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Contract Expiration and Sales Price

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  • Asabere, Paul K
  • Huffman, Forrest E
  • Johnson, Rose L

Abstract

This article represents the first empirical attempt to detect the relationship between sales price and listing (or contract) period. Specifically, we examine the relationship between sales price and contract expiration days. Our hypothesized positive relationship between sales price and contract expiration days is borne out by the results of this study. These results show that the home seller is able to exact a price premium of 0.04 percent per contract day that he-she is able to preserve. Alternatively stated, he-she will concede a price discount of 0.04 percent per day, on average, as the sales contract approaches its expiration. Simple analyses of time on the market (TOM) without controlling for listing period may yield misleading signals. Copyright 1996 by Kluwer Academic Publishers

Suggested Citation

  • Asabere, Paul K & Huffman, Forrest E & Johnson, Rose L, 1996. "Contract Expiration and Sales Price," The Journal of Real Estate Finance and Economics, Springer, vol. 13(3), pages 255-262, November.
    • Handle: RePEc:kap:jrefec:v:13:y:1996:i:3:p:255-62
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    Cited by:

    1. Xin He & Zhenguo Lin & Yingchun Liu & Michael J. Seiler, 2020. "Search Benefit in Housing Markets: An Inverted U‐Shaped Price and TOM Relation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(3), pages 772-807, September.
    2. David Koch & Gunther Maier, 2015. "The influence of estate agencies’ location and time on Internet," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 35(2), pages 147-171, October.
    3. Robert J. Shiller & Allan N. Weiss, 1998. "Moral Hazard in Home Equity Conversion," Cowles Foundation Discussion Papers 1177, Cowles Foundation for Research in Economics, Yale University.
    4. Stanley McGreal & Alastair Adair & Louise Brown & James R. Webb, 2009. "Pricing and Time on the Market for Residential Properties in a Major U.K. City," Journal of Real Estate Research, American Real Estate Society, vol. 31(2), pages 209-234.
    5. Raymond Brastow & Thomas Springer & Bennie Waller, 2012. "Efficiency and Incentives in Residential Brokerage," The Journal of Real Estate Finance and Economics, Springer, vol. 45(4), pages 1041-1061, November.
    6. Randy Anderson & Raymond Brastow & Geoffrey Turnbull & Bennie Waller, 2014. "Seller Over-Pricing and Listing Contract Length: The Effects of Endogenous Listing Contracts on Housing Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 49(3), pages 434-450, October.
    7. Charles Ka Yui Leung & Youngman Chun Fai Leong & Ida Yin Sze Chan, 2002. "TOM: Why Isn’t Price Enough?," International Real Estate Review, Global Social Science Institute, vol. 5(1), pages 91-115.

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