This the third of 3 installments of Chapter 1 of my book, The Seven Myths of Selling Your Home. It does’t matter where you live. You’ll find the tips in this book will be helpful in all 50 states. Most of my books about Sequim real estate are written for buyers, but because so many of my buyers are needing to sell a home in their home state, I decided to give them this book, which includes what I call insider secrets of a long time real estate broker. One of my clients told me he wished he had read my book before he sold his home, because he would have saved $50,000 according to him. I hope you find some treasures in this book, too.
Billboards and Signage
Since most home buyers are using the Internet now, there are many old forms of advertising that have fallen to the wayside. Billboards were popular in the 1950s and the 1960s, and billboard companies still sold a lot of billboard space through the 1970s and 1980s, although their effectiveness was steadily declining. If you drove anywhere in the U.S. on major highways in the 1960s you couldn’t help but see those cigarette billboards: Marlboro, Lucky, Winston, and Camel. Today, you will still see some billboards along the highways, but they are mostly a source of advertising revenue for the large companies that own them, and few businesses waste their money on billboard advertising. They are not an effective way to advertise most businesses or professional services anymore, if they ever were.
I should point out that Las Vegas is on a different planet, so advertising with billboards in Vegas does not play by the rules of the rest of the galaxy. You won’t see real estate brokerages advertising on billboards in Vegas, but you will see the big three—sex, enticements to great wealth, and personal injury attorneys (must be an awful lot of injuries in Vegas). It is a sign of the times to see empty billboard space that cannot be sold, and the familiar, “This Space Available.” What a lot of billboard companies are doing now is leaving the last advertiser on the billboard, even though his contract expired and he’s not paying anymore. At least that makes it appear that someone is buying billboard space when the truth may be no one wants it.
There is a new kind of billboard, which is the brightly lit and colorful electronic billboard. These are certainly more visible and fun to look at for all of three seconds as you fly by in your car, but they are incredibly expensive to buy and put up, and therefore, very expensive to rent. You won’t see many of these, and when you do it will be in a metropolitan area advertising a big car dealership or a casino. Car dealerships have suffered, and many have closed, but the biggest ones advertise like crazy. Casinos advertise a lot and do well in good and bad times, but it is rumored that Casinos have more money than God.
TV and Radio Commercials
Buyers from outside a local real estate market are not listening to local radio stations, yet traditional real estate advertising spends valuable dollars on radio ads. In the major metropolitan areas, large franchises plan their advertisements carefully for the entire year, and they will use radio and TV as part of their branding strategy just to imprint their name on people’s minds. In rural areas or in small towns, small business owners use radio as an experiment. They don’t have the metrics or the hard data to help them make the best financial decisions when it comes to advertising, so they run ads on a local radio station, but in real estate sales, most agents give up on advertising that is no longer generating quality leads.
I’m one who is always tweaking my own marketing and the advertising I do for individual listings, and sometimes I go back to try something that has not been working. I experiment with my own money to try various methods, and I test and test and test. So last year I was persuaded by a good man (and a friend) at a radio station that radio spots would generate business and solid leads for me. We talked over a period of weeks, educating each other to the changes in how buyers search for a retirement location and real estate and their agent. He’s been in radio for a long time, and he’s a sincere salesman, so I value his experience and opinion.
I started in real estate sales 37 years ago, practiced as a real estate attorney for 20 years, and authored several real estate books, including one entitled The New World of Marketing for Real Estate Agents. I’ve built the most successful virtual brokerage in my market, and agents from around the country often call me for help, so I’m considered an expert in real estate transactions and marketing. As I look back over the past 10 years, nearly all of my predictions about the real estate industry and the changes that would occur came true.
So it was hard for me to write a check for traditional advertising that I had been accurately predicting for 10 years would be slowly dying. The point is, we both had something to offer each other, and our conversations about marketing and how consumers engage real estate agents to buy and sell real estate were good conversations. I insisted that radio no longer was an effective medium to reach clients in the real estate business, and my friend heard me out but persuaded me that there was a demographic that did listen to radio in my market, and they would respond and generate business for me.
I was persuaded to sign an annual contract with two daily radio spots for a total of $7,000. You’ve got to see the irony in this. Here I was, the preeminent virtual real estate broker on the Olympic Peninsula, one of the top selling agents of single family homes in the county, someone who has written extensively about the death of the traditional bricks and mortar brokerage, an analyst who wrote about the failure of traditional advertising to generate real estate leads, and I was signing a contract to advertise on a radio station, one of the oldest and most traditional forms of advertising. Why would I do that?
Because even when I am convinced that the evidence demonstrates a certain kind of advertising is not effective, I am still teachable. I could be right one year, and wrong the next year. The key to growing personally and professionally in my opinion, is being teachable and constantly observing and learning. Any agent who is not adapting in this rapidly changing environment will eventually be out of business. The last agent home sellers need today is one who is still practicing what he or she was doing 10 or 20 years ago. Some of the big brokerages are leading from behind, and that’s not working for a lot of clients today. I have always worked to be out in front where the action is, which is also where the buyers are showing up in large numbers.
So how did my radio advertising work out? Did it generate a lot of business? Did it at least pay for itself ? The answers are: not very good, no and no. I would have loved to say the salesman was right, that radio advertising for real estate really works. But it did not generate a single client. Not one. My friend was surprised, but I was not. I refrained from saying, “I told you so.” But for $7,000 and no return on my investment, I think I would have been entitled to say, “I told you so.” As I reflect on this experience (and wasted advertising), I am realizing there was something very important I did not think about when my friend persuaded me to advertise on the radio.
While I had many years of data that proved to me that radio was not an effective way to advertise real estate, my salesman friend did not give me a single example of any other broker like me who testified that spending money on the radio worked for them. I had heard some brokers advertise from time to time on the radio, but none of them stuck with it. That should have told me that my instincts were right. I don’t believe in guessing about what works or doesn’t work. I find out with hard work and real money, then I examine the results objectively. That’s what serious marketers do.
If anyone wants to contradict any of the facts or opinions in this book, ask them what data and what facts they have to back up their statements. Make them prove to you that what I am writing in this book is objectively not true. They will not be able to do that. I have proven everything I do over and over again. If it doesn’t work, I don’t waste time or money on it. If it works exceedingly well, then for the sake of my clients, I will do more of it and perfect it. But if it is a colossal waste of time, I don’t bother.
TV advertising is simply too expensive for individuals in real estate. The large franchises advertise on TV as part of their global branding effort. I wish someone would tell them that buyers are not paying any attention to those multi-million dollar commercials. Too often in the business world it’s all about perception. Berkshire Hathaway’s real estate brokerage has a TV ad in which the only thing the agent says to her client is, “There are a lot of buyers for homes like yours.”
It’s clear that with the music and the setting, you are supposed to feel like the agent just pronounced wisdom from on high, and the camera zooms in on the seller who looks like he just had the happiest thought in his life. That’s the substance of how a brokerage expects to persuade you to hire one of their agents? Do they really think consumers are so shallow? Apparently.
I’m more interested in what works, and home sellers are starting to question traditional approaches. That’s good, because as I will say more than once, “the answers you get are only as good as the questions you ask.”
The Curse of Bricks and Mortar
If anyone is entitled to criticize the real estate profession, it would be another full time real estate broker like me with a lifetime of experience. This is my profession, and I’m proud of what I do and how I do it, but I also know the business inside and out after 37 years, and that gives me the right to critique my own profession, especially because of my passion to protect consumers and to give them what they want and expect. I was a real estate attorney for 20 years, and as a lawyer I was often critical about the justice system. It’s no secret the justice system is broken, and I wasn’t bashful about saying that, or sharing that lawyers did not always serve the best interests of their clients.
I was right about the legal profession, and I’m right about the real estate profession. But I’m also teachable. I listen and I learn every day. I learn what does work and what doesn’t work, and I can testify that we are in an extraordinary time of change. It’s both exciting and scary. Reaching qualified buyers is everything today, and buyers have shifted their focus away from annoying interruption advertising, and they have moved to entirely new methods of communication. For the big offices, the phone isn’t ringing off the wall anymore, and buyers don’t waltz into bricks-and-mortar real estate offices anymore, at least in large numbers.
This doesn’t mean a bricks-and-mortar office is not useful. An office is cool, but it can cost a fortune in overhead to own or lease, and buyers and sellers do not actually care about the office anymore. Of my last 100 clients, I believe 2 asked about the office, and they didn’t feel the need to go to one. The other 98 never asked. If they needed to and wanted to meet in an office, then an office would be essential. It’s not anymore. Why?
Sellers want their agents to come to their home. And that makes sense, since an agent must first see the home to evaluate it and to do a comparable market analysis. Even during the term of a listing, agents typically do their clients a service by going to the home for meetings. That is much better personal customer service than telling a client, “Come down to my office and wait in the front room for 30 minutes until I get to you.” a small bricks-and-mortar office myself, but frankly my buyers love meeting at Starbucks before we head out to look at homes.
This probably requires a brief explanation. The reason clients enjoy meeting with me at Starbucks and taking off after a hot Latte and some conversation is because we already have a relationship that we have been building for weeks and in most cases months. My clients tell me they feel like they already know me, the way I think, the way I talk, the way I gesticulate having watched some of my videos, and having read many of my articles. Some have read one of my books. There is a sense of excitement when we meet and get ready to go out and look at the homes we’ve been discussing for months. You can see the obvious importance of building good relationships with buyers with this kind of marketing.
But if I was sitting in an office waiting for the phone to ring or waiting for a stranger to walk in the door, and if that’s how I relied on generating leads to sell homes, I would be a bit desperate in this day and age. It would be a lonely assignment to have “desk duty” watching a phone that doesn’t ring. The reality is those walk-ins are not buyers who have been doing their homework and know exactly what they want, and they are not normally ready to buy anything.
These are additional reasons that an office today does not have the same usefulness it did two decades ago. My little office is unique among real estate offices. It is downtown, and it does not have any 600 pound Army surplus desks. In fact, it doesn’t have any desks. It has a variety of comfortable chairs, sofas, and tables with what I would describe as a coffee shop environment, casual but classy. It’s private, quiet, comfortable, and conducive to having enjoyable conversations, and for drafting contracts or doing presentations. There is an audio and video section for watching anything and doing presentations. There is classical music playing softly. There is a special coffee and tea maker, and a refrigerator full of fresh healthy drinks for clients. Everything is wireless, and while it looks simple and classy, this may be the most powerful office in the county in terms of real estate resources and expertise.
But this little bricks-and-mortar is not an advertising technique to buyers or sellers. No office today effectively generates leads, at least not enough to seriously call it an effective tool to sell homes. The office is a place to meet or teach people after you’ve already connected through other means. That’s not the way it used to be, but it is today. Still I find it humorously ironic that the number one virtual broker in the Northwest has a bricks-and-mortar office. I love it.
There is one other powerful psychological function of a traditional office that I doubt most people are even aware of. The traditional office uses a number of classic client control techniques. Top salesmen are taught that to close a sale, they must control their client, which means there can only be one alpha in the room. To have that control from the beginning of a relationship, the traditional office uses a number of architectural features and psychological control mechanisms.
First, there is the lobby with a receptionist. When you walk in you are told to wait in the lobby until your salesman comes out, which sometimes is a long time. All of that has the affect of psychologically showing you who is in control, and it’s not you. Second, you will normally be taken into a conference room, and again the salesman is in control and the seating is arranged to make that clear. If an agent takes you into his office, sometimes you will see the old school technique of having you sit in a chair that is slightly below the salesman’s chair, so again a subtle but continuing sales technique to make sure that you know your place.
These are long established and proven psychological methods to control a client in a subtle way without the client even realizing it. The whole idea is that when the salesman is in control and you are subservient, he can persuade you to sign the contract or close the deal. My office has none of these control techniques. No lobby. No receptionist or gatekeeper. My office has very comfortable furniture, but my clients and I are seated equally. There is no alpha control system in place.
Why do I not use these long established psychological sales techniques? Because knowledge, competence, professionalism, and honesty trump all the gimmicks. Without a strong foundation in these things, in order for an agent to sell you, he might have to distract you with humor all the time, or change the subject when your questions are too hard. Then you need gimmicks, including every psychological sales trick in the book.
My clients get my respect, and I earn their respect. I serve their best interests from beginning to end, and if it is in my client’s best interest not to write an offer, sign a contract, or to terminate a transaction, I do that without hesitation and regardless of any commission. In other words, there is no need to control my clients. In my business model, I serve my clients’ best interests, not mine. I don’t need to be the alpha in control, but my clients also don’t feel they need to control me.
Maybe this is why my clients and I have such fantastic relationships. Not only is the traditional office unnecessary now, but even traditional advertising falls far short of effectively promoting a listing today. In fact, much of traditional advertising is on life support today. The entire real estate business is changing, and we’ve only touched the tip of the iceberg.
Possibly Related Posts:
- How to Sell Your Home: 7 Myths Chapter 1 (Part 2 of 3) The Open House
- How to Sell Your Home: 7 Myths Chapter 1 (Part 1 of 3)
- How to Sell Your Home: 7 Myths Part 5
- How to Sell Your Home: 7 Myths Part 4
- How to Sell Your Home: 7 Myths Part 3