The Role of Bidding in Determining Sales Price for Residential Property

Theoretical models of the house selling process have shown the number of bidders involved to be an important factor in explaining sales price; however, empirical models have not included specific variables capturing the dynamic process that occurs during time on the market (TOM). This paper addresses this gap by including explicit bidding variables, as well as TOM in a hedonic pricing model. The results confirm the importance of the number of bidders in understanding the direction of the relationship between price and TOM, identifying that the outcome of multiple bidder sales are more predictable than properties sold with a single bidder.