Does Bankruptcy Identify a Type Of Real Estate Agent or a Stress-Induced Change in Performance?

Abstract

Real estate agent experience, characteristics, selling strategies, and the structure of incentives affect sales performance. This paper also considers how stressful events in private life, like bankruptcy and criminal records, affect productivity. The empirical approach accounts for the simultaneity of price and liquidity in search markets. Full sample and repeat sales analyses sort out the extent to which these events identify different types of agents versus temporary changes in behavior as well as specific responses in terms of choice of clients versus how those clients are served. The analysis pays particular attention to differences in listing and selling agents. Bankruptcy and crime reports are different types of events and have different effects on agents. The results indicate that bankruptcy (or crime report) signals a certain type of agent with particular business practices who also change their behavior during temporary periods of stress.