Tami and I are often asked when teaching the CLHMS class, "How much money should be spent marketing a property?"
It depends. Not to hedge the question, but it really does depend. What's the property like? What is the price" How is it positioned in the market? How are YOU positioned in the market? Are you well established or trying to break in to a new market?
The Washington Business Journal recently quoted a study done by the marketing firm VHT in Chicago. Agents in the business for more than 5 years spend an average of $864 per home; agents with less experience spend $675 per listing on average. But experienced agents tend to have higher priced listings, as well. In the $250,000-$500,000 range VHT's respondents spent an average of $862 per home vs an average of $1,742 per listing on a $1 Million to $2.5 Million home.
Another interesting fact from their survey: 83% of the agents used newspaper advertising, but only 20% felt that newspapers were an "effective" way to market the homes.
Interesting data, Sharon. I actually would have thought the numbers would be higher. I wonder how it has shifted over time with the Internet AND with the changing market? I know my costs have gone down with the Internet use.
Jeff
Jeff - the low number surprised me, too - especially on the luxury homes. A full page ad costs more than that! We've eliminated our newspaper advertising and the local real estate publications. We do some branding print ads rather than property ads.
Sharon, is that what the agent spends, or does that include expenses picked up by the brokerage?
Pat - good question! Since I'm with RE/MAX where all the advertising is agent paid, I hadn't thought of that. The article didn't say.
Wow, such a low number for a high priced listing. I pay for all my own advertising so my number is higher for luxury homes. Of course I wonder if they consider the cost for a professional photographer or graphic designer as marketing costs, or was the survey only for print ads?
Intersting how only 20% feel newspaper advertising is effective, yet 83% use it.
Sharon, the number sure seems low for the higher end listing. I turned down a horse property once because the sellers wanted me to do about $5,000 in advertising....it was a 1.2mil property, but there was no guarantee that it would sell and it would have been my 2nd listing ever and I was broke.