The Impact of Contract Type on Broker Performance: Submarket Effects

22 Pages Posted: 28 Dec 2006

See all articles by Ronald C. Rutherford

Ronald C. Rutherford

University of Texas at San Antonio - Department of Finance

Thomas M. Springer

Florida Atlantic University - Department of Finance & Real Estate

Abdullah Yavas

University of Wisconsin - School of Business - Department of Real Estate and Urban Land Economics

Abstract

Rutherford, Springer and Yavas (2001) develop and empirically test a model that analyzes the effect the type of listing contract, either exclusive agency (EA) or exclusive right to sell (ERTS), has on the performance of the agent/broker. This paper extends the work of Rutherford et al. and looks at differences between housing submarkets delineated by price. The results show a selling price discount associated with both broker-effected and owner-effected sales for lower-priced houses with EA contracts. For higher-priced houses, there is no price advantage to an EA listing if the broker achieves the sale, but if the owner sells the house, there is a modest price premium associated with the sale. The primary implication of the results is that owners of lower-priced houses should be wary of alternative listing arrangements, namely EA contracts.

Keywords: listing contract, exclusive agency, exclusive right

JEL Classification: H31, P36, L85, P46,R20,R21,R31,D10,D11,D12,D13,R11

Suggested Citation

Rutherford, Ronald C. and Springer, Thomas M. and Yavas, Abdullah, The Impact of Contract Type on Broker Performance: Submarket Effects. Journal of Real Estate Research Vol. 26, No. 3, 2004. Available at SSRN: https://ssrn.com/abstract=954003

Ronald C. Rutherford (Contact Author)

University of Texas at San Antonio - Department of Finance ( email )

San Antonio, TX 78249
United States

Thomas M. Springer

Florida Atlantic University - Department of Finance & Real Estate ( email )

5353 Parkside Drive
Jupiter, FL 33458
United States
561-297-2914 (Phone)
561-297-3686 (Fax)

Abdullah Yavas

University of Wisconsin - School of Business - Department of Real Estate and Urban Land Economics ( email )

School of Business
975 University Avenue
Madison, WI 53706
United States

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