The cost of advertising
The real estate industry has convinced itself and the marketplace that the more exposure a property gets during the selling process, the better the outcome. Paying for exposure through expensive advertising presents two dangers: the loss of any upfront monies paid and the real possibility of an eventual lower selling price.
The Real Estate Institute of Queensland websites states:
It is no secret that the greater the exposure a property has to the market, the greater the number of buyers who are aware of the listing.
While this may seem logical, it’s worth digging a bit deeper. For example, is there a level of exposure that does more damage than good? When marketing a property for sale, does it need extensive exposure?
Scattergun exposure to thousands of non-buyers can devastate the eventual selling price. Simply put, every person who sees a property but doesn’t buy it further erodes the eventual selling price.
Maximising the selling price of a particular property needs smart, effective and targeted exposure only to buyers considering a property with its features and benefits.
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:
Select your suburb – remove surrounding suburbs.
Put in your type of property (house or unit).
Add the number of bedrooms.
Set price criteria that straddle your expected price by about 10 per cent. For example, if your expected price is approximately $425 000, search $400 000 to $450 000.
It’s rare to come up with more than twenty properties, and often there will be fewer than five.
Properties that sell when advertised via an upgraded position on a website would have sold anyway – even without the extra expense.
If an agent suggests an advertising campaign involving upfront marketing costs, ask them to pay for it. If the agent is so confident their marketing plan with result in a sale, they should be happy to front the costs.
A good agent will always be happy to receive reimbursement for marketing costs after the sale is completed, which mitigates the risk of financial loss for the seller. Selling a property is stressful enough for the owner without adding necessary financial risk.
The right agent has smart, effective marketing strategies and will happily back their services and skills to offer a sale with no upfront charges. Paying prior to sale is simply not necessary.
