Harken back to the last time where when you can remember joyously sifting through the wad of junk mail and your eyes glimpsed that blazoned red “Just Sold” printed atop a marketing post card generously sent to you by an agent. Code “you missed this one”. Here either the agent evidently wanted to make sure you were aware there was one house in particular that you couldn’t buy even if you wanted to. Well thanks for the heads up. Next politicians will be mailing out postcards alerting voters of when they decided to drop out of the race.
Okay so maybe now you are wondering why agents choose to invest so much money mailing useless information. The answer becomes quite obvious just asking the question. They are fishing for more clients.
While this may seem quite obvious what is decidedly less so is that the same post cards but with a “just listed” instead for the title are in fact mailed out for precisely the same purpose. Think about it. These cards are typically mailed out to the homes within a small radius around the listing. This is because the cost to cover a wide geography is financially prohibitive and everyone can find the home on the internet anyway. We can reasonable presume that an exceedingly diminutive number of the recipients of these “just listed” flyers are active buyers who though they live near the listing would never eventually see the for sale sign nor find the home on the internet though we know that 97% of buyers today who use the internet to find their home. Clearly it isn’t to sell the home that appears on the card!
And while many agents will openly protest what I am saying here, the truth is that it is a well-known secret amongst industry insiders that post card mailers are good for the agent and not the seller. Here are just two of the benefits. First, as I mentioned earlier, they are used to farm the neighborhood for new listings. A “just listed” trades on the clout that the agent has already persuaded at least one person into hiring them. This conveys therefore that they must not be half bad. The second reason, which is not quite so obvious is that mailers like these give sellers the impression that the agent is working hard on the seller’s behalf. Such a positive impression solicits better ratings for the agent on real estate websites and makes a compelling story to help justify the 3% listing commission against those would be willing to discount their fees.
Let me explain further how this story works. In all good real estate training, of which I have been a part of many, the trainers reinforce for agents the need to highlighting the use print advertising because doing so will preempt any discussion of a discount on the listing services. Now the agents know that these flyers are merely to get new clients and bring no real benefit to the seller. Nonetheless agents are trained to regurgitate the 1% – 1% – 1% narrative which goes like this.
Seller: “Some agents have offered to sell my home for less than 3% commission. Are you similarly willing to discount your fees?
Agent: “Before I answer that, let me tell you how we arrived at the 3%. 1% goes to the broker, 1% goes to me your agent, and 1% goes to cover marketing expenses. Of those three buckets which do you think is the most likely to get cut in situations where the fees are discounted?
Seller: “Well, I presume marketing”
Agent: “Correct. And do you think you will fetch the best price for your home without any marketing?”.
This narrative of casting fear, uncertainty, and doubt persists despite the fact that we live in an age when free information sharing via the internet makes marketing your home to millions of people essentially free.
And by the way, all of the same goes for advertising in real estate for sale magazines or newspaper sections which too are obsolete in an internet age.