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

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  • Kenneth Soyeh
  • Jonathan Wiley
  • Ken Johnson

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. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Kenneth Soyeh & Jonathan Wiley & Ken Johnson, 2014. "Do Buyer Incentives Work for Houses during a Real Estate Downturn?," The Journal of Real Estate Finance and Economics, Springer, vol. 48(2), pages 380-396, February.
    • Handle: RePEc:kap:jrefec:v:48:y:2014:i:2:p:380-396
    DOI: 10.1007/s11146-012-9394-8
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