6. Marketing

It only takes one buyer to buy a house, and attracting the one that will pay the most is what marketing is about. The purpose of marketing is to create awareness among buyers, to generate a sense of competition and urgency so that buyers feel a compelling reason to investigate the property, and to create a sense of value so that buyers believe the property is worth making an offer for.

The marketing aims to get buyers to the open home or inspection. Then it is up to the house to strut its stuff. Not all houses suit all buyers, so we want the right buyers to be coming through the property. If the marketing is on target, and the property is well-priced, then you should get offers early.

After selecting your real estate agent and deciding on the method you’ll use to sell your property, the next decision is to decide what advertising will get you the most buyers through the door. Remember Price Rule #1:

PRICE RULE #1: The price you get for your property will be directly related to the number of buyers interested in, and competing for it.

Below are the most common marketing components used in property marketing. Your agent will undertake some of these on your behalf at no cost. To generate widespread awareness and competition among buyers, however, it will be necessary to buy advertising.

MarketingOptions

 

DECISION 3: WHAT ADVERTISING WILL BE COST-EFFECTIVE?

The type and amount of advertising will depend on the target market for your property. Are you targeting a large audience of first-home buyers? Or are you targeting a small group of high wealth investors? A prestige property will require more advertising to find the smaller percentage of people with the money to spend. Advertising in international magazines might be appropriate for a multi-million dollar mansion but not a one-bedroom budget apartment.

It would be great if the more money spent on advertising the higher the sale price achieved. However, the rule of diminishing returns applies and there is a point at which spending more on advertising will not provide any benefit.

adverts

It is necessary to decide on a case-by-case basis how much advertising should be spent. The important thing is to have an appropriately targeted and adequately funded campaign. Some agents suggest a general rule of 1% of the value of a property in advertising spend. For a $600,000 property, that would equate to $6,000. I have seen campaigns for homes at this level costing over $20,000. Conversely, I’ve seen million dollar properties sold with less than $3,000 advertising. If the advertising is well designed and well targeted, a relatively modest expenditure can provide a significant return in terms of buyer awareness and interest.

These days the essentials of a marketing campaign include:

  • listing on websites such as Domain.com.au and Realestate.com.au
  • professional photography
  • signage outside your property
  • a floor plan
  • printed drop cards or flyers

The cost of those essentials is usually between $1,000 and $2,000.

Newspaper advertisements are expensive and, given their inherent limitations and today’s prevalence of online, are of questionable effectiveness. There will, of course, always be the occasional buyer who is not actively looking, but sees a property when they are browsing Saturday’s paper. But serious house hunters use the internet.

Why do I need professional photographs?

Professional photography is essential for displaying the value of your property.

Perhaps the best way to demonstrate the value of a professional photographer is to go online and look at photos of properties offered for sale direct by an owner rather than through an agent.

Sellers who think amateur photographs will adequately convey the value and quality of their home do not understand that poor photos detract from the perceived value of their house and deter potential buyers. Below are some real examples sourced from the internet, which I have not altered in any way. Buyers will not be impressed by clutter, blurry images, poor staging, lack of perspective and poor colour definition. They will tend to skip over such properties for others presented better.

 Badphoto1  Badphoto2

 

Now, compare these with the professional photographs below. In the professional photos the proper lighting enables rooms to be viewed as we would see them with the naked eye. The outside is visible, and the wide-angle lens designed for real estate photography captures the whole room.

Bisley-1762Eight2

Usually, the number of photos used in an online listing will be between 12 and 22. The bigger and more prestige the property, the more photos. Twilight photographs can add an even more impressive dimension.

12-Bisley-dr-_00012

Can they “Photoshop” the images to improve the look of my house?

It is considered acceptable to edit photos to overcome weather limitations. After all, grey skies have nothing to do with the features of the house itself. It is also considered acceptable to green up a dry lawn. What photo editors cannot do is cover up a feature of your property to mislead people. They cannot remove the large crack in the driveway, or the rusty guttering.

Online Listings

Serious buyers on the hunt for a house will use online listings as the predominant method to search. The main weakness of online listings is that the search capability is only as good as the data entered, and some agents do not provide comprehensive listing details. For example, if you do a filtered search on properties with swimming pools, many homes with pools will be filtered out because the agent didn’t specifically check the box for pools.

Once your property is online, do some filter searches for key characteristics and if your property does not show up, tell the agent to get the ad fixed up.

The main online advertising options in Australia are Realestate.com.au (owned by News Corporation) and Domain.com.au (owned by the Fairfax Group). Lesser known websites currently have a lower response rate and are of inconsistent quality, and may be poor at updating listings. Some are improving however, and agents will be aware of the best ones.

The levels of advertising in Realestate.com.au are shown below. Prices are not quoted here because they can vary between agency due to different package deals offered, and on whether the advertisement is placed for 30 days or 45 days. Domain uses similar tiers for its listings.

Premiere Listing

Premiere Listings are listed first and are the largest size. They are significantly more expensive than the smaller alternatives and are more common in suburbs with a very high turnover of properties, and a great deal of competition.

Premiere

Highlight Listing

Highlight listings are the next premium level. They are becoming more commonly used, and some agencies place all their listings this way for 30 or 45 days.

Highlight

Feature Listing

Feature Listings are more commonly used in suburbs and towns with less expensive properties, and where there is less competition. They are slightly larger than Standard Listings and shaded.

Feature

Standard Listing

Standard Listings are the basic level which properties can be advertised at.

Standard

Newspapers and Magazines

In my view, newspaper advertising these days is not terribly cost-effective. Newspaper advertising reps claim that research shows that 59% of buyers use both online and print, and that combined online and print advertising will achieve 20% greater sale potential.

The reasons why I don’t believe newspapers are as effective as online for property in today’s world are:

  1. Property listings in newspapers cannot be searched by filtering, only by browsing, and this is very inefficient in terms of time. Most serious buyers want to find their properties fast and don’t want to have to wade through the clutter.
  2. Display advertising is not arranged in a user-friendly fashion. It is prioritized by agency, not property or location. As a result, newspaper advertising is more about promoting the agency brand as it is about promoting properties. After all, if they wanted to promote properties, they would be arranged by location, which is how most house hunters look.
  3. Most print advertisements have one to three photos. Online will usually have more than a dozen, plus a video, plus a floor plan.

There will, of course, always be readers who enjoy browsing and on the odd occasion a reader who is not actively searching will see a property advertised in the newspaper and will end up buying it.

Expensive properties may benefit from the exposure to a wider audience that a newspaper gives. So while I don’t rule out newspaper advertising completely, I would caution against spending large sums on it.

 

Printed Flyers and Drop Cards

Printed material from real estate agents usually arrives in your letterbox and if you are not thinking about buying or selling property it probably goes in the bin with the junk mail. However, if you are actively buying or selling you are likely to take more notice.

Drop cards are printed cards that are designed to notify people in the local area that your property has just come on the market. Most people buy their next home in a 6 kilometre radius of their existing home. Many buy where they have friends or relatives. Up to 5% of buyers first see the property they buy from a drop card. Here is an example:

Bisley8o Bisley8o2

 

Drop cards are also a way of agents promoting themselves in their territory. Agents often drop flyers listing sold properties to demonstrate their performance, market updates, newsletters, or testimonials of past clients. These can be useful in helping decide who you may wish to invite over for an interview.

 

Videos

Whereas in previous times videos of properties were mainly limited to acreage or prestige properties, these days it is relatively simple for agents to provide a video as part of the promotional campaign. Some are professionally done while others are done with the agent’s smartphone. Where the video is simply a montage of photos it may not be worth paying extra for this, but if it shows a walk through, or more than just the photos, it can add considerably to the buyer’s understanding of the property and how it feels to walk through.

 

Floor Plans

A neatly prepared floor plan—not the builder’s detailed drawings, please—is essential these days in assisting the buyer understand the property. Floor plans enable buyers to quickly see how many rooms there are of each type, how big they are, and where bedrooms are arranged relative to living areas and other bedrooms. This can be an important issue depending on the age of children and how many children.

Floor plans can be linked to the photos to show the perspective of where the photos are taken from. This is called an Interactive Floor Plan.

InteractiveFP

Signage

Some sellers don’t want a sign out the front of their home. Some don’t want it to be obvious they are selling, others believe a sign somehow lowers the tone of their property. Whatever the reason, the result is that it rules out the chance of someone who is cruising the area looking for properties to discover your property. About 5% of buyers come from the signage, often people living in the area.

Options for signage vary from a simple generic FOR SALE sign to a photo signboard with colour photos of the property. Don’t allow your agent to put a sign out front with a photo of the front of the house that people are looking at. Use it to highlight inside rooms and the backyard pool and entertainment area.

 

QR Codes for Smartphone Accessibility

These days many signs include a QR Code, which enables people to scan the link to the website and view the photos on their phones while they are outside the property. QR Codes are also used in newspaper advertising to allow people direct access to the online listing.

Check out this QR Code:

ianwhomes

 

Should the agent be paying for advertising?

As a rule, most agents do not pay for advertising. Those who do as a standard practice tend to undertake the minimum of advertising, which limits the number of potential buyers seeing their listings.

Some properties don’t sell because they are overpriced or unappealing and agents who pay for advertising properties that do not sell are out of pocket. This will make them more inclined to do a deal rather than work hard to find the buyer who will pay a higher price for your property.

An agent is more likely to work hard on your behalf if they are not compromised by a poorly-funded campaign or the need to achieve a quick sale to cover their advertising outlays. A well funded campaign is likely to lead to a higher price for you.