Terri Cooper, from Real Estate Mastery, takes a look at this ongoing raging debate – and gives us a few tips and tricks on how to make sure we achieve the best result possible.
This debate has raged for a very long time and different agencies may have different internal policies, however, my personal view is unequivocal.
For myself, and many of top agents in the industry today, our view is that it is imperative to secure Vendor Paid Advertising (the seller’s commitment to an investment in the marketing of their property) … every single time!
Let’s examine why
The ultimate goal of ensuring that your marketing is effective is to give maximum exposure for your listings, attracting many qualified and competitive offers and selling each property for a top result. Great sales results will enhance your reputation in the marketplace, ensure repeat and referral business, and dramatically increase your income levels!
Can you guarantee a top sale price with an agent-funded minimum marketing outlay and minimum exposure, or are you personally investing thousands of your own dollars… with no guarantee of a result?
When a seller contributes to the advertising for his own property, what he is saying that he is definitely committed to the sale – ‘hurt money’ is on the table. I have ALWAYS found that this is one of best qualifying tests of seller motivation – without which you are wasting your time even taking the listing!
Until there is a sale, there is no money for you! As a commission-based agent you are always working with no guarantee of a result. What is your time worth? Your listings must be saleable if you are to spend time on them. Without seller motivation and adequate advertising money, how can you ensure effective exposure, how can you attract buyers?
Surely your seller is entitled to a decent marketing campaign to let prospective buyers know about the property?
Your fiduciary duty to your seller is to gain the highest possible sale price – how can you be assured of this if your marketing is ineffective through lack of funds? So, who should be paying for this marketing investment – you or your client?
Here are two powerful reasons why it should not be you – the agent!
Potential Conflict of Interest
If you are giving your seller your own money to market his property, surely this is a conflict of interest, as you now have a vested interest in his accepting of the offer you bring to him because your own investment is at stake! Your credit card or your bank balance is deficient. Now that you have paid out this money is there may be a temptation to want to recoup this as quickly as possible, which can lead to crossing ethical boundaries.
Potential Business Suicide
Secondly, from a business point of view, this is suicide! Without an upfront investment from the seller, you could be not only working for nothing, but if you also subsidise the advertising, you are paying to go to work!
Vendor paid advertising benefits everyone
Let’s now look at an effective marketing campaign, from the point of view of the tangible benefits for your seller:
- It attracts buyers with increased chance of attracting offers, resulting in a great sale!
- It encourages competition between buyers resulting in top prices being paid!
- It is an insurance policy against underselling. Every suitable buyer in the market for this property has seen the advertising and has made the decision whether or not to inspect further. Those buyers who do view and want the property will vie for the chance to buy!
What about the benefits for you as the agent?
- It maximises the chances of you selling your listings and earning commissions
- It builds your profile in the marketplace, promoting you as a busy, successful agent
- It attracts new clients for your data base
- It gives you the opportunity to promote your U.S.P – why you are the agent of choice in your area.
When you meet with a seller to gain a listing, the most important criteria is motivation. Not the price, not your fee, no … it is seller motivation! If this is present, the price and the VPA will take care of themselves – i have proved this time and again!
It may take time for the seller to trust you with an investment of thousands of dollars at the start. You may have to earn trust.
Start small but leave with something! An investment of less than a thousand dollars gives a marketing campaign with Internet coverage, a pictorial sign with professional photos, coloured brochures for your open homes and letterbox distribution. Start with this. The most important goal is to secure the exclusive listing with at least a minimal seller commitment to marketing.
If you are not confident in asking for this, then it is time to up skill and there are many resources (including my own), which will take you through everything you need to know.
Make this commitment to yourself – to become skilled in this area and you will be amazed at the effect this will have on your sales results!