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The Journal of Real Estate Finance and Economics

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30-06-2022

The Impact of Virtual Marketing Strategies on the Price-TOM Relation

Authors: Kelley Cours Anderson, Julia Freybote, Kerry T. Manis

Published in: The Journal of Real Estate Finance and Economics | Issue 2/2024

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Abstract

Virtual tours such as pre-recorded videos or self-guided virtual reality (VR) tours represent marketing strategies that agents can use to promote homes for sale. Assuming agents aim at maximizing their net commissions, we expect virtual tours, which require more agent effort and are more costly, to be used for homes that are difficult to show due to being owner- or tenant-occupied. Using 34,359 single-family transactions from multiple US markets, we show that virtual tours impact the sales prices of occupied homes (1) directly (main effect) and (2) indirectly through an interaction with time on market (TOM). However, this impact differs in directionality and size across price segments and occupier type. The use of virtual tours has no effect on the sales prices of vacant homes. Our results suggest that virtual tours are effective strategies to overcome the difficulty of showing homes and moderate the price-TOM relation.

previous article Time on Market and the Cash Discount for Condos

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Based on interviews with residential agents when data was collected, professional photos with a video range from $150 to $350 and a virtual tour adds another $100 to $300. This is in addition to other marketing expenses occurred to an agent such as staging.

For a review of the pull and push strategy in the context of residential brokerage and a review of related studies, see Gwin, Ong and Gwin (2002).

https://www.zillow.com/sellers-guide/real-estate-photography-tips/

Please note, the MLS dataset does not provide any information on whether a property has an accessory dwelling unit (ADU), which can be rented out. We can only distinguish whether the single-family home itself is owner- or tenant-occupied.

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Title: The Impact of Virtual Marketing Strategies on the Price-TOM Relation
Authors: Kelley Cours Anderson
Julia Freybote
Kerry T. Manis
Publication date: 30-06-2022
Publisher: Springer US
Published in: The Journal of Real Estate Finance and Economics / Issue 2/2024
Print ISSN: 0895-5638
Electronic ISSN: 1573-045X
DOI: https://doi.org/10.1007/s11146-022-09908-x

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