Thursday, September 4, 2008

Which marketing efforts work best

Somebody posed a question about open houses on ActiveRain, and Jay Thompson (my broker) took the conversation to his blog for further discussion.  The conversation got lively, and somebody commented about the percentage of sales that come from various types of marketing.  (Reuben Moore of Brick and Garden in North Carolina, if you're interested.)

This is something we've discussed in our office quite a bit (especially last year as the market was deteriorating and we wanted to make sure we were doing the best for our clients.)  And what did we come up with?


The following percentages are best estimates based upon my experiences.  I don't have any statistical data to back these up.

Pricing Alone - 25%.  In a neighborhood filled with homes asking $300k, a home asking $100k will sell awfully quick, while a home asking $500k won't sell at all, regardless of any other marketing.  That being said, if nobody knows your well-priced home is for sale, will they make an offer?

Home Condition and Presentation - 25%.  Almost every buyer tells me that their new home doesn't have to be perfect; they don't mind doing some painting in order to make the house their home.  Yet almost every buyer seems to prefer the prettier homes.  It's human nature to like something attractive more than something unattractive.

MLS Presentation and Outreach - 20%.  The MLS feeds most other sources of online marketing, as well as any Realtors who may be searching for their buyers.  Great photos and descriptions are an absolute must!

Realtor - 10%.  Your Realtor can have an impact on your home's sale by knowing the home, knowing the neighborhood, answering the phone & returning calls, negotiating, facilitating, communicating.  (this is in addition to having a major impact on every other item on this list.)

Additional Internet - 9%.  The goal is to have your home available for online buyers to view, regardless of which website they happen to use.  The MLS does a good job of feeding many websites, but there are many others which require an agent's direct interaction.

Home Specific Web Site - 4%.  When people have an interest in a house, they like being able to see everything about that house - often before even seeing the house in person.  A dedicated website with lots of information about the home and the neighborhood, and plenty of pictures from every angle, will help potential buyers feel like the seller isn't hiding anything.  It also gives them something to share with their friends, family, and co-workers.

Yard Sign - 4%.  Some buyers will drive around the neighborhood they want to live in, calling each For Sale sign to learn more about the home.  (of course, the Realtor needs to be available for this to have an impact!)

Open House - 2%. Once in awhile (a very long while), a home will sell because of an open house.  I've written a couple of times about the benefits and potential costs of holding open houses:  "Open Houses - are they worth it?" and "For Sale sign can be a target: Open House thieves to be sentenced next month."

Print Media - <1%.  Let's be honest; nobody is going to read an advertisement in a paper or magazine and come write an offer on your home.

Direct Mail to targeted group of buyers - <1%.  This seems like a good idea - "what if we send a letter to people in (cold weather city) who are thinking about retiring to Phoenix?"  Well, this has several flaws.  1.) finding the right list can be close to impossible.  2.) these potential buyers are probably looking for homes online, which means your energy is better spent in that area.  3.) these potential buyers will most likely look for a local Realtor to help them, which again means your energy will be better spent elsewhere.

All Other - <1%

In Summary.  At first glance it looks like the Realtor isn't all that important, accounting for only 10% of why homes sell.  However, consider that your Realtor will have a large influence on every single item in this list, from pricing to presentation to MLS descriptions, and all the way down the line.

Your focusing on the important things Realtor,

Chris Butterworth