When interviewing agents to sell your home the more agents you meet the more you will be confronted with the dilemma of whether to spend money upfront to advertise your home.
This cash — your hard earned and after tax cash — is burnt in a matter of weeks if you don’t achieve a satisfactory sale. Many times, if the advertising money runs out before a sale has been achieved the agent will even ask for more cash to fund needless advertising.
But didn’t you engage an agent to sell your home? Then why would you let them transfer the cost and the risk of selling your home back to you?
The best answer is this: Don’t do it. It is too easy for agents to smoke someone else’s money o flashy, foolish promotions.
What attracts home buyers?
Finding a home buyer is so simple that it has confused most agents. Buyers are attracted by the home, not the advertisement.
How not to smoke your profit
No buyer has ever bought a home because they liked the real estate agent’s advertisement. Excessive advertising does not produce a sale. Here’s an $8000 example:
A magnificent home in the Sydney harbour-side suburb of Birchgrove was the subject of two expensive advertising campaigns, yet the property’s contemporary design and panoramic views remained unsold for months. The property was eventually withdrawn from the market. As the buyer succinctly put it, ‘People began to wonder what was wrong with it.’ In most cases, where the advertising bill is the price of decent second-hand car or a European holiday, there is absolutely nothing wrong with the home — it has just been overexposed to the market.
After some time had elapsed, the seller engaged another agent to locate a buyer on the quiet without advertising. This was done in order to avoid any further damage to the value of the home because of its earlier overexposure to the market. A buyer was quickly sourced from the second agency’s database and contracts were exchanged within 14 days of re-listing.
Cut through questions
There are two magnificent questions home sellers generally fail to ask before ‘investing’ $5000 in a print advertising campaign:
1. Who pays for the advertising if the best offer is below what we want for our home?
2. Can we find the right buyer using a medium cheaper than print advertising?
If sellers would just ask these two questions of any real estate agent who asks for advertising money upfront and paid attention to the answers, millions of dollars would not go up in smoke across Australia every week.
If real estate agents had to spend their own money advertising properties, the amount of cash spent on real estate advertising would plummet. If an agent recommends you ‘invest 1 percent’ of your home’s value on advertising and marketing, agree to sign up immediately for their recommended campaign but on the basis that you only have to pay the 1 percent advertising bill after the property has sold. If the advertising campaign does not produce a buyer, then the agent pays for all the advertising. You will find out very quickly just how much advertising is really needed.