ken H. Johnson

Florida Atlantic University - Finance

Zhenguo (Len) Lin

Florida International University (FIU) - Hollo School of Real Estate

Jia Xie

Government of Canada - Bank of Canada

Date Written: Summer 2015

Abstract

This article investigates price distortions in dual agent real estate transactions. Consistent with the literature, we find that, on average, dual agent has a null effect on sale price. However, dual agent distortions on sale price emerge after controlling for the ownership of the property. Dual agent is associated with a 6.35% price premium on agent‐owned properties, but a 25.10% price discount on government‐owned properties and a 5.14% discount on bank‐owned properties. In addition, market conditions also play an important role in such price distortions.

Suggested Citation

Johnson, Ken H. and Lin, Zhenguo and Xie, Jia, Dual Agent Distortions in Real Estate Transactions (Summer 2015). Real Estate Economics, Vol. 43, Issue 2, pp. 507-536, 2015, Available at SSRN: https://ssrn.com/abstract=2607751 or http://dx.doi.org/10.1111/1540-6229.12073

Ken H. Johnson (Contact Author)

Florida Atlantic University - Finance ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

Zhenguo Lin

Florida International University (FIU) - Hollo School of Real Estate ( email )

Miami, FL 33199
United States
3057799248 (Phone)

Jia Xie

Government of Canada - Bank of Canada ( email )

234 Wellington Street
Ontario, Ottawa K1A 0G9
Canada

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