Don't Do It - Why Excessive Advertising Costs Are A Trap
By Peter O’Malley
Many home sellers overestimate the real costs of advertising to find a buyer for their property.
Is it possible to find a buyer without a real estate agent?
Just do what the agent does. Put an ad on the internet, a signboard on the property and list it with a fair price guide. These marketing strategies will have buyers beating a path to your door. It really is that simple.
Real estate agents have two primary roles when employed by a home seller.
The first is to find interested buyers. Different agents use different strategies to achieve this objective. They will focus on a combination of internet ads, underquoting, just listed cards, signboards, databases, brochures, etc.
The second objective of the agent is to negotiate the highest possible price with the best terms for the home seller. Some agents can achieve this objective, some can’t. However, some home sellers could also achieve this outcome and some can’t. For the home sellers that could competently negotiate for themselves, the real value a real estate agent can offer is one of saving time and effort.
Undersell Properties
Most agents spend excessive amounts of money finding buyers and then use selling strategies, such as auction, that undersell properties. The excessive amounts of money being spent by agents looking for buyers is the home seller’s money, not the agents. So, if the home seller is paying upfront for advertising and carrying the risk to find a buyer, what is the home seller really paying for?
Answer; the agent’s negotiation skills or lack of it in some cases…
If you feel comfortable that the agent does not possess a high level of negotiation skill to sell your home, do it yourself.
To pay an agent $6,000 nonrefundable in the hope of finding a buyer in this day and age of the internet is absurd.
Furthermore, when the agent does find you a buyer they want to charge a commission on top.
Cut through questions
In most cases, there are two magnificent cut through questions that home sellers have not asked themselves before “investing” $6,000 toward an advertising campaign.
Firstly, who pays for the advertising if the best offer is below the price the agent quoted and/or below the vendor’s reserve price.
Secondly, can the same outcome be achieved using a cheaper and much more effective marketing medium?
Given the true auction clearance rate has hovered around 34% throughout much of 2023, 7/10 home sellers have learned the above through a regrettable experience.
