The 3 P's of Property Marketing
Happy Saturday!

In this week's newsletter, I discuss how a solid strategy centered around the "3 P's" of property marketing result in you getting the best offers for your home.

Estimated Read Time - 9 min 24 sec
The Outcome is NOT Guaranteed

My daily schedule as a full-time agent involves a lot of different activities but every morning, without fail, my time is dedicated to reaching out to Expired listings. Expired listings occur when a home fails to sell for some reason or another and, over the years, I have become a specialist at diagnosing what went wrong, getting these properties back on the market, and successfully selling them so the owners can finally move on with their lives. I also work with a lot of For Sale by Owners that have decided to explore other options and are seeking professional representation. Interestingly enough, I find a pervasive mindset, not only with this subset of sellers but in the population at large which is: "No matter what I do, or any agent does, my $400,000 home will sell for $400,000 because that's what it's worth, just stick a sign in the yard and somebody will buy it". Unfortunately, that just isn't the case. Homes sell for whatever a qualified buyer is willing to pay. Why should we expect the same outcome when we unwittingly (or wittingly) expose the listing to a small portion of the buying pool rather than effectively positioning it in front of every potential buyer? And contrary to popular belief, an MLS listing isn't the end-all-be-all either. The expertise of whom you choose to represent you matters, a lot. There is absolutely no guarantee that your home, valued at $400,000, sells for $400,000 so how do we increase the odds that it does? By paying attention to the "3 P's".
Price

Price is the most important thing. Hands down. No way around it. And guess what? Every single seller in the history of real estate sales has been or is inclined to price high, and that's understandable! I've never sat in front of a homeowner that tells me they want less money. However, the path to more money is paved with high leverage. We increase leverage by creating massive value in the eye of the beholder (buyer). That means pricing in a way that makes the home the obvious choice to every buyer in that particular segment of the market. People often say that location, condition, and price are the most important factors. What they fail to realize is that price supersedes all other elements. Bad condition is fixed by price, poor location is fixed by price, and conversely, great location and good condition command higher prices. It all comes down to balance and the creation of value.

Perception of Value and the Obvious Choice

Let's talk about creating value using a scenario that I often walk my clients through. Take a second and imagine if you were a buyer in this situation - Say there are two homes, side by side, that are identical in every possible way apart from a few updates. Home B has the original laminate counters, builder-grade carpet, and original appliances. Home B lists for $250,000. The owner of Home A has updated the countertops, replaced all of the carpet, and installed new appliances in the home. Understandably, he lists Home A for $265,000. What has just occurred here? We have inadvertently created two options for buyers that they must choose from. What percentage of buyers will choose Home B over Home A so they can do their own work? Which ones are okay with having a slightly out-of-date home at a lower price? Which ones will opt for the work already being done? The typical answer is about 50/50. Half the buyers will choose option A and half will choose option B. The question I pose is --- what does the buyer distribution look like if both homes are priced at $250,000, head to head? What would you do if you were the buyer? In the latter scenario, the seller of Home A captures 100% of the buyer demand, rather than 50%, holds all the leverage, and dictates all of the terms. The ultimate buyer of Home B is likely a buyer that did not survive a bidding war on Home A. This is what creating value looks like.

The Golden Window

The most activity a listing ever gets, in any market, at any time of year, and in any economy occurs within the first 14-21 days of it being listed. Pricing correctly, from day one, is imperative as the highest opportunity to receive the most lucrative offer occurs in the days when a listing is new and novel to all potential buyers. "Testing the Market" is a term I hear often and a strategy that does one thing effectively - it burns the golden window and leaves the seller and agent chasing the market, fighting to keep the listing from going stale.

Your First Offer is Your Best Offer

There is a myth that persists to this day that somehow offers get better over time. That the first offer is simply a benchmark by which to judge others. I am here to tell you this is unequivocally false. Time is money and in real estate sales, time is competition as it has an inverse relationship with offer prices. As market time increases, the incentive for a buyer to give a great offer goes down. If a buyer truly wants the property, sees value in it, and is moved to take action when a listing is brand new or has been on the market a short time, they know that they need to present an offer to the seller that is attractive enough that the seller forsakes all other prospects. When market time exceeds the average, there are no other prospects, and buyers know this.

Price Bracketing

The concept of price bracketing deserves (and will receive) an article entirely dedicated to its exploration. Succinctly, price bracketing is a strategy for pricing a home to maximize online exposure. All platforms, including the MLS and Zillow, are set up for buyers to search in a range of whole numbers (200k-250k, etc). Pricing a home directly on a category (i.e. $200,000) means the home shows up in two categories online (150K-200K search and 200K-250K search) effectively doubling its exposure. Outdated, ineffective "left digit effect" pricing (i.e. $199,900) misses ALL of the buyers in the higher category, and likely the exact buyers a homeowner would want to see their home. By pricing on the category a home becomes the Taj Mahal of the lower category AND the best value in the higher category. Mostly overlooked, this concept packs a massive punch.
Positioning

Price is the first facet of positioning. From there we need to make sure we create a consumer-facing product that elicits so much curiosity and interest that buyers pick up the phone and schedule a private showing immediately.

Thursday List

We know that time is everything once a listing goes live. We also know that the bulk of physical buyer activity happens Friday - Sunday. Therefore, listings that go live on Thursday provide 24 hours for syndication and distribution to occur online prior to the highest activity days of the week while limiting wasted "Days On Market" by avoiding the Monday - Wednesday lull. The numbers back this up. Zillow has found that homes listed on Thursdays sell 22% faster than homes listed any other day of the week.

Professional Photos

Professional photos are a non-negotiable for any of the properties I represent. Today's buyer is the most educated buyer in history and almost all home searches begin online. That means that buyers are deciding whether or not to even look at a home in person based on what they see online. Trying to save a few dollars by avoiding professional photography and using a fancy cell phone, no matter how good they are these days, can and likely will cost a homeowner thousands.

Matterport 3D Tours

3D Tours are another non-negotiable for any of the properties I represent. Many buyers come to our market from out-of-state and the pandemic increased the demand for remote viewing options. A buyer having the ability to walk through a home, without ever stepping foot inside is a huge benefit and only increases online traffic. I also use 3D tours to conduct virtual open houses that are permanent, evergreen pieces of content that have a distribution potential far greater than a live open house. A little-known fact is that homes with 3D tours are also positioned higher in online searches so they are well worth the cost.

First Weekend Open House

Open houses are great ways to get buyers through the door but open houses rarely produce offers. In fact, NAR statistics only attribute about 1% of home sales to open houses. However, buyers think they do. So, coupling a Thursday listing with a pre-scheduled Sunday open house puts a lot of pressure on buyers coming to see the home on Friday and Saturday. This strategy increases the urgency for buyers to write offers quickly.
Presentation

A stellar presentation means having the physical home in the absolute best shape possible.

Perception and Personal Items

I recommend to all of my clients that they removed most, if not all personal photos and family items from the home. Part of this is for security. The other part has to do with buyer perception. The buyer must be able to look at the space and see themselves and their belongings in the home. They cannot feel like they are coming to YOUR home for a visit.

Eat-Off-The-Floors Clean

Presenting a sparkling clean home is a must. As clean as it can possibly get. That means baseboards to ceiling fans as buyers rarely miss much. Even if it's not the case, a dirty home often translates to a home in poor condition and that is the exact opposite sentiment you'd like to convey as a seller.

Remove All Pets

While not always the easiest thing to accomplish, ideally all pets will be out of the home.

Feature Sheet

I work with all of my clients to put together a feature sheet of the home that highlights things that have been done to upgrade the home, points of interest nearby, and things that the seller loves about the neighborhood and the property itself. It goes a long way in cementing buyer decisions.

Repairs

I recommend to all of my clients that any small eyesores and feasible minor repairs be done prior to showing the home. Major and costly repairs are dealt with on a case-by-case basis but, in general, my recommendation is to get feedback from the market rather than coming out of pocket when there isn't certainty on how the market will react. Oftentimes, I can save more money for a seller in negotiation than it would have cost to make a major repair upfront.


Final Thoughts

The "3 P's" provide a solid foundation for any listing strategy and must be taken into account by serious sellers looking to maximize their return. Good agents will also incorporate all of these strategies to make their clients as much money as possible. There are also agents who don't or don't know how.

If you find yourself in need of a trusted advisor I'd love to have a conversation. Until then stay tuned for next week's newsletter!
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