Raymond T. Brastow

On the Likelihood of a Transaction and the Amount of Time Provided the Broker to Sell Property

This work empirically investigates the effect of the amount of time provided the broker to market property (listing contract length) on the likelihood of a successful marketing attempt. Do shorter listing contracts increase broker motivation or can contracts be so short that marketing efforts are unlikely to result in a successful transaction? Empirical results of this study demonstrate that when the broker is provided a longer listing contract, the likelihood of a successful transaction increases - but at a decreasing rate. This result suggests that home sellers face a tradeoff when choosing contract length. Longer contracts provide more time to arrange a successful sale, but reduction in broker motivation reduces the probability of sale as contracts lengthen.

Estimating the Effect of Crime Risk on Property Values and Time on Market: Evidence from Megan's Law in Virginia

We examine neighborhood externalities that arise from the perceived risk associated with the proximity of a registered sex offender’s residence. We find large negative externality effects on a property’s price and liquidity, employing empirical techniques that include a fixed-effects OLS model, a correction for sample selection bias and censoring using a Heckman treatment, and a 3SLS model to account for simultaneity bias in the joint determination of a home’s sale price and liquidity. Additionally, we find amplified effects for homes with more bedrooms (a proxy for children) and if the nearby offender is designated by the state as “violent.�?

Seller Over-Pricing and Listing Contract Length: The Effects of Endogenous Listing Contracts on Housing Markets

This paper examines how seller pricing decisions influence listing contract length and how these decisions affect price and liquidity in housing markets. Because list price affects broker effort required to sell the property, brokers respond to seller overpricing by increasing the negotiated listing contract length. At the same time, sellers respond to longer listing contracts by adjusting their list price strategy. Both list price and length of marketing time affect broker sales effort and therefore a property’s realized selling price and liquidity. Analysis of house transaction data from Virginia indicates that greater over-pricing by sellers prompts brokers to pursue longer listing contracts, which subsequently lengthen marketing time but increase selling price. The results reveal a novel transmission mechanism from higher list price (which induces longer contracts) to selling price and liquidity. Copyright Springer Science+Business Media New York 2014

Two sides of dual agency: evidence from homebuyers and transactions

This study gains insights to the motivating causes of dual agency transactions in residential real estate by examining two distinct sources of data. The first is evidence from the National Association of Realtors® (NAR) homebuyers’ survey; the second is multiple listing service (MLS) transaction data. The survey evidence is used to examine buyer characteristics and search methods related to the outcome where a homebuyer is unrepresented by a buyer broker, who would exclusively represent their interests. Results suggest that certain factors contribute to both the likelihood that a buyer will be unrepresented and the incidence of dual agency, including homebuyer experience and inexperience, geographic familiarity by brokers and buyers and the channels used in marketing residential products to generate initial contacts with potential buyers. The matching of results from the empirical analysis using the MLS transaction data and the NAR homebuyer survey data adds confirmation to our findings. Even as dual agency creates opportunities for efficiency gain in the real estate transaction, the empirical results have implications for the consequences of homebuyer involvement in the initiation of dual agency, strategic behaviour recommendations for brokers as well as the possibility to policy adjustments.

Click and Think, Not Chalk and Talk: An Interactive Spreadsheet Approach for Teaching Economics

We present spreadsheets as a tool for teaching economics. In particular, we focus on how a price searching firm chooses its profit maximizing quantity. We then extend the example to competitors in a two-firm market. Students can alter the demand and cost structure to see the impact on market clearing. A classroom experience using the spreadsheets is described. An easy-to-use template simplifies creation of additional spreadsheets customized to professors needs. Alternately professors can modify the existing spreadsheets. A website allows readers to download all of the spreadsheets discussed.

Wealth Effects of the Drug Price Competition and Patent Term Restoration Act of 1984

In September of 1984, President Reagan signed into law a compromise bill that sped up and simplified the government certification process for generic drugs that are substitutes for patented brand-name drugs and in return granted brand-name manufacturers longer patent protec tion. This law, the Drug Price Competition and Patent Term Restoration Act of 1984, was the end result of a series of debates and proposed changes in patent protection laws that began in 1959. The final version of the law contained