Working Hard or Hardly Working? Competition’s Effect on Real Estate Agent Effort

Abstract

Residential real estate transaction data from Savannah, Georgia, from 2008 to 2021 was used to explore the connection between the volume of competing homes for sale at the time of listing and the effort level of the listing agent. Five proxies for agent effort were identified and, controlling for price, characteristics of the house, timing of the sale, and agent, results suggest that a greater volume of competing homes led to increased agent effort. A 1 standard deviation increase in the number of similarly priced concurrently listed homes resulted in a 3.7 to 12% increase in agent effort, as measured by proxy variables at their means. This result was robust over all five proxies for agent effort and the effect was noticeably larger for competing homes in a similar price range as compared to those in different pricing segments. Sentiment analysis was also conducted on publicly displayed agent property descriptions and indicated that public descriptions became more positive in tone as the volume of competing listings increased.