Optimal Real Estate Pricing and Offer Acceptance Strategy

We consider the problem of choosing best a set sequential offers proposed by market in house-selling process. During each decision epoch, seller sets listing price, observes and decides whether to accept maximum one or reject all them. model fixed holding cost, which is constant marketing cost searching for buyers, variable that proportional number received during epoch. The objective maximize expected revenue. Most previous studies assume stationary known distribution from buyers’ are generated reflects valuation house. In contrast, we incoming offers, individual offer generated, affected seller’s price (i.e., price-based demand response). Thus, propose new approach selling policy, consists acceptance threshold period. derive optimal policy apply it scenario involving sale residential properties Ames (Iowa), yields results consistent with empirical observations.