Thank you to those who have asked questions and allowed me to help them.
There was one question that I received which is a beauty – and I wanted to respond to this.
- How much money should the home owner spend when marketing their property for sale?
This topic gets me fired up!
Just recently, I happened to catch a real estate agency’s radio ad which focused on marketing. Two statements were made. Firstly, ‘You can’t sell a secret’ – followed by this; ‘You should allow 1% of the value of your property for marketing’.
In reply, no, you possibly can’t sell a secret. However, you can certainly sell a property for a good price when it is special. Once the world knows about it and no one is buying it, its expensive overexposure could hurt its price – just be careful. But 1% of its value for marketing, really?
This led me to do some research. The agency on the radio had, at the time of preparing this newsletter, 160 properties on their website for sale at a combined asking price of $575 million. Now, if each of these sellers pay 1% of its value in advertising, that is $575,500 of money paid by sellers to the agency – without a sale being made.
With generous incentives and discounts offered by advertising companies to agencies for bulk buying, I would be quietly confident that a tidy profit is being made by the agency, just in selling advertising let alone selling homes.
So, who now is paying for those radio ads? A comprehensive marketing campaign costs about $1500 (don’t take a short cut), but when on average, each seller is therefore paying almost $4,000 in marketing, as a home seller you would have to ask the question – ‘Where is my money going?’ Is it to pay to find a buyer? Or is it paying for radio ads that build agency profile and agents profiteering from selling advertising space, not homes?
Have you ever heard an agent say ‘I think I just might have the perfect buyer for your property’? Then why is it that agencies charge to find a buyer when they already have one? It doesn’t make sense!
But what it does do is this – if the property doesn’t sell, or the agent can’t fulfill what they said they could, then only the seller can get financially hurt, the agent is ok (with the advantage of potentially some advertising profile and profit on the side).
So here is a novel idea – Pay the agent to do the job you employed them to do – Sell your home.
I ask you this question:-
Would you be happy to pay a plumber for materials who then showed up without them and couldn’t do the job? What about handing your money over to a food outlet who took your money and then said, ‘Sorry there is no food left’ and then they kept your money! How would you feel?
So why are home sellers agreeable to paying thousands of dollars up front or in ongoing costs in the hope or expectation of a completed job? I can answer that for you if you would like me to.
If the agent truly believes in the marketing program they have for you, they will give it to you, not sell it to you. Agree on a fair value commission for their services, expertise and ultimately the result they produce.
Just be sure where your money is going!
Finally, thank you to my team of dedicated agents and support staff. 34 sales in 60 days, oh and no seller paid for our radio ad or the promotion of our agency. In fact, they didn’t pay any advertising costs at all.
Love the questions, keep them coming. If you have specific questions about your property and situation, please call – I would love to help.
Director / Sales Manager
See how we advertise properties on Facebook