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Dual Agent Distortions in Real Estate Transactions
Author(s) -
Johnson Ken H.,
Lin Zhenguo,
Xie Jia
Publication year - 2015
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12073
Subject(s) - dual (grammatical number) , real estate , price on application , economics , monetary economics , government (linguistics) , microeconomics , financial economics , finance , cost approach , real estate investment trust , art , linguistics , philosophy , literature
This article investigates price distortions in dual agent real estate transactions. Consistent with the literature, we find that, on average, dual agent has a null effect on sale price. However, dual agent distortions on sale price emerge after controlling for the ownership of the property. Dual agent is associated with a 6.35% price premium on agent‐owned properties, but a 25.10% price discount on government‐owned properties and a 5.14% discount on bank‐owned properties. In addition, market conditions also play an important role in such price distortions.