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The Journal of Real Estate Finance and Economics

, Volume 48, Issue 2, pp 380–396 | Cite as

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

  • Kenneth W. Soyeh
  • Jonathan A. Wiley
  • Ken H. Johnson
Article

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.

Keywords

Incentives Brokerage Residential Transactions Overpricing 

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Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  • Kenneth W. Soyeh
    • 1
  • Jonathan A. Wiley
    • 1
  • Ken H. Johnson
    • 2
  1. 1.Department of Real Estate, J. Mack Robinson College of BusinessGeorgia State UniversityAtlantaUSA
  2. 2.Department of Finance and Real EstateFlorida International UniversityMiamiUSA

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