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The Effects of Estate Sales of Residential Real Estate on Price and Marketing Time | SpringerLink

The Effects of Estate Sales of Residential Real Estate on Price and Marketing Time

Abstract

This study investigates price and time-on-market effects of estate sales of houses versus typical housing transactions using a sample of 180,921 sold properties. The hypothesis that estate sales sell at a discount and sell more quickly than typical houses is supported by the empirical results. The results indicate that estate sale properties sell at a 3.6% price discount and sell about 3.4% (i.e. approximately 4 days) more quickly.

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Notes

  1. 1.

    While many readers may be more familiar with the appearance of estate taxation in the economics literature, particularly in the strands of literature on intergenerational wealth transfers and optimal tax structures, the use of estate taxation in such contexts is even less related to the current study than the accounting treatment of the topic.

  2. 2.

    Special thanks to an anonymous reviewer for pointing out this potential alternative.

  3. 3.

    For more information on the Heckman test for selection bias, please see Heckman (1979), Maddala (1983), or Greene (1997).

  4. 4.

    The results of the first-stage probit are not reported due to space considerations; however, the results are available from the authors upon request.

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Correspondence to Marcus T. Allen.

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Benefield, J.D., Rutherford, R.C. & Allen, M.T. The Effects of Estate Sales of Residential Real Estate on Price and Marketing Time. J Real Estate Finan Econ 45, 965–981 (2012). https://doi.org/10.1007/s11146-011-9301-8

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Keywords

  • Estate sale
  • Intergenerational transfer
  • Hedonic model
  • Hazard model

JEL Classification

  • G29
  • J19
  • K34
  • R21
  • R31