Real Estate Listing Ads are a Big Waste of Money

Should Sellers Advertise Their Properties?Advertising is King!?

Sellers generally ask the question, "What is it that we need to to in order to get our home to sell quickly?"  They ask "where do you advertise our listing?"  The short answer is "just about everywhere online." But, the bigger question is why do we advertise listings? And the real answer is that it is primarily because our clients expect us to, and their competition is doing it too. In truth, it has limited value.

Before the advent of the Multiple Listing Service (MLS), sellers and their brokers would take out advertisements as a means to attract buyers. Ads would be in the newspaper, weekly flyers, and in windows. Without advertisements, prospective buyers wouldn't know you were for sale, unless they walked directly past it, or their real estate agent had direct knowledge of the property.

This is no longer an issue.

The invention of the MLS

The development of the MLS has drastically changed the need for listing advertisements. The MLS instantly displays a property once it hits the market, alerting agents and clients of those agents alike of your property (should it fit a prospective homebuyer's search criteria). Yes, instantly.

Your property hits inboxes everywhere, the second it goes on the market, and absolutely anyone can use the MLS to locate your property if it falls within their search terms. All they need to do is ask an agent who is subscribed to the MLS (hint: every serious agent.)

"But what about buyers who aren't yet working with an agent?"

There is a genre of buyers who are metaphorically sticking their toe in the vast pool of listings by searching on their own, well before they seriously begin working with an agent. What about these buyers? Will they be reached?

These buyers will almost assuredly see your home on all of the syndicated websites that utilize MLS date (e.g Zillow, Realtor.com, Trulia), but the more important question to ask is, is there a real need to reach this category of buyers? The answer is almost always a definitive no. These buyers tend to be uninterested in making a legitimate offer on your place, even if interested. They are usually interested in a hypothetical sense only. Actionable buyers will almost always be working with an agent on their side.

"No buyers have looked at my house yet. Will an advertisement help now?"

If buyers aren't looking at your house, we would argue that it is almost certain that it is not because they haven't seen your property online. Instead, it usually has to do with the price point of your property not appealing to prospective buyers. While they almost certainly know of your property, the price does not equal the value of the place for them, on paper.

If your home is worth $400,000, and is priced at $500,000, what is a more likely means of selling it this week?  

  • Advertise in every single newspaper in the country, hire a marching band, and put car dealership-type banners in the yard, or
  • Reduce the price to $400,000?

Asked otherwise, if two identical homes were priced at $500,000 and $400,000, and the more expensive one had the best advertising, which one would you buy?

"If there is little need for advertising, what about an agent?"

While advertising will almost 99% not be an effective way to bring in new prospective buyers, working with an agent does provide a significant amount of value. Well-informed, professional real estate agents are your ace in the hole when it comes to getting your home sold, as their knowledge of the market will help ensure that your home is priced correctly from the very start.

According to the National Association of Realtors’ 2013 Profile of Home Buyers & Sellers, only two percent of internet-shopping buyers purchased their home from an unknown seller (a "FSBO").  Given that the Internet is used by 96% of buyers in their search, you're eliminating 98+% of your audience by not working with an agent.

...the report also revealed that 96% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know. Buyers search for a home online but then depend on the agent to find the actual home they will buy (52%) or to help them handle the paperwork (24%) or understand the process (24%).

 

Agents will also provide resources for photographing your property professionally, along with staging your home to sell. They will act as your negotiator, getting you the most bang for your buck, and helping your live up to its true value on the market.

The bottom line

Print advertisements are obsolete when it comes to real estate.  Even online advertising is of limited value. In order to best approach the market, work with a professional real estate agent. They will help price your home competitively, and present it at its optimal level in order to sell.

Looking for assistance in selling your home? Don't hesitate to give us a call or send us an email. We'd love to help!

Real Group Real Estate

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Chicago, IL 60614

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