Selling Price Discount

Speaker: Dr. Paul Anglin, Department of Marketing and Consumer Studies, College of Business and Economics, University of Guelph

THE SPEAKER

Paul Anglin has worked as a tenured Associate Professor at the University of Guelph (Department of Marketing and Consumer Studies, College of Business and Economics) since 2005. Before that, he worked in Canada and the United States, as well as being a visiting scholar in Poland and Singapore.  He holds a Ph.D. from the University of Western Ontario in Economic Theory.

His best known research focuses on issues related to the processes of buying and selling property, with a special emphasis on “time-on-market” and on the role of real estate agents. He has contributed ideas to a diverse set of topics including price dynamics, price indices, information asymmetry and physics. His work, using both empirical and analytical methods, has been published in leading refereed journals such as the Journal of Political Economy, the Canadian Journal of Economics, Canadian Public Policy, Real Estate Economics, Journal of Real Estate Finance and Economics, the Journal of Real Estate Research and many others. He is currently studying questions related to corporate governance, to whether a seller should use an auction or a bargaining process to set a selling price and to the best methodology for studying how long it takes to sell property.

Since graduating, he has taught a wide range of courses. Most of them are related in some way to decision-making and markets. After listening to students and other smart people, he asserts that nearly all of the ideas, applications and techniques discussed in these courses can be summarized by five basic principles. These principles represent features shared by a surprising range of issues.  Resolving most mistakes of analysis or apparent paradoxes in a market-based environment begin by identifying how one or more of these principles was misunderstood.

THE TALK

The selling price discount is a metric which invokes several different aspects of a real estate market, yet is rarely studied directly.  Practitioners use the average discount to summarize changes in market conditions.  Since it uses information on the list price, the discount for an individual seller depends on the selling strategy.   Therefore, the discount may also vary with the seller’s bargaining strategy and with time on market.  Some academic work treats the discount as irrelevant because markets are deemed to be sufficiently competitive.

This exploratory study uses some data from Toronto Canada to investigate changes in the distribution of the discount across sellers at different times.