Real Estate Agency Marketing

When a real estate agent markets your property how much of that marketing directly corresponds to your property and how much relates to marketing the real estate agent’s brand and agency? In my opinion on average it is around a 70/30 split and for certain advertising means it can be as bad as a 60/40 split!

The cost of the marketing strategy which an agent undertakes when selling a vendor’s property is not usually included in the variable commission of 2% to 3% the vendor is charged. Instead, these marketing costs are additionally billed to the property owner and usually amount to 0.75% to 1% of the asking price of a property.

For example if you had a $500,000 property an agent would encourage you to spend around $5,000 on internet and print advertising for the property. Let’s have a closer look at the breakdown of this $5,000 and the amount of value your property listing is receiving.

Internet/Online
This is the cheapest means to advertise your property and an agency would probably charge you around $250 for 3 months of standard advertising or $800 for top spot placement. Surprisingly, online advertisements have very limited real estate agency advertising included in them. Due to the fixed structure of information found on many online real estate portals agents can only include property information and the contact details for their agency. Your property listing would benefit from around 95% of an online advertising.

For Sale Sign
A basic 600*900mm corflute sign would cost around $60 and prices go up to around $350 depending on size and colours. Other For Sale signs printed on vinyl start at around $350 and reach $600 depending on size, colours and installation.

On average the portion of the sign which would be dedicated to your property listing would be around 75% while the remaining 25% would be the agency logo. In some instances I have seen For Sale signs with around 60-70% of the sign being the logo and contact details of the agency. This is totally unacceptable as the vendor is paying for the real estate agency to advertise their real estate business.

My advice to anyone who has been asked by an agent to spend money on a For Sale sign is to make sure the agent shows you an example of their For Sale sign so you can be assured your property listing will make up at least 80% of that For Sale sign.

Print Advertising – Newspapers, magazines, flyers, brochures
Funnily enough this is the most expensive means to advertise through and it is the means which benefits your property listing the least. You only receive between 60% to 70% benefit from a listing in print media, the other 30% of a print advertisement is made up of an agency’s logo and branding.

Even though print advertising can be made up of only words agents encourage vendor’s to have lavish full colour print ads with photos and bright colours. Depending on the publication used these advertisements can range from $300 to $2,000 per advert for each publication. On average a basic colour ad would cost around $600 per publication so over a seven week period this would amount to $4,200 in cost to the vendor.

On so many occasions I open up the property section of a paper or receive a brochure in the mail only to see an agency logo splashed all over the page. The first thing you notice is the agency logo and their branding. Considering the vendor has paid for the advertisement you would think that the first thing you notice is the property information and the second is the agency who it is listed through. This does not happen and is the result of professional designers cleverly creating property advertisements in the interest of the agency instead of the vendor.

All of the exposure that a property requires to successfully sell can be achieved through the internet, a For Sale sign, letter box drops and email marketing. Now days, hardly anyone uses newspapers or magazines to search for property. Everyone has the internet at their finger tips and they prefer the convenience and usefulness of online real estate websites to search for property.

There is some merit in print advertising, to inform potential buyers about open inspection times and remind them of a forthcoming auction. You don’t need photos or full colours in these advertisements, words are sufficient to get your message across and are a fraction of the cost of a full colour advertisement.

Real estate agents understand that large colour printed advertisements offer very little value for money to their vendors. However, they do see the benefit to their agency from having these print advertisements marketing their brand name at no cost to them.

Summary
Cost of Online Advertisement $300 – Your benefit $285 & agent benefit $15 (95/5 split)
Cost of For Sale Sign $350 – Your benefit $280 & agent benefit $70 (80/20 split)
Cost of Print Advertising $4,200 – Your benefit $2,730 & agent benefit $1,470 (65/35 split)

Basically, you are providing the real estate agency with $1,555 worth of FREE marketing & advertising for their brand and logo.

If you are going to use a real estate agent then be very cautious about where your marketing money is spent. You must have a For Sale sign and you must have adequate internet exposure. Letter box flyers and brochures are useful and advertisements in newspapers and magazines are a good way to remind people about an inspection or auction.

Don’t let a real estate agency market their brand name at your expense!