Effects of Real Estate Brokers' Marketing Strategies: Public Open Houses, Broker Open Houses, MLS Virtual Tours, and MLS Photographs

The existence of the real estate brokerage industry is generally attributed to high transaction costs in real estate markets. In the case of brokers assisting sellers, brokers are typically expected to market sellers' properties to potential buyers, assist in contract negotiations, and coordinate post-contract tasks necessary to close transactions with the overall objective of maximizing gross sale proceeds to the sellers. Presumably, brokers can perform these duties at lower cost than sellers and sellers are willing to share the resulting surplus with brokers. In addition to cost efficiencies, brokers may also impact market outcomes. Numerous prior studies investigate whether or not the use of brokers as well as various broker actions, broker characteristics, and broker/seller legal relationships affect market outcomes in the form of price and/or, time on the market effects in the housing market. This study extends this line of research by considering price, time on market, and probability of sale effects in relation to four specific marketing strategies used, to varying degrees, by brokers representing house sellers: Public Open Houses, Broker Open Houses, MLS Virtual Tours, and MLS Photographs. The results indicate positive relationships between these strategies and house prices and mixed relationships between these strategies and probability of sale and time on the market.