Properties that Sell at or above Listing Price: Strategic Pricing, Better Broker or Just Dumb Luck?

A surprisingly large number of houses sell above listing prices in a wide range of markets and in all market conditions. The question is: why do some houses sell above listing price while neighboring similar houses do not? Is it that sellers misprice the property at the outset, work with real estate brokers who are particularly skilled at bringing in high value buyers, or are simply lucky to have high value buyers show up during the marketing period? This paper makes two contributions. It offers an empirical framework to isolate seller and agent influences on the likelihood of selling above listing price. It also offers empirical evidence about the seller, agent and market determinants of sales above list across all market phases. Sellers who do not follow their agent’s guidance and under-price their property increase the likelihood of selling above list. Agent experience also increases the likelihood. We also identify specific marketing strategies and agent incentives that do and do not appear influence the likelihood of selling above listing price once the other seller behavior, agent characteristics, and market conditions are taken into account.