QUICK HOUSE SALES - SELLER MISTAKE OR LUCK

Real estate brokers in the housing market are typically required to en ter their listings into the Multiple Listing Service (MLS) system with in a short period of time. Some houses sell immediately after being Li sted with a broker but before entering the MLS system. Given the role of the broker in the transaction process and the possible incentive to urge the seller to accept suboptimal offers, are these houses mispric ed? This paper examines the price of houses that sell quickly. A thoro ugh analysis reveals no significant differences between the equilibriu m price function for houses that sell quickly when compared with those exhibiting a normal marketing time. In addition, we provide evidence that owners of vacant housing will set lower reservation prices to ref lect comparatively higher holding costs vis-a-vis those occupied by ow ners. The results provide additional evidence that the MLS and real es tate broker and mortgage markets are, as an interrelated system, effic ient enough to protect buyers and sellers from abnormal pricing. (C) 1 995 Academic Press, Inc.