Salesperson Bonuses and Their Impact on Residential Property Price and Time on Market

This paper investigates the impact on both sales price and marketing time of offering a bonus to the selling broker of property. Recognizing and controlling for the different incentives inherent in pricing versus exposure listing strategies, this article employs hedonic pricing and time-on-market (TOM) estimations to uncover the relationship among property price, property TOM and salesperson bonuses. The results suggest that properties offering a bonus experience both a price discount and extended TOM.This article is the winner of the Real Estate Brokerage/Agency Manuscript Prize (sponsored by the Center for the Study of Real Estate Brokerage/Agency at Cleveland State University) presented at the 2003 American Real Estate Society Meeting.