Pricing your home correctly will ensure the sale of your home
Pricing your home correctly is the most important thing you can to do ensure the sale of your home. The next important thing is to ensure that your home is marketed effectively. An effective marketing plan ensures that your property is seen not just by the largest number of home buyers, but by the type of home buyers who are looking to purchase a property similar to yours. The effectiveness of the marketing plan will depend on a variety of factors including the property itself, the current overall market for home sales as well as your goals as a seller.
For most sellers, this means ensuring that your home is presented to as many potential buyers as possible. This is generally more cost effective and more successful than taking the risk of a high-cost, limited marketing effort focused on just a few prospects. Although more highly targeted marketing plans can work for high-end homes and estates, or homes with specific features such as private airports, docks or equestrian facilities, the goal here at Tellus Real Estate Solutions will be to present your home to a wide variety of potential buyers.
Options for marketing your home for sale
The possibilities for marketing your home are endless. The following options are those that are largely standard in the real estate industry. Most are marketing tasks that Tellus Real Estate Solutions feels are useful when marketing properties for our clients. Individuals selling a home on their own can do a majority of these tasks. We’ve also provided some comments as to why and how each is used in marketing a property:
- Yard sign: The yard sign is the symbol of the real estate industry. There was a time when it was probably the most important marketing tool for selling your home. Today, it is as much a marketing tool for real estate agents and companies as it is a tool for selling your home. Still, it serves an important purpose: it serves as an easily seen landmark. It is common for a prospective buyer to find your property on the Internet and drive by it to see where it is located. A yard sign helps them know for sure which house is for sale. The same thing happens when agents try and find your property for a showing, even relying on distinctive company signs to help them spot a house from a distance. Yard and direction signs are even more important when the home isn’t easily seen from the street.
- Digital photographs: Digital photographs are the basis of most marketing efforts. They appear on flyers and on websites. They typically serve as a buyer’s first introduction to your property. Having a variety of good pictures can help buyers get a good feel for your home. Good pictures can also help accentuate positive features and put the best light on those features that some may consider negatives. Pictures can even help reduce the risk of later litigation. A picture that prominently displays a feature such as high-power lines overhead can go a long way to showing that a buyer was informed of their existence before the purchase. It can also keep you from wasting time negotiating offers with buyers for whom high-power lines are an absolute no-no.
- MLS keybox: An MLS key box goes with an MLS listing, which means they also come with real estate agents. Almost all MLS listed properties have a key box, which points to their value. The key box provides secure access, under a well-understood set of rules, to a large number of real estate agents. The key box makes it easy for agents to show the home. The lack of a key box is seen as a strong negative to showing the property. Agents are more likely to skip the listing completely if it is inconvenient to show it. That means you are totally dependent on the prospective buyer to insist on seeing the property.
- MLS listing: A multiple listing service is a cooperative system owned by real estate brokerage firms that allows them to share listing information and to cooperate with each other. By having your property in the system, information about it is easily accessible by all the agents in the system. The MLS system also tends to drive the content of both local and national real estate companies (see below). Access requires hiring a real estate agent in some fashion. The cooperation by brokerage firms is directly related to commissions. As part of your listing contract, you agree that a portion of the total commission you pay can and will be offered up to a ‘cooperating broker’ as a commission for bringing a buyer. For many sellers, the MLS listing is the main reason for hiring a real estate agent.
The value of the MLS listing
If you have a real estate agent working to find you a buyer, and there were no listings in the MLS, you would be dependent on the reach of that agent or his/her brokerage firm to find a buyer for your home. An agent is only one individual. Even a large brokerage firm will consist of only a few hundred agents. Each agent has some limited number of buyers they are working with, so the pool of buyers is limited to only a few thousand at the most. However, if you list the property in the MLS, you suddenly include a pool of several thousand agents (more than 20,000 agents are part of the NWMLS currently). That means your pool of buyers is likely to be closer to 100,000 than 1,000.
There are a wide variety of ways to list your property on the MLS. Along with traditional brokerage firms (often called ‘full-service brokerages’) that list your property for the average 5-7% fee, there are brokerage firms such as Tellus Real Estate Solutions that provide you with a flexible set of options. There are also quite a few ‘limited-service brokerage firms that will list your property on the MLS for you, without providing any other services. The main thing to keep in mind is that no matter which of these options you choose, the cooperation of brokers with buyers is driven by the offer of a commission to that broker. If you choose to not offer a commission to the buyer’s broker, or offer a below-market commission, you remove the incentive that the buyer’s broker has for showing your property.
- Brokers’ open house: Brokers’ open houses are hosted by real estate agents for other real estate agents. In order to help maintain order, the Northwest MLS encourages specific days each week for brokers’ open houses in each area. A broker open house is aimed at introducing the property directly to real estate agents in hopes that a positive impression will result in their showing it to a current client, or keeping the listing in mind for a future client. It is an integral part of the overall MLS system. Depending on the market, the specific property, marketing budget, etc., the listing agent may even offer incentives to those agents who come to see the property. The value of the brokers’ open house can vary greatly. In general, it is more valuable in more urban or highly populated suburban areas where a large number of agents are concentrated. In rural areas, the number of agents likely to even show up may be limited.
- Public open house: The public open house is a tradition in the real estate industry. The value is greatly debated. The classic complaint of real estate agents is that the primary visitor to an open house will be the nosy neighbor. One aspect is clear; it serves as much as a tool for marketing the agent as it does for marketing the home. Agents use the public open house as a tool for obtaining more buyer clients (perhaps that nosy neighbor). It is unusual for a visitor at an open house to be the eventual buyer, unless they have also seen the property with an agent separately. Still, it is possible to obtain a buyer this way, and holding a public open house helps everyone by giving prospective buyers a low-pressure way of viewing your home. At Tellus, we are proponents of opportunities such as this.
- Newspaper classifieds: Newspaper classifieds are becoming more limited every year. They tend to be the arena of “For Sale by Owner” (FSBO) properties. Even large brokerage firms that are able to negotiate lower advertising rates have moved away from this system. As a rule, we don’t see classified advertising as useful except in specific markets, such as small communities with local newspapers that prospective buyers may specifically review when they are interested in living in a particular community.
- Flyers on public bulletin boards: Flyers are most often used with yard signs, in boxes attached to the yard sign. They are useful for drive-by prospects and, of course, as agent marketing tools. Flyers on bulletin boards at the grocery store or similar public places have very limited value. Home buyers will not typically review these bulletin boards when looking for homes. The most useful bulletin board is the one at a place of business. If you have a property that is in an area that is popular for commuters that work at a particular business (think Boeing or Microsoft), posting on bulletin boards in break rooms or kitchens can be very useful.
- Direct mail advertising (post cards, flyers, letters, or brochures): Direct mail advertising is of limited use, except for specialized properties. It is virtually impossible to identify the correct set of recipients without identifying some specific characteristics about them. It is easier to market to a specific recipient when the property is specialized: having equestrian facilities, a private airstrip or a boat dock. Direct mail advertising to regional subscribers to magazines or websites focused on those activities can also be useful. At Tellus Real Estate Solutions, we also market directly to owners of properties surrounding a property we list, primarily as a marketing effort for our company. Secondarily, we are also looking for the neighbor who knows someone interested in purchasing a home in the area.
- Direct marketing to individuals: Marketing to individuals is the ideal arena for real estate agents. They will typically inform their current buyer prospects and past clients about new listings. For some specialized properties, this may be extremely effective (for example, properties owned by celebrities are typically bought and sold using agents who specialize in these properties and who have connections in high society or entertainment). For most properties, if they are lucky, the agent may actually know a current or past client who might be interested in the property. If they do know a prospective buyer, it is important to be aware of dual agency issues.
- Social media: In recent years, real estate agents and brokerage firms, like most businesses, have been making effective use of social media and the websites associated with it. In general, this is a specialized form of direct marketing to individuals. Common social media communication methods to use in marketing properties are:
- Posting information to Facebook, either generally or as direct messages to individual followers
- Posting information to Twitter, either generally or as direct messages to individual followers
- Posting information to LinkedIn, either generally or as direct messages to individual followers
- Posting to other sites or systems, including ones specific to a property type like equestrian properties
- Posting or syndication to websites: Posting to various websites is the modern bread and butter of the real estate industry. Except in rare instances, if your property does not appear on the Internet, it is not being marketed. The broader the reach the better it is. This means more sites and bigger sites. If you list your property on the MLS, you run a very good chance of appearing on most of the websites listed below by default. That is because many of them directly or indirectly pull their information from the MLS. If you work with a real estate agent, your home listing will typically receive more exposure because they have made arrangements for more websites to pull information from their MLS connection. If you are selling your property on your own, you will have more limited options, but still have access to many of the most popular. Here is a list of some of the sites, and how they get their information:
- Real estate company websites: Century 21, Coldwell Banker, ReMax, John L. Scott, etc. Real estate brokerage firms pull data from the local MLS for their websites. Multiple listing services, such as Northwest MLS, have rules for what data is available. This means that each company has access to basically the same information. It also means that by listing your property in the MLS, you automatically get your property on all of their sites. Each company, including Tellus Real Estate Solutions, has a system for adding additional information to their own listings so that their own listings provide a user with a better experience when it comes to searching for and viewing listings. Individual brokerage firms that are part of larger franchise systems, such as CENTURY 21, Coldwell Banker, etc., will also push their MLS data feeds to their national company websites. This means that via the MLS connection, you also get the benefit of your home listing appearing on national sites.
- Craigslist: Has taken the place of the traditional newspaper classified ad. It is one of the most popular places for buyers to look for local real estate, especially when looking for “For Sale by Owner (FSBO)” properties. It is popular with both real estate agents and individuals. There are a variety of sites, such as www.postlets.com that will help you create formatted flyers for the Craigslist website so that your ad looks presentable. The main challenge with Craigslist is its popularity, but also its lack of security. Scammers and spammers ‘troll’ the site looking for email addresses. For individuals, it is probably best to not share your contact information to minimize this problem.
- Zillow.com: A large, popular, national website that is a competitor to Trulia.com. It aggregates data from multiple sources, typically real estate agents and brokerage firms. It also pulls data from county websites to provide historical sale data. Homeowners are able to post their home on the site for a fee.
- Trulia.com: A large, popular national website. Trulia is very similar to Zillow.com. It aggregates data from agents and county websites also, however it does not provide a way for homeowners to list their properties directly.
- Realtor.com: The public facing website for the National Association of Realtors, a professional organization focused primarily on the needs of the real estate industry (and indirectly, property owners and buyers). It pulls data from its members which include the majority of the brokerage firms already mentioned, so your MLS listing will end up here.
- Homefinder.com: Another site similar to Zillow and Trulia, but not as large. Allows sellers to post their home for sale directly. Its data comes primarily from real estate agent syndication (automatic data feeds from their websites or other tools) or direct input by the agents.
- FrontDoor.com: Another site similar to Zillow and Trulia, but not as large. It is associated with HGTV. Its data comes primarily from real estate agent syndication (automatic data feeds from their websites or other tools) or direct input by the agents.
- HomeGain.com: Another website that does not let owners to post their home for sale directly. Focusing more on investors, its data comes from real estate agent syndication (automatic data feeds from their websites or other tools) or direct input by the agents.
- Propbot.com: This site allows owners to list their FSBOs. It features tools that allow you to create a listing that looks something like a website. It also is marketed more to landlords and tenants. Its data comes primarily from real estate agent syndication (automatic data feeds from their websites or other tools) or direct input by the agents.
- hotpads.com: This site specializes in map-based searches. Owners can post their own properties. Its data comes primarily from real estate agent syndication (automatic data feeds from their websites or other tools) or direct input by the agents.
- oodle.com: A classified ad website that looks a bit like Facebook. Real estate is only one category of postings. It is location (city or neighborhood) focused. Data comes more from individuals, but real estate data is syndicated by agents also.
- Yahoo Real Estate: Yahoo’s real estate sub-domain. It provides both real estate and mortgage data, similar to Trulia and Zillow. It data comes primarily from real estate agent syndication (automatic data feeds from their websites or other tools) or direct input by the agents.
There are always new websites coming online, so it is a good idea to search the Internet occasionally for any new ones.