Agents shouldn’t shy away from advocating adequate marketing spends to vendors, with research by an independent auctioneer showing a clear link between dollars spent and buyer interest levels.
Jason Andrew, director of Jason Andrew Auctioneers, said many agents took the easy option when a vendor objected to spending ‘too much’ money on marketing their home.
“[Agents will] suggest the most basic ‘bare bones’ package as the holy grail of marketing mediums; photos, signboard, internet and maybe a few small print ads,” Mr Andrew said.
“But whilst it may be easier to win the business upfront, is it the right thing by the seller?”
“We have an obligation to our vendors to obtain them premium prices, not just market value,” he continued.
“Why should they miss out because of an agent’s inadequate skill to overcome their reluctance to marketing challenges?”
Mr Andrew said a recent random sample of 180 auctions found that those that had a marketing campaign that cost more than $5,000 generated exponentially more buyer interest.
Of those that spent less than $5,000, of which there were a total of 125 properties, the average number of groups inspecting during a five week campaign was 12.08.
“The second category comprised properties where the marketing campaign was greater than $5,000,” he continued. “There were only 55 properties in this category, but the average number of groups inspecting during the campaign was 41.16.”
“Over the 180 auctions, where the marketing spend was greater than $5,000, there was 67 per cent more traffic, and 3.5 times the average number of inspections. Greater spend, more inspections.”
“Ultimately, every seller needs to have the following equation clearly demonstrated (with solid hard data) to them; more inspections equal greater levels of competition, equaling a better price.”
Mr Andrew told Real Estate Business that another study was being prepared to show what link, if any, there was between this rise in enquiry levels and higher sale prices.
Sam Kelso, chief auctioneer at Ray White, believed that bigger marketing budgets helped drive traffic volumes and better sale prices.
While it was hard to determine what an ideal marketing spend would be, particularly in the Sydney market, he said effective marketing campaigns did bolster reach. An effective marketing campaign in inner Sydney could cost from $3,000, he said.
Mr Kelso told Real Estate Business that most prospective buyers remained wedded to searching for property via newspapers and online, and while it was important to be on both he felt newspapers still played an important role in driving interest and showing the broader market.
“There’s no filter in newspapers, so you get to see a $200,000 property and a million dollar property next to each other,” he said. This was in contrast to the specific searches usually conducted online.
Moreover, many people would locate a property of interest in a newspaper first, and then search for more information online, he said. “So, the question you should ask [a prospective buyer] is, ‘Where did you first see the property?’,” he continued.
Social media could also help generate interest, although he didn’t believe buyers used mediums such as Facebook to search for properties. Instead, they may post a property they’re interested in, seeking feedback from their friends.
Mr Kelso added that vendor paid advertising should always be focused on the property, although if an agent’s profile was strong, there was nothing wrong with leveraging off this as well provided it helped drive traffic to the vendor’s property.