A comparison of banks and real estate intermediaries as house sellers

Abstract

The foreclosure crisis associated with the banking crisis transformed banks in the hardesthit countries into real estate brokers. The main novelty of this paper is to study banks as sellers of their own foreclosed properties and compare banks’ sales outcomes with those of traditional agents in the real estate market. We compare the list price, selling price, time on market and price discount of traditional real estate companies (TRECs) and bank-owned real estate companies (BRECs). We fnd evidence of a higher selling price, higher list price and longer time on market (TOM) for BRECs than for TRECs. Our fndings are consistent with BRECs displaying greater patience as well as lower risk aversion. However, these explanations are not enough to fully account for the magnitudes of the coefcients. [...]