The online auction is becoming increasingly popular in e-commerce, which allows to sell a product to the buyer with the highest bid. However, the lack of authentic product details for a thorough evaluation still poses challenges to its success. Recently, virtual reality (VR) is introduced to online auctions. We employ a unique dataset to investigate the effects of VR on auction outcomes and bidding activities. Results show that VR enhances buyers’ bidding competition, which in turn increases auction success and price, resulting in a competitive effect. Additionally, we find VR boosts buyers’ strategic responses to the bidding war, leading to a late-bidding effect. Findings contribute to both the theory and practice of VR and online auctions in selling houses.