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Abstract
The average homeowner stays in their home for 8 to 13 years , going through the sales process an estimated 3 to 5 times. The primary residence is often the largest, if not the largest, asset homeowners possess. Comprehensive knowledge of how their decisions in the sales process affect transaction prices, market liquidity, and the probability of a successful sale could be valuable. This dissertation examines two decisions made by sellers during the home-selling process and how those decisions impact transaction price, market liquidity, and the probability of a sale. The first decision studied is whether to relist a property after an initial listing terminates without a sale. Utilizing a comprehensive dataset of over 670,000 residential properties, this dissertation fills a gap in the existing housing literature, which has largely overlooked the implications of prior listings on sale outcomes. Measuring days on the market by only accounting for the sold listing and failing to include days on market of the initial listing produces biased results regarding the impact of relisting. By accounting for the differences in the distribution of days on the market between single listings and relistings, as well as the method of listing termination, this study provides the most comprehensive analysis relistings.
The second decision in the study is whether to list with an offer deadline. Homeowners are constantly looking for the most efficient method to maximize transaction price, liquidity, and probability of sale when selling their properties. Three marketing mechanisms are available to sellers: For Sale by Owner, broker-represented sales, or auctions. Almost 90% of sellers engage brokers to leverage their expertise and reduce the sellers' workload. Using offer deadlines in listings mimics some fundamental features of auctions without binding sellers. Sellers benefit from increased transaction prices, reduced time on the market, and a higher probability of sale.
These findings contribute to a deeper understanding of the real estate market's complexities, offering insights for homeowners, real estate professionals, and policymakers.