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2009 News Releases

Research paper by Longwood professors receives national award

September 3, 2009

A research paper co-authored by two Longwood University College of Business and Economics faculty members has been selected the best in its category by the American Real Estate Society (ARES).

Dr. Bennie Waller, associate professor of finance and real estate, and Dr. Ray Brastow, associate professor of economics, claimed the top honor in the Real Estate Brokerage/Agency category for their paper "The Probability of Dual Agency." They presented the paper at the 2009 ARES meeting in April in Monterey, Calif., and learned of the award July 27. The award, which includes a cash award and recognition at the 2010 ARES annual meeting, is sponsored by the Paul J. Everson Center for the Study of Real Estate Brokerage/Agency and Markets at Cleveland State University.

The paper empirically investigates problems that occur when the same real estate agent represents both the seller and the buyer. It examines 12,070 real estate transactions from a central Virginia Multiple Listing Service, of which some 32 percent involved dual agency. Real estate transactions completed "within the first or last thirty days of the listing contract are likely to be associated with dual agency," the study found.

"This is without question an important validation of our current academic research program," Waller, a 1990 Longwood graduate, said of the award. "Several of the top publishers in brokerage literature presented papers in this category. The people who present at this conference are mostly from doctoral institutions, so winning this award tells us that our research is well received by an important group of peers. Ray and I have been invited by ARES to submit the paper for publication in one of their journals."

He and Brastow have collaborated for about two years and currently are working on a number of research projects related to incentives for real estate sellers and brokers. Many of these projects involve Longwood students. In addition, they are working and co-authoring with faculty at other institutions as well.

"Our research focuses on issues related to sellers and brokers and their various incentives," Brastow said. "Many, but not all, of our projects have to do with principal-agent incentive problems. This issue is common in many economic settings, and we have found that in real estate there is evidence that agents and brokers have incentives that occasionally differ from those of sellers. It does appear there are some inconsistencies of incentives or conflicts of interest.

"We found evidence in the study that when the listing agent also represents the buyer (dual agency), the home winds up selling for a larger discount from the listing price," he continued. "Is the lower price due to a conflict of interest? We can't say for sure, but the people who gave us the award found this to be an interesting situation."

Waller and Amy Swayne, a 2008 Longwood graduate who is now in the university's MBA program, co-authored a paper on the same general topic that was presented to a 2007 meeting of the American Society of Business and Behavioral Sciences.

Brastow and Waller co-authored another paper that was presented at this year's ARES meeting, "Broker and Seller Incentives at Listing: Simultaneous Determination of Contract Length and Listing Price." An earlier version of this paper was presented in 2008 and has been reprinted, in synopsis form, on the web sites of Penn State and Texas A&M.

Waller chairs the Department of Accounting, Economics, Finance and Real Estate. He received his bachelor's of business administration from Longwood and was a student of Brastow's.