STAY UP TO DATE WITH REAL ES­TATE

Pilbara News - - Lifestyle - Hay­den Groves Hay­den Groves is the pres­i­dent of the Real Es­tate In­sti­tute of West­ern Aus­tralia.

Nowa­days, most real es­tate agents will ask their clients for a con­tri­bu­tion to the mar­ket­ing and pro­mo­tional costs as­so­ci­ated with sell­ing their prop­erty.

Ven­dor Paid Mar­ket­ing

This trend to­wards Ven­dor Paid Mar­ket­ing (VPA) has oc­curred partly be­cause of the reg­u­la­tion of fees in 1998, which saw con­sumers start to ne­go­ti­ate down agent fees fol­low­ing the abol­ish­ment of the gov­ern­ment’s Scale of Fees. The rapid growth of more so­phis­ti­cated meth­ods of mar­ket­ing is an­other rea­son for this shift to­wards VPA.

Ten years ago, agents would typ­i­cally im­ple­ment about six key mar­ket­ing meth­ods, such as print ad­ver­tis­ing, stan­dard com­pany sig­nage and win­dow cards. Nowa­days, agents im­ple­ment a pro­mo­tional cam­paign that in­cludes 16 dif­fer­ent ac­tiv­i­ties.

Ben­e­fits of VPA

The cost of ad­ver­tis­ing is high, es­pe­cially for print me­dia, and there are gen­uine ben­e­fits for the seller if they pay for the pro­mo­tional cam­paign of their prop­erty.

Firstly, it pro­vides them with an el­e­ment of con­trol over their mar­ket­ing cam­paign. The fre­quency of the ad­ver­tis­ing, the style of the cam­paign and its con­tent are all in­flu­enced by those pay­ing for it.

Se­condly, it saves the seller money be­cause agents are re­quired by law to jus­tify the pre­cise costs of each and ev­ery mar­ket­ing ac­tiv­ity they charge to the seller.

The seller and agent will agree to a max­i­mum mar­ket­ing cost at the start of the cam­paign, how­ever if the prop­erty is sold early in the cam­paign, the ad­ver­tis­ing rate they pay will be re­duced.

In other words, agents can only charge their sellers for the ad­ver­tis­ing they ac­tu­ally use, and must pro­vide a state­ment of those ex­penses to their clients.

On the other hand, an agent who ab­sorbs the ad­ver­tis­ing ex­penses en­tirely would have to re­coup these costs by charg­ing a higher over­all sell­ing fee. In this in­stance, any sav­ings made from the early sale would not be passed onto the ven­dor.

Lastly, ven­dors can be guar­an­teed a good cam­paign. Most agents of­fer mar­ket­ing al­ter­na­tives to their clients, such as a Gold, Sil­ver or Bronze pack­age. Sellers are then able to tai­lor their mar­ket­ing cam­paign to their bud­get and ex­pec­ta­tions, and can be cer­tain it will be im­ple­mented.

Most ef­fec­tive way of sell­ing your home

Of the 16 mar­ket­ing ac­tiv­i­ties good agents un­der­take, not all of them will carry a fee (ac­cess to the agent's buy­ers for ex­am­ple). The mar­ket­ing ap­proach will ob­vi­ously dif­fer from agency to agency, but gen­er­ally speak­ing, if you in­vest about $2500 for a three month cam­paign, this will or­di­nar­ily en­sure your prop­erty re­ceives ef­fi­cient and sub­stan­tial ex­po­sure to the mar­ket so all buy­ers can be found.

I rec­om­mend speak­ing with a lo­cal agent about which mar­ket­ing meth­ods would be most suit­able for your prop­erty and bud­get.

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