What does a Lockbox Matter?

A couple of weeks ago I spent literally all of one day and part of the next gathering up lockboxes off all my listings and then returning and installing the newest Supra iBox BT. I drove through Nampa, Caldwell, Wilder, Melba, Kuna, Meridian, Eagle and Boise. I made another trip yesterday exchanging a few more stragglers, the ones from Glenns Ferry and Kimberly as well the one hiding beneath my seat! I began to wonder if it was all worth it. Although I do like opening them using the bluetooth on my phone, instead of carrying another ekey for that function. Then I read this article on how the newer more sophisticated boxes impact marketing time and price. Imagine that.

Does the choice of a lockbox matter?  Do the older type lockbox systems influence the final transaction price or the marketing time of property?  These questions are often pondered by real estate professionals.  Older key and combination systems are low tech, easy to employ, and less costly to the broker.  Newer electronic lockboxes are often more complicated, provide additional information by way of technology, and are slightly more expensive than their low tech counterparts.  The trade-off is therefore between ease of use, information, and cost of operation.

If the different lockbox systems do not influence transaction outcomes (price and marketing time), then the choice of the lockbox system can be left up to the broker without costs to the sellers of property.  On the other hand, if one system produces either a pricing discount or extended marketing times, then brokers need to be aware of these differences in order to better serve their clients.

Research

Recent research by Benefield and Morgan answer these questions.[1]  The researchers directly test for the impact of lockbox type (newer electronic versus older systems) on property price and property marketing time.  After controlling for other difference in listings such as location, age, size, seller motivation, and quality, Benefield and Morgan find that older lockbox systems, on average, do not influence the time it takes to market property.  Property pricing, however, is another matter.  Specifically, Benefield and Morgan find a negative impact on price from the use of the older lockbox system.  More to the point, older lockbox systems appear to not influence marketing time but result in lower selling prices.  The pricing discount was a staggering seven percent on average.[2]

Implications

There is now statistical evidence (not just professional speculation) that indicates the inferiority of the older lockbox systems.
Therefore, wherever financially practical, brokers should stop their use of older key and combination lockbox systems in favor of the newer electronic systems.  It now appears that these newer electronic lockboxes lead to a better sharing of information and feedback between listing and showing brokers resulting in better prices.