IF you want to avoid making rookie errors when it comes to selling your home, you need to think, not just like an agent, but like a very smart real estate agent.
Tom Panos, the national director of real estate sales at News Limited, trains thousands of agents every year in property marketing. He talks to Kylie Davis about the common mistakes vendors make and how to avoid them.
Mistake 1 – Fail to understand what is really at stake
“The family home is the last remaining tax haven in Australia and all the profits are tax free,” says Tom. “Selling your family home is one of the few opportunities most people have to increase their wealth, and yet too many people risk achieving the maximum profit possible by cutting corners.”
The mistake people make is by failing to see selling their home as a marketing exercise that requires expertise, knowledge and an investment to get the best results.
To get a premium price, you need high impact advertising, high impact negotiation skills, an emotional connection from a buyer and competition from multiple bidders. The absence of any of these elements will affect the sale price, and often time on market. The absence of several of these elements can have a disastrous effect.
“Quality agents understand that their mission is not to get the first buyer for their vendor, it is to get the BEST buyer for their vendor,” says Tom. “Really great agents are there not just to get the sale but to find the hidden 10 per cent premium in the marketplace.”
Mistake 2 – Choose the wrong agent
If you agree that your home is your most valuable asset, you should put the sale of that home in the hands of an expert with a great track record for understanding the premium price formula – not the cheapest agent you can find, says Tom.
“There are two types of agents,” says Tom. “Transaction agents are there to get a sale quickly, regardless of whether it was the best price. But really good agents are attraction agents. They are committed to helping their vendors understand the premium price formula, to building trust and to taking all the steps necessary to unlocking that value. They understand that when you are selling someone’s most valuable asset, this is the greatest service they can do for a vendor.”
You can probably already name a handfull of top end agents in your area, says Tom. These are the agents that you know about even if you have never used them. You see their sign boards and their advertising selling some of the best local properties.
“These are the agents who clearly understand that the right marketing mix will drive significantly more buyers to a vendor’s property,” says Tom. “These are the agents who use better copywriting, larger print advertisements and better placed online inventory. They know the value of excellent photography and all of these elements shine out of everything they do – from how the present their properties and themselves.”
Mistake 3 – Refuse to spend enough on marketing
One of the most common objections from vendors when selling their homes is that they can’t afford a quality marketing campaign.
“Investing in marketing your home is not a cost, it is an investment in the profits,” says Tom. “You have to ask yourself if you want a cheap marketing plan, or the marketing plan that will get you the highest price.”
Marketing is about getting noticed – sales is about closing the sale.
“But you don’t close any sales if you don’t get noticed,” says Tom.
The rule of thumb for marketing your home is to spend 1 per cent of the price you are seeking for your home. ie: if your home is valued at $500,000, a reasonable marketing spend would be around $5000. If your home is worth $1 million, you should expect to spend around $10,000.
“Spending money on a quality marketing campaign is like taking out car insurance,” says Tom. “What you’re insuring is that you don’t undersell the biggest asset that you own.”
Mistake 4 – Think the internet will do it all for them
There is no doubt that the rise of the internet has fundamentally changed property buying and selling. It is now a simple thing to type in a search criteria and have properties come to you.
But new research shows that online can get congested with a recent study from realestate.com.au showing that only 31per cent of people go as far as page two of search results. This means that if your home is further back in the field, it could be missed by nearly 70 per cent of buyers.
To combat this, online companies like realestate.com.au are introducing new products such as Premium and Highlight listings to improve both the prominence of listings and to get them into the first pages of rankings.
“Cheap though that online campaign may be, it is money wasted if all it does is act as a billboard in the woods,” says Tom.
New market insights show there are three different kinds of people interested in real estate. Active buyers who are looking to buy now, people who are monitoring to buy soon, and passive market watchers who aren’t necessarily interested in buying at all, but like to keep an eye on what is going on.
“Different media attract different kinds of buyers,” says Tom. “Online is extremely effective at attracting Active Buyers who are looking to buy now and seriously hunting and it is a great way to capture a lot of those who are monitoring the market and starting to keep a more proactive eye on things.”
But to unlock the hidden 10 per cent of your property’s value, you need to also attract passive buyers as these are the people who won’t act unless they fall deeply in love with your home. (the emotional connection element of the Premium Price equation.)
Mistake 5 – Ignore the value of print marketing
Australia’s largest property research company, RP Data now analyses the effectiveness of the different advertising media in its Media Combination Research.
More than 503,000 property transactions across the country were followed over 12 months by RP Data. The research looked at where properties were advertised, how long they appeared for, did the property sell, how long did it take to sell and what was the level of discounting?
The research statistically proved that homes for sale that are advertised in both print and online are more likely to be sold than those that used just one medium, spent significantly less time on the market and in many cases, discounted their sale price by less than those that used just one medium.
Tom says the analysis also shows that bigger advertisements in print got better results for vendors.
“The bigger an advertisement, the more expensive a potential buyer is likely to think a home is worth,” says Tom.
“The research showed that on average homes that advertised as a half page ad, were perceived to be worth 24% more than a quarter page, and a full page advertisement has a perceived value increase of 46% compared to the same home advertised in a quarter page ad.”
*Tom Panos is a keynote speaker at AREC13, the Australian Real Estate Conference on the Gold Coast from May 19 and 20.