After watching the interview Trulia conducted with the CEO of Funda, it got me thinking about why newspaper classifieds are still a major part of a real estate agents marketing efforts. Why? Because that’s where their customers and clients look and that’s where their sellers want them to advertise.
That’s right. It seems that their customers and clients may be the main reason why they still focus a good portion of their advertising budget on print. Many of their buyers and sellers have yet to embrace the internet themselves. It’s a bit of a cycle. If it ain’t broke, don’t fix it. Old school agents are more prone to remain in this cycle out of sheer habit. Or maybe it’s the fact that they have successfully utilized this medium for so many years that they do not feel a need to change and try something new. Many sellers just want to see their home in print whether the agent can prove successful results or not. Maybe all of the above.
The newspaper classified real estate section is the old school internet. It’s where you went to find the most up to date real estate information about real estate for sale or rent. Even though times are changing and many have embraced computers and new technology, there are many more who have not made the transition. These consumers and real estate agents use the tools that they are used to when buying and selling real estate: Print media, lawn signs, referrals and word of mouth.
I know a good amount of real estate agents that are very successful using these methods and have proven over time that they do in fact work. I believe that there is a certain percentage of the population that will continue to do business this way for many years to come. It’s what they know. It’s what the old school buyers and sellers are used too. Remember, real estate is a people business and people love talking to each other. That’s how they find their real estate agent or buyer and seller. They ask someone they know. Wow! That’s pretty simple isn’t it. I myself have done it. Heck, virtually everyone I know has done it. It’s natural to want to ask people you know for referrals. You trust their opinions.
A habit is hard to break. For example, did you know that in Manhattan, the high tech city that never sleeps, there are still real people looking in the real estate section of the NY Times newspaper every sunday? It’s sort of a sunday ritual. To many of these oldschoolers, the newspaper classified ads section is their internet.
In the area I am in, Northern Virginia just outside of Washington, DC, the percentage of buyers who conduct their search for real estate on-line is 86 percent and increasing. Only 4 percent of consumers who purchased a home found it in print media. And only 1 percent of buyers purchased their home after going through it during an open house.
Nevertheless, clients regularly ask if I will advertise their property in the local newspaper and conduct open houses. I respond by providing them with data and statistics to support my claims of focusing on internet marketing and that open houses attract neighbors, not buyers. And I also pose two questions to them…
“How did you start your market research regarding the sale of your home?” and “How did you search for prospective properties that you may want to purchase once you sell your home?”
Their answer, remarkably, is “on-line” almost 90 percent of the time. Case in point…
Taking marketing dollars away from print media and putting it towards on-line marketing and presence is key to succesfully marketing and selling a property, at least in the Northern Virginia area.
An interesting post on the heels of your post on funda.nl.
I agree with Danilo 100%.
Part of the problem is that agents have trained sellers to believe that there is value in newspaper advertising. I’m sure most listing presentations (including mine) still say, “Your home in the newspaper, blah, blah, blah.” It’s high time that we started telling sellers the truth about what really gets homes sold. In my opinion, it’s local agent networks and Internet marketing.
Why do sellers insist on newspaper, yet most online home ads have crappy photos, no virtual tour, and few details about the property? I think that many agents are still “old school.” They don’t understand technology. Many can’t even navigate a web browser. They may tell sellers that the home will be on the internet but they know too little about how it gets there and how to make the most of their online ads.
As Danilo suggests, it’s not hard to demonstrate to sellers that the internet is the most important element of the “advertising plan.” We just need to have the guts to tell it like it is. I got there with open houses several years ago. I tell prospective sellers in the listing presentation that I won’t do them. If they insist, I offer to put someone in who at least enjoys them. If that’s not good enough, I walk.
Perhaps this will by my year to cut the paper from my budget. Mean time, I have one single objective when I advertise a home in print; peak the readers interest enough to move them to my web ad on the property. From there, I feel like I have a chance.
Thanks for opening an interesting discussion.
Thanks for your insights Danilo & Norm.
What we need is proof– to show clients that yes, online listings sell more homes than classified ads. But our guess is that as long as 1 home is sold with a newspaper ad, they’ll want us to continue paying for them. Sellers will only be satisfied knowing you used every venue possible, within your budget.
If sellers paid for the newspaper ads, maybe in exchange for a lower commission if a buyer is found that way, they’d see the ads don’t really work. Has anyone ever tried this?
danilo - interesting stats. i think that you are doing a great job in collecting data that proves what works and what does not work in your local market. i’m sure that any seller that you present this information to will surely appreciate your effort as well as your expertise. well done.
posing the questions you do also helps the sellers put things in perspective. there is no question that the trend is towards online advertising and away from print - it’s about getting the best ROI.
the one concern I do have is that agents that completely eliminate print advertising in their local papers may be missing out an a unique niche of buyers - “old schoolers” that do not use the internet. they still need a place to live and usually are experienced buyers. it would be a shame to completely eliminate this group and would not be in the best interest of your client. maybe a targeted print plan that has a certain amount allocated advertising dates would work. this way the seller/client would get some exposure in print without burning a hole in your advertising budget. as we always say, the more places you can affordably advertise your clients listings the better. you never know where a buyer may be looking.
norm - well said. we agree that newspaper print advertising sure is expensive. as danilo mentioned, if you have the data to prove where you’re getting the best results then sellers should be open to listening to your marketing plans objectives which ultimately, should be geared to your clients best interest.
i guess the power of open houses really varies depending on your local market and buyer habits. in manhattan, they are still very popular. but then again, the real estate market in manhattan is unlike any other in the U.S.
you seem to have a good plan for next year. use your print budget wisely - make the ad stand out and get the buyer to your website to actually see all the great information within your listing including “multiple” pictures, video etc….
-best of luck to you both!
-rudy.sellsius°
Great post, and great comments.
I don’t want to alienate the “old school” buyers, but I would like to try to show them that searching for real estate online can provide a much more efficient and satisfying experience. I love the nostalgia of paper classifieds as much as the next guy, but at my age, I also want to have a viable business 20 years from now. If I concentrate too much on print, and don’t plan for the future, I’ll be in big trouble.
The geographical area in which I work doesn’t have the widespread access to the internet (especially broadband) like some areas. That is one thing that has kept agents in print in my area. I see internet access expanding and changing in the near future, and as it does, the agents that survive will be the ones who are quickest to adapt.
Ultimately, educating our potential clients to the potential of the internet will be better for agents and clients alike.
Good points Daniel.
BYou also have to consider your niche/market. If you market to seniors or older boomers looking for second homes, newspapers should not be left out of the equation. If your market is students or young professionals, weighing more heavily online is a better bet. But still, the net is huge (will your buyers find you?) while your local print venues are limited in number, maybe just a couple.
Now this is my subject. I’d be interested in what people are doing to go from old habits to new technologies.
What I envision for the old time realtors is to evolve to : a real estate office where people who don’t use the internet or have computers at home, can come into your office and browse all the houses that are available for buying. Can’t you imagine the thrill on your customer’s face to see there home online with all the millions of others and to have peaked at the world of the internet?
Another fear of the old timers is that somehow their job will be replaced by these new technologies.Fear is the issue; especially in the towns in depressed economies such as Indianapolis, Detroit where people relate to “new technology” and anti isolationism as something which “took jobs” from the community.
While technology is causing new changes in the economy, I still wonder how those communities which feel most threatened by it will exist. Will they fall off the map?
Interested how other real estate companies are using their technology and introducing their customers to it.
Thanks Sellsius for addressing this subject.
Sandra
Love your idea about inviting consumers into your office to search. Why not give an office seminar to teach them to search for property online? It’s often a difficult task with several sites to navigate, each a little different. Once you educate consumers to use the internet to search for property more efficiently, they’ll be more inclined to advertise there.
sandra - you hit the nail on the head - some people do not have a computer let alone know how to use one. so they have no clue about how much more information they can find and how much more user friendly search on the internet is compared to print. i know, it’s a scary thought to think that an adult does not have a computer and has no clue how to use one. but it’s true. there are many who have not found their way to the net. this is a huge niche that i think savvy real estate agents should capitalize on. they are real people who need help and who need places to live. they’re just used to doing it the old school way.
there are many reasons that they may not have computers or knowledge of how to use them including education, economics, interest, time, age, fear, etc…it happens in big cities and small towns too. a good start is to follow the example you provided and offer members of the community the opportunity to visit your office so you can show them what’s happening online. if they want to buy, show them how you search online. if they want to sell, give them a demo of what their listing will look like on the web and how other people will find it. all it takes for an agent is time and patience. the non tech consumer will appreciate it and tell all their friends about how you went out of your way to help them. this is a good thing. from my experience, i know that it builds a new level of trust.
thanks for all of your insight sandra. we appreciate it.
-rudy.sellsius°
We’ve been discussing this in our office. We’re very much all about the technology; however, our office is in a small town with a large Sun City presence, and the main source of information in general in this small town is the little county newspaper that comes out twice a week. If you exist, as a business, you appear in that newspaper; that’s just he way it is.
To not advertise in that paper would be to cut our throats with a large portion of our market by simply falling off their mental map locally - even though most of them did find their homes (or at least their agent) on the internet or by driving by the office on the way to Sun City. Still, in order to have a presence in this town, you need to be seen in the newspaper every week. So a small portion of our advertising budget is reserved for that weekly ad, even though our major push is online.
In the big city next door, however, we were running one photo ad per week in the real estate classifieds, and we’re cutting WAY back on that to once a month if an agent has a listing that really wants it, simply because it doesn’t get any response. That city is a high tech center and the shoppers there are more online shoppers than here. A matter of some 40 miles makes all the difference in the world, and you ignore that at your peril.
Excellent point Tricia. You have to know your market. And just because people search online does not mean they’re visiting your website. The net has a huge number of venues. In one main newspaper is a single venue and your listings will definitely be seen by those looking there.
So it’s important to use print wisely and perhaps use it to draw people to your website “to see all the listings”. Also, it is necessary to get on as many online venues as possible. Yes, Realtor.com is a given if you’re a Realtor but get on as many other niche websites and other free or low cost websites as you can to increase the odds that the online buyer sees your listings.
In this vain, I’m going to shut down my blog, start writing on post-it notes and plaster my office window with them. Anyone interested can walk by and take a look to see what I have to say …
Facetiousness aside, old school has its place in marketing but I feel it’s an increasingly small part. I look at the ROI for print and the numbers don’t justify the continued advertising.
It isn’t just the sellers that expect newspaper advertising in is the buyers especially the older folks. If they did not see it in the paper it is not for sale. The younger buyers don’t take the paper so seriously but like you said sellers expect newspaper ads. When I list a home I ask a lot of questions because if the seller expects to see some ads and does not then I will be in big trouble. From my point of view putting it in the paper is not an effective use of advertising dollars. The real estate section of our local papers has gotten much smaller. Anyone who does not have internet access should find an agent who does otherwise they are missing most of the homes for sale in our market.
Sellers, more than anything else, what to know that the real estate agent they selected to sell their home is an expert and knows what he or she is doing. If 43% all the homes in your market (Indy or otherwise) are found by home buyers looking through the paper, that’s good to know and share with your customer. On the other hand if 95% of all the homes in your area are found by people looking on the Internet, that’s good to know and share too.
Home sellers are smart people. They want and expect you to have the facts and give them your professional, expert opinion as to how best to sell their home. When you have the facts and you present them confidently, they will listen to you and take your advice. They want to be persuaded that you know what you’re doing and have their best interest at heart.
If for some reason you cannot persuade the seller that you’re marketing plan is the best route to take, you have one of two choices to make. You can either walk away from the listing, or you can spend a portion of your marketing budget on a medium that you know isn’t going to work and chalk it up to a cost of doing business.
Sellers want us to tell them what to do. They want to hire an expert who can sell their home and earn the most money doing it. It’s no different than you trusting a doctor to find the cause of your headaches and telling you what needs to be done to eliminate them.
The real estate professional who knows the facts and presents them with confidence will never have to worry about customers spending their marketing budget on things that don’t work.
Jonathan, Teresa or anyone, have you ever had a seller insist on newspaper advertising in order to give you the listing? And did you agree to do it in order to get the listing?
Stated another way: if the seller wants it & you know it’s a bad ROI (& despite your explanation, they say they still want/expect it), do you do it anyway? If so, is it because you wouldn’t otherwise get the listing?
–curious jf
here’s a comment i made on active rain re: this topic:
“great dialogue everyone. i usually try to answer everyone who comments on my posts but in this case, i’ll just give some general thoughts.
i guess it really boils down your local market. in the post, i provided the example of how newspapers classifieds in manhattan are still a go to source for buyers, sellers and real estate agents. then i started to think why is that? i know manhattan is different mostly due to the fact that there is not a central mls database that everyone participates in. it’s also different because sub agency is still practiced here. that means that you represent the client who in 99.9% of the cases is the seller. i hear that dual agency is generally frowned upon by the department of state.
so this specific market condition may help fuel some of the reliance on newspaper classifieds. but you may be asking why? well, many times, it provides agents with the opportunity for a direct sale = receiving both sides of the transaction. they work FOR the client[seller] and WITH the buyer [customer]. i have noticed that outside of new york, things sure are different with regards to agency relationships and compensation as well as advertising.
besides the unique niche of old schoolers who still use the print to search for real estate, i wonder if this unique new york dynamic is just a figment of my imagination or not. maybe if some more new yorkers chimed in we’d have a better understanding of why newspaper classifieds are still popular especially the new york times.”
Would I run an ad if it were the only way to get a listing? Probably. I also would set expectations at the start and go with a user-friendly version of “I told you so” when no calls come in. Same goes for open houses, which I no longer hold unless forced. I had one seller who insisted on more after we had two visitors in eight hours of open houses over two weekends. Needless to say, the answer was no … the point that open houses don’t sell already had been proven.
I dont think any broker would turn down a listing because the owner wanted to see a newspaper ad, especially if all other terms are favorable, including the main one—the listing price.
Some brokers pool their open houses and run an open house tour. We have never done it so we do not know whether it increases the effectiveness in sales. Maybe the Art of the Open House has to be perfected, perhaps it is beyond hope. We just dont know but we’re open to suggestions & experimentation. Do open houses sell in any scenario—new construction?
Even if Open houses rarely bring sales of the house shown, they may have other benefits. Many brokers do them to get buyers for other property. Open houses can be a lead capture device. Many brokers use them just for that purpose.
Jf “do you do it anyway? If so, is it because you wouldn’t otherwise get the listing?” - - Great question
A two part answer, yes and no. I don’t believe I have ever lost a listing by explaining to sellers that it is a poor use of marketing dollars. On the other hand when a home has been on the market for longer than it should be, sometimes by doing that little extra thing that deep down inside my clients just “know” it will work, helps me preserve what could become a strained relationship. It is the same with open houses which are a great way for agents to prospect but in the scheme of things does little or nothing to actually sell the home. Yet there are sellers out there who act like they believe me but do not feel that they are getting a full service REALTOR who is doing everything possible to sell their home unless they see some open houses. After all their neighbors home sold, as did their friends home and both had open houses and newspaper ads, and when they discuss it all to their co-workers who are always experts they are told that the home is on the market because that lazy REALTOR isn’t even advertising it in the paper or having open houses.
What’s the point of spending large amounts of money to go after a rapidly shrinking market base?
Some real estate brokers are really looking at their numbers and stepping up to say “this is the reality of the market, we’re wasting our and our clients money if we don’t adjust.”
Good point Markus. If you get absolutely no results from your newspaper ads by all means stop. Is that the case in your personal experience? We hated to run costly ads in the NY Times, but we did get an occasional client for which we earned a fee. Obviously, our profit was less but there was still a profit. And at least one client referred us other clients, which was good.
Newspaper ads hurt the bottom line but if the bottom line is negative, I agree with you 100
-jf