By Andrew Trim
Author of Real Estate Dangers
Marketing is not cheap. That’s why so many property advertisements have agents’ faces and agent names so predominantly displayed. If agents’ marketing costs can be subsidised by sellers, why not? Although the house is advertised, agents are also marketing themselves to other potential sellers. One major website will not allow agents to have their name displayed on an advertisement unless it is upgraded, providing further incentive for agents to convince sellers to pay for an upgrade.
By charging advertising costs upfront, agents achieve the ultimate trifecta: they minimise their exposure to financial loss, gain a more motivated seller and promote themselves in a crowded marketplace. All this for free – well, free for the agent.
A seller would define a successful advertisement as facilitating a sale, whereas an agent regards a successful advertisement as facilitating the growth of their profile. Agents love that sellers pay for large advertisements with their name on them. Why wouldn’t they encourage it?
Ask these questions before paying for increased views and enquiries:
• Do increased views and enquiries help with finding a buyer?
• Do they increase the final selling price?
• How many interested buyers does a property need for it to sell at the best price?
• Will the right buyer find the property regardless of an advertisement’s size and position?
Most buyers begin their property search online. After registering for regular updates from at least two of the major real estate websites, they receive a daily email with new listings, regardless of whether the owner of these properties paid for an upgraded advertisement.
Instantly, most genuine buyers will see all new properties that suit their criteria.
If an agent recommends you pay for an upgraded listing on a real estate advertising website, this simple check will help you decide if it’s worth the cost. Carry out a property search for comparable properties to yours on a property advertising website using the following steps:
1. Select your suburb – remove surrounding suburbs.
2. Put in your type of property (house or unit).
3. Add the number of bedrooms.
4. Set price criteria that straddle your expected price by about 10 per cent. For example, if your expected price is approximately $425,000, search from $400,000 – $450, 000.
It’s rare to come up with more than 20 properties, and often there will be fewer than 5.
Further to the lack of properties for sale, there are two reasons the upgrade becomes redundant. Both involve the way in which a buyer searches for properties.
Firstly, property searches carried out on tablets or phones are generally done through the website app via a map search. A suburb is entered, the map selected and each property shows up. Click on the highlighted property and the details are revealed. At the time of printing, this search method gives no priority to upgraded properties.
Secondly, when conducting a traditional search, individual buyers can sort properties in numerous ways, the default being ‘most relevant’. However, most buyers select ‘date (newest to oldest)’ because this shows any new properties at the top of the search, regardless of any upgrades.
That’s the great advantage of internet advertising for buyers. When searching for property, buyers see what they are looking for, regardless of overall advertisement position. It’s the quality of the marketing that counts, not the size and position of the advertisement.
Are you interested in reading Real Estate Dangers by Andrew Trim? Contact us to receive your free copy. Email: mail@goulburnre.com.au or call 02 4822 8711