Volume 26, Number 3, 2004 of the Journal of Real Estate Research

 
The Impacts of Contract Type on Broker Performance: Submarket Effects

Abstract: We examine

Abstract: Rutherford et al. (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. (2001) 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 exclusive agency contracts.