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Working Paper 17-03: Under What Circumstances do First-time Homebuyers Overpay? – An Empirical Analysis Using Mortgage and Appraisal Data

Published: 4/3/2017
Author:

​Jessica Shui, Economist; Shriya Murthy, Economist

​Abstract:

In this paper, we study whether first-time homebuyers overpay for their homes and whether the magnitude of overpayment varies with the diligence of appraisers involved. We investigate whether sales price renegotiation mitigates the overpayment problem and assess the connection between renegotiation and the characteristics of the appraisers involved in the underlying mortgage transactions. This research is among the first to contribute both theoretically and empirically to the existing literature on first-time homebuyers. 

This paper was recognized with “Practitioner Research Awards” in 2017 by the American Real Estate Society. A revised version of this paper has undergone external peer-review and is published in an academic journal. Citation: Jessica Shui, Shriya Murthy. 2019. "Under What Circumstances do First-time Homebuyers Overpay?—An Empirical Analysis Using Mortgage and Appraisal Data." Journal of Real Estate Research, 41(1), 107-145. https://www.aresjournals.org/doi/abs/10.5555/0896-5803.41.1.107

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