Study: Virtual Reality Tours Make Real Difference in Home Sales

Not only can virtual reality (VR) allow buyers to tour homes without physically stepping inside, but it also can help the homes sell faster, according to new research by a University of Texas at Dallas professor and collaborators.

The study, published in the June print edition of Information Systems Research, found that a VR tour shortens the number of days a house is listed for sale on average from 34 days to 19 days, said Dr. Zixuan "Maggie" Meng, assistant professor of information systems in the Naveen Jindal School of Management at UT Dallas.

The research sheds light on the contributions of nonimmersive VR, which does not require a user to wear a headset, and shows how the technology can be used in property sales, presentation and marketing high-involvement, or pricier, products, Meng said. The findings also help reveal how VR impacts home sales and shapes a buyer's experience.

"What we were trying to see is what exactly is this technology doing," she said. "Is it playing an informative role? We were looking to see if VR was distorting the market or helping the market through its informative role. We found it is essentially helping."

"We were looking to see if VR was distorting the market or helping the market through its informative role. We found it is essentially helping."

Dr. Zixuan "Maggie" Meng, assistant professor of information systems in the Naveen Jindal School of Management

House hunters can usually view photos or videos of homes for sale, but VR allows them to view rooms from different angles, providing not only an immersive experience but more information overall. While the time on the market decreased when VR was used, researchers found the technology did not affect a home's selling price.

"VR is not increasing the home's value," Meng said. "It's a tool to show you how the house looks."

VR has limitations, though, as it cannot improve the look of an outdated house or enhance its quality, according to study findings, so it is unlikely to affect an older home's selling time as much as a newer home's. On the other hand, VR provided a benefit to bigger houses that were more spacious.

"With VR, sellers cannot exaggerate positive features or downplay the flaws of a property to attract buyers," the study authors wrote. "The product information conveyed through VR is a more truthful reflection of a property's product quality."

When a real estate agent is unresponsive or unhelpful, researchers found that VR also can help fill an information gap.

"VR can sometimes complement the role of the agent," Meng said. "For example, if the agent is not high quality or good at providing information, then VR can help."

Anecdotal evidence about whether VR affects a home's sale price motivated the researchers to analyze data from China's leading real estate platform, which is similar to Zillow or Realtor.com. They calculated the length of time nearly 43,000 properties using VR stayed on the market from 2018 to 2019, as well as each home's final selling price.

The researchers concluded that real estate platforms could see financial benefits from including more homes with VR tours. For buyers, VR is an additional tool for house-hunting, particularly for larger, newer houses.

Senior author of the study is Dr. Yong Tan, chair of information systems and operations management at the University of Washington. Dr. Zhenbin Yan, assistant professor of information systems at Tongji University in Shanghai, is corresponding author.

Media Contact: Veronica Gonzalez, UT Dallas, 972-883-4358, [email protected], or the Office of Media Relations, UT Dallas, (972) 883-2155, [email protected].