THE MORE A HOME is advertised and the longer it remains unsold the easier it becomes for agents to persuade sellers to lower their prices. “Look, we’ve advertised your home and it hasn’t sold. The market is telling us it’s too dear.” What the agents are not saying is that the advertising itself may be the biggest reason the home has not sold.
In so many cases, if the home had not been advertised, the selling price could have been much higher. The advertising damaged the value of the home.
1. The Right Buyers Must See Your Home
The right buyers have to see your home. They have to come inside, they have to feel the atmosphere – or, if it needs repair, they have to feel its potential. They cannot get this feeling from an advertisement.
Think about it. What is the best feature of your home? It’s probably inside. Sure, it might look nice from outside, but you have to be inside to feel its atmosphere. Advertising kills atmosphere. It spoils the joyous surprise. Many buyers are turned off by the look of an advertisement and don’t enquire about homes which may have been perfect for them.
2. Disappointment and Anger
Agents are notorious for using “puffery” in advertising. Good features are exaggerated and bad features are ignored. As one buyer said, “I am sick of looking at homes which are nothing like what is described in the ads.”
Most real estate advertisements are misleading. In the Sydney Morning Herald (December 14 2002) one high-profile agent admitted that “95 percent” of real estate advertisements contained “exaggerated” information (read, misleading and deceptive). The Australian Consumers’ Association was reported as saying that such continual exaggeration is “outrageous”.
Exaggeration and “puffery” makes buyers angry. Even if they like the home, they will not like being tricked. If they are still interested, they will almost certainly offer a lower price – almost as revenge for being deceived.
3. Comparisons damage a home’s value
Typical real estate advertising allows buyers to make inaccurate price comparisons. Many homes look similar from the outside. But some owners have spent thousands of dollars internally, while others have spent almost nothing. When homes look similar in advertisements this damages the value of the better homes. The buyers compare the higher prices with homes advertised for lower prices. They often judge the value of a home before they see it.
4. Advertising to “no-buyers”
By mass advertising a home it comes to the attention of thousands of people who do not want to buy it. Aside from the wastage of money, this leads to criticism of the home. People who have no interest in buying a home are unlikely to praise it. On the contrary, many people ‘knock’ the home, saying such things as, “They must be kidding. They’ll never get that price.” The opinions of these non-buyers influence the opinions of the real buyers. This damages the value of the homes for sale.
The only people who should know that your home is for sale are genuine buyers.
5. What’s Wrong with the Home?
The more a home is advertised the less chance there is of getting the best price for it. Buyers wonder what is wrong with it. The home quickly acquires the lemon tag.
As one buyer said, “The more they advertise them, the less I want them.”
Many agents who have stopped typical real estate advertising have noticed three things;
They save their clients thousands of dollars.
They get better prices and
They sell more homes.
Maximum Financial Danger. The trap of maximum coverage.
Today there are a multitude of places to advertise. And each has a price. Attempts will be made to convince you that they all help get “maximum exposure”. This means maximum profit for the agents who receive kickbacks. These days agents can earn a bigger percentage commission from advertising kickbacks than from selling homes. Many agents are selling advertising as well as selling real estate.
There are major city newspapers, local papers, specialty papers, feature sections or liftouts in papers; and, of course, real estate magazines. Plus, many agents now produce – at great expense – their own magazines, each vying to be bigger, better and more frequent than the next.
As a homeseller, you can have colour brochures, floor plans, flyers, mammoth signboards filled with detail – even colour photos on the signs. Some agents charge for specialist copywriters to write advertisements. And the cost of a professional photographer.
But let’s not forget the Internet with “exposure” to millions of people. As if someone in Alaska will buy your home in Australia. Agents are quick to tell sellers that they must “expose” their home to as many people as possible. But “exposure” is like sunburn. The more you expose your home the more you burn your price.
Agents will argue that you do not know where the buyers are going to come from. Sure, you may not know where the buyers are coming from, but you know where they are coming to. They are all coming to your area.
But, just to make sure you are totally “sold” on ALL of these places, each has its own reason why you must use it. Be prepared, also, for that great sales convincer – the story of someone who sold for a great price because of one of these methods. And if you don’t use it, you could miss out. Just like the great stories about lottery winners which never mention the millions of losers, agents will tell similar stories with advertising.
As a homeseller you are the seller of a home, not the buyer of advertising. It cannot be stressed enough – all these advertising methods are not designed to benefit sellers.
“Maximum exposure” means maximum profit for everyone except the homesellers. For sellers, it means maximum cost, both in the cost of the advertising and in the damage to the value of their homes.
It’s bad enough to have the value of your home damaged through advertising, but it’s worse if you are tricked into paying for it. DON’T SIGN ANYTHING unless the agent can show you how to sell your home without damaging its value. And DON’T SIGNANYTHING which requires you to pay any money for advertising. All costs should be included in the agent’s commission which should only be paid after your home has been sold for the best market price.
Real Estate Advertising Solutions
Advertisements do not sell homes. The major attraction to buyers is the area. Research shows that 98 percent of homebuyers cite the area as their major reason for buying. They come to the area BEFORE they buy. So, all an agent has to do is attract the buyers who are looking in the area.
Attracting the Buyers.
Competent agents know how to attract buyers. They make it easy for buyers to buy. These agents will make themselves readily available to genuine buyers. They attract buyers to their offices and then they discuss the homes they have for sale.
The best agents maintain records of buyers. Many times, the agents will find the right buyer very quickly because the buyers are already “on their books”. This is intelligent marketing, the opposite to what most agents do.
Homebuyers spend an average of 107 days searching for the right home. These buyers are IN the area, looking around. They want that special home. And they will pay the best prices for the homes which they see as special.
Keep your Home Special.
One of the worst things agents do is allow homes to lose that special appeal. Freshness attracts buyers. Homes that have been rejected by many buyers are hard to sell. The same principle applies in most selling situations – fresh stock always gets the best price. Old stock gets the lowest prices.
Advertise to Buyers Only.
To protect the value of homes, an agent should only discuss a home with buyers who are likely to buy it. This is the opposite to the ‘hit and miss’ method typically used by agents who allow anyone to inspect homes.
Knowing that all buyers come into the area – and most spend weeks looking for that special home, here is what the best agents do: Attract buyers by appealing to them all. The agent then tells the buyers about homes which may suit each buyer. And then the buyers inspect the homes at times which suit them. The buyers buy homes that suit them, the special homes. Everyone is happy – the sellers who got the best price, the buyers because they found an agent who found them a special home. And the agent then gets paid for doing what the sellers want. It’s honest business where no-one gets hurt.
It’s your Home. You are the Boss.
You employ an agent to sell your home for the best price. You do not employ an agent to advertise your home, take kickbacks, damage the value of your home and then demand payment when your home does not sell or if it sells for thousands less than you expected. This is madness.
If advertising really was the cause of selling your home, why use an agent? Why not just advertise your home yourself and attract the buyers for yourself? Why pay twice – once for advertising and once for commission?
Homesellers are quickly waking up to what’s really going on – agents advertise to promote themselves, to pocket kickbacks, to attract more sellers and then to condition their sellers down in price. Sellers are now realising that typical advertising damages the value of their homes and leads to lower prices.
With the real estate market slowing down, it is vital that sellers understand how to get the best price in what is rapidly becoming a “buyers’ market”.
For more information on how to protect yourself from the tricks and traps of real estate, please read the book, Click here to view extracts.