Are you paying more to reach the same buyers?
The easiest money in the world to spend is other peoples
When you are selling in a property boom, how much do you need to spend to reach the target market? The answer is a lot less than you think and definitely less than the agent is likely to recommend. Two symptoms of a booming market are low stock levels and increasing buyer demand. Therefore, active buyers have a smaller selection of property to choose from which subsequently sees each listing attract more buyers than it normally may.
The pressure is on agents to list enough property to meet the escalating buyer demand and the pressure is on buyers to outbid the competition.
Buyers proactively chase agents looking for off-market listings, pre-market opportunities, and listings in the pipeline.
The above scenario has unfolded throughout 2021.
Given the current market dynamics, it beggars belief that property sellers are asked by real estate agents to pay upfront for advertising campaigns for the sole purpose of (wait for it)… ‘finding buyers’.
If you believe this flawed thinking cannot reach any greater absurdity, think again.
As Demtel’s Tim Shaw would say, ‘but wait, there’s more…’
The agent has one more strategy up their sleeve to set the campaign alight. The agent suggests/advises to the vendor they should quote a low price, in order to (drum roll please) ‘attract more buyers’.
As a vendor you are being asked to pay thousands of dollars upfront, for the agents to devalue your primary asset right before your eyes.
The same battle weary buyers turn up to the new listings each week, to see the same staged furniture as last week, to hear the same pitch the agent gives at every underquoted house.
In the current market conditions, there is absolutely no need to pay an agent hard earned money upfront to attract buyers or to quote a low price to fuel the buying frenzy.
The good news is the current market conditions will supply enough buyers in a frenzied state whether you spend (risk) $10,000 on an advertising campaign or you don’t.
In fact, spending the $10,000 upfront means you are spending more money to reach the same people that were going to turn up anyway.
The true value of the vendor’s $10,000 campaign actually flows to the agent. They use the vendor’s marketing dollars to build the firm’s profile.
The days of buyers waiting for the local paper and/or real estate agents to release ‘this week’s listings’ is well and truly over. Technology has clearly evolved but not all agents have.
Email, social media, websites, SMS marketing, and data mining can all combine to communicate your property to thousands of prospective buyers within hours of it being listed. At no cost to the vendor.
If the agent is made to spend and risk their own money on the advertising campaign, maybe they wouldn’t be so keen to advertise your home for 10% to 20% below the reserve price.
