Vendor Funding For Real Estate Marketing
Lets have a bit of a look into the worm can of vendor funding for real estate. Now I’ve heard a lot of chat and comment about this subject, and it’s never really positive. Comments are generally beside “we are already paying them thousands, now they want more” that sort of tone. So whats the best way to look at this request, this function of the sales process and why it should be looked at pragmatically.
In my humble opinion, this function of the sales process is the most critical. It really defines the outcome of your sale, the marketing plan and most importantly, the agent. We could get into the fee structure debate, but I’m not going there in this blog, that’s another can of worms to open! But lets be clear, the fee structure is what the market has allowed it to be. You have options, research those options. Vendor funding is a critical part of the sales process, but it’s the type of funding and it’s use you need to be really focussed on.
Let’s look at it like this, you own a business making fishing rods. The best rods available. You guarantee them to catch fish. There is a huge market on the West Coast so you need a sales person to be there to sell the rods. It will cost you $50k for a salary. But then you have to get him a car, an expense account, training, commission, phone, fuel and travel costs. Not just the salary, but all this other stuff to make that rep productive so you can sell more product. The less you invest in the rep, the less productivity you can expect. No different with house selling, the BETTER the investment in the vendor funding for marketing, the better the reach and the better the result. It is simply a smart investment when put into the right marketing plan.
Your Agent and THE PLAN
What you need to be really attentive to, is the marketing plan the agent is proposing. The quality of the plan and the value of the vendor funding will determine the outcome. This is why it’s so important to get a few proposals when selling your home. The campaign will determine the outcome, the agent will determine the campaign. Any agent that is really committed, market smart and hungry, should be giving you a detailed marketing plan. And expecting you, to contribute vendor funding for it. The reasons for this is to ensure your total commitment to the sales process, and the commitment to that agent and their plan. If you have invested in vendor funding, you are invested in the sales process.
Now there are lots of options when it comes to selling solutions. Consider these with a lot of enquiry. There are tenders, deadline private treaty, auction, negotiation or just a fixed price number. Again, I’m not going to get into the pro’s and con’s of these options as thats just another can of worms! But you, as a seller, need to have a clear understanding of these options, and what might be best for your property. Listen to the sales pitch, the marketing plan, the consider and reflect on those proposals. As this is where your vendor funding will be used, and like your new fishing rod sales person, you need a return on that investment.
Let’s add a bit more information for you to consider, here is some fact surrounding marketing and vendor funding. I can pretty well advise you that over 60% of agents don’t know this information. In presentations I have made to sales teams, most are totally oblivious to these facts. And to be honest, I struggle with that. For the income agents can make, and the expectations they have on your vendor funding contribution, it’s not good enough. How do I back that statement up? As Im sure there are a bunch of agents reading this that now have their heckles up. Look at your marketing….I do and most agents are are not providing any form of rich media, or perhaps ask for no vendor funding. Just seem to be happy with the same old methods, and missing an entire buying market. Or they are heavy in traditional print marketing, What part of the 90% of online buyers will that help? Or you will probably get the “but we need to cover all the options”……
Fact No 1 – Buyers will spend 43 secs on average on a property website looking at photos.
Fact No 2 – 9 out of 10 buyers search for property on line. Yes 90%.
Fact No 3 – The average time on a property website with video is 5 mins and 50 secs.
Fact No 4 – 60% of buyers will spend 2 minutes watching a video
Also listings with video content get FOUR TIMES the enquiries of listings without.
Fact No 5 – 73% of homeowners say that they are more likely to list with an agent that offers them a video.
Listings with video sell 27% faster than listings without.
Fact No 6 – 89% of people that look at real estate websites want to see floor plans as a preferred tool to navigate around a property.
Properties with floor plans receive up to 30% more enquiry.
These facts are from domain.com.au. I have not been able to get relative information from either Trade Me or realestate.co.nz to compare to this data.
Now further to these facts, and data we can compare this information from the very helpful team at realestate.co.nz
Properties with floor plans on realestate.co.nz is less than 4%
Properties with video content on realestate.co.nz is 25%. BUT drill down on this and I found that 7 out of 10 videos on realestate.co.nz are actually slideshows. So it’s less than 4% mark again. I am aware of agencies that contract outside marketing companies to do a slideshow, with a slick voiceover to try to sell the property, remind me again what those agents are being contracted to do? What level of value to the vendor funding is that?
So that brings me to my next point. Slideshows are not video. Slideshows are simply the laziest form of real estate marketing out there. Slideshows with voice over….don’t get me started on that. A regurgitated soft panning or zooming look at the same photos you just looked at is of no value to your listing. Here is another interesting fact that was shown to me recently from an Auckland real estate agency. These guys had 3 offices and around 80 agents. Over a 4 month period they looked at 150 listings. Of the listings with a slideshow, over 75% of the people that looked at the slide show clicked away within 15 secs! The click away rate on true video was less than. They had very similar data to that from domain.com.au around the enquiry level from listings with floor plans and with video. Consequently, these agencies now do floor plans and video as part of their basic marketing packages, and it’s all vendor funded. They have compelling data to present to their clients, and they are increasing their market share and auction success results. I would love to see some data that looks at aerial images as well, I’m sure this also will have an effect on sales enquiry when used with rich media marketing.
So let’s reflect on this for a moment, there is strong data to back up that good investment of vendor funding will result in a better outcome for the sale of your property. That investment should be in the main, online as that is where 90% of the buyers are looking. The more rich media content you put to that marketing, the more enquiry, the quicker the sales process, and with that we can expect the better the sale process! Now here is where I find some really interesting issues you will come up against. A lot of agents hate video, they just are not comfortable in front of the camera. A lot of us are not. But a lot of us are not trying to sell your house. Your agent is, and needs to be able to market your property in the very best way. And that way is, without a doubt, using online media, reaching any market 24-7. It’s anywhere, anytime available marketing. You will be expecting your agent to be in front of buyers at open homes, what is the difference to being in front of a camera and inviting people to come look? You can quote me on this, but I predict that within 5 years, video will out rank still photography for real estate marketing. There will still be a place, but only for a few key shots, the rest will be by clever use of video.
I have been really lucky to work with some of the industries best marketing agents, and working with them to find a really sweet spot for video production. This resulted in videos that had 1,000’s of hits, had completion viewing rates in the 90% levels, and created really rich enquiry. These videos have less that 20 secs of agent presentation, no more that that in talking AT ALL. No voiceover and no elevator music. The video does not show the same things seen from the photography, it shows the flow and living in the property. Very emotional, and entertaining to the viewer. Not full of boring talking with dull facts about what the viewer already is aware of. So many property enquiries are now driven from social media, you must ensure this is part of the plan.
We are seeing a trend towards video in our region, there are some agents beginning to go this way. Well done you guys, but they are still way off the mark, to long, to much talking, but great to see video being used. Keep working on it, and keep learning. The industry will be better for it! Agent’s, you need to front up on this, you need to understand that the vendor has contracted you to sell the house, not Mr Slick voice, YOU. Not the admin people who make the sterile slideshow with the same music and 15 secs of your branding on it….It’s not helping you get good value vendor funding to create great value marketing campaigns.
Being new to the region, Im probably going to really annoy some people with this blog, at the same time, I hope I can motivate some to look at the way they market, the job they are doing for the vendor, and asking themselves, can I do better? Step back for a moment and look at the marketing that is in the region. Is it rich media? Is it more regionally focused than a total market coverage? If there was a buyer out of the region, what would motivate them to look closer at your property? Does it stand out from the other listings in your market? As a vendor and ad a vendor funding a marketing campaign, and as a vendor paying a commission for the sales process, then you need to really ensure that your marketing campaign is the very best it can be if you want the veery best result. And with that, you will need to be very comfortable with vendor funding that campaign.
I have marketing packages for photography, video and floor plans that are the best value out there. It’s time to lift the game, and left results, particularly in this market. To get more listings, you need to be achieving phenomenal results, I can help you with this.
Just to be clear, here are the things to AVOID at all costs.
- Slideshows, do not under any circumstance put a slideshow with your listing.
- To many photos, remember you have 43 secs if you are using just photos. Give them GREAT images, not bulk.
- Help the marketing impact by good vendor funding. Work with your agent.
- Insist on rich media in your marketing, video and floor-plans will help your listing stand out from the pack.
- Ensure social media is part of your marketing campaign.
- If in doubt, refer to rule 1
- If you are an agent and want to use video, then lets talk! I will make it a fun and rich addition to your presentations.