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

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.