Hunting for house hunters

digital-marketing

– why marketing is the key to choosing the most effective agent.

The job of an estate agent is to sell your home, to the right buyer, for the highest possible price.  That seems straightforward enough…  but the agent’s ability to do that depends upon how many ‘potential’ buyers get to know that your home is for sale.

Imagine, for example, there are ten potential buyers in the market for your kind of home…  but only two of them can afford to pay the asking price.  Will your chosen agent be able to tell every buyer about your home??  Or will they miss a few…  including, perhaps, the buyers able to pay the best price!?

The answer depends entirely upon two things – the advertising and marketing strategy of the Estate Agents, and the quality of the follow-up of enquiries by that Agent.

Different ‘potential’ buyers look for houses in different ways.  A good agent covers as many bases as possible for each home they are selling.  You should know how and where an agent’s advertising works, and how they follow up each enquiry.

This is a broad summary of the principle forms of advertising and marketing.

The Internet

This is far and away the most important part of any agency’s marketing plan.  More than 85% of house hunters use the internet as part of their property search, and it’s estimated that over 70% of buyers find their new home online.  The reasons are straightforward – a house-hunter can specify detailed criteria as to what they are looking for, and can look for houses at any time of the day or night.

A second consideration is that agents who advertise online get lots of email enquiries, and so have an active and ‘live’ database of house-hunters that can be reached by the click of a mouse when another suitable property comes on the market.

There are two basic components of internet marketing.  The first is the agency’s own site.  The second part of online marketing are the ‘Portal’ websites.

The agent’s website

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Every agent worth dealing with has a homepage.  Most of all, this should be simple to use.  Go to the agent’s home page, and see how easy it is to search for property.  If it’s straight-forward, that’s fine.  If it’s a struggle to find how to search… or indeed, a struggle to find the agent’s home page at all…  then you should seriously consider rejecting that agent straight away.  An agent that has a clumsy home page…  or no home page at all…   may miss out on the best buyers.

Property Portal Websites

These are websites that hold many properties from different agents.  Advertising on these sites costs each agency a good deal of money (which is why not all agents are n all sites).  Finding out which sites an agent is on should be a significant consideration in your choice of estate agent.

There are new portal businesses being launched all the time, though there are a few which dominate the market.  These are the most well-known and commonly used sites:

Rightmove.co.uk

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This is far and away the dominant site.  It has, by its own reckoning, 85% of the property portal market, and is the 7th most popular website of any kind in the UK.  It’s success is down to the user’s ability to search by location, price, and minimum number of bedrooms, plus some other criteria.

Your first question to any agent should be, ‘are you on rightmove?’.  If the answer is no, then don’t use them.

Your second question should be, ‘what other sites are you on?’.  Rightmove has, at most, 85% of the market.  So what happens if your ‘best’ buyer is one of that 15% that doesn’t use rightmove??!

zoopla.co.uk

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Zoopla is the UK’s most comprehensive property website, focused on empowering users with the resources they need to make better-informed property decisions. Launched in 2008, Zoopla has since been one of the fastest growing websites in the UK, now attracting over 40 million visits per month and has collected numerous awards and accolades along the way, including being named one of the Top 10 UK Tech Companies (Guardian) and one of the Top 10 Most Innovative UK Companies. It is another well-known website used by estate agencies, future buyers and tenants.

Zoopla grew dramatically when it purchased Findaproperty.com, Primelocation.com and Propertyfinder.com…. the third, fourth and fifth largest portal sites at the time!

One of the more interesting facts is that, while Rightmove is the top site and Zoopla second, and nearly everybody uses one or the other, there aren’t that many buyers who search on both. So, only by advertising on both Rightmove and Zoopla, can an estate agent reach all the buyers in the market

 

 

Primelocation.com

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This site is now also owned by Zoopla, and is the only brand they have decided to keep after buying out their major competitors (see above).  It was founded by a group of independent estate agencies in London, and originally covered expensive properties only within the M25.  It still has market kudos for the upper end of the market, and is still used widely by buyers in the south east, so may be important if you are selling a home worth upwards of £300,000.

All Zoopla properties are advertised here, but its brand origins make it even more important if you are hoping to sell more expensive properties to a wider geographical market.

On the Market

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On the Market is an interesting tale of a good idea that didn’t quite go to plan. Started by a group of estate agents under the name ‘Agents Mutual’, Onthemarket was supposed to challenge the dominance and Rightmove, and therefore to lower costs for estate agents and their clients. In order to do that, they introduced three controversial policies; first, that OTM agencies could only advertise on one other portal; second, that agents were signed up for long periods, often five years; and third, that OTM would advertise properties exclusively for a couple of days before other portals got to see them.

So, what went wrong? Well, for starters, the ‘one other portal’ rule means that Rightmove remains unchallenged, and virtually all OTM agents are also on Rightmove (a very small number chose Zoopla)… so there’s not much point in looking at OTM, because you’ll find those properties elsewhere.

This, in turn, meant many OTM agents found they lost a lot of custom from the site they dropped… but were locked in to those long contracts. Some chose to break the ‘one portal’ rule  – OTM is taking them to court (see OTM Ordered to pay court bond). Others agents have combined to take OTM to court for lost earnings and broken promises (see Rebel agents explain the case against OTM).

The third point of the plan, giving OTM exclusive marketing for a couple of days, actually works against seller, because it means the major portals – and so the majority of buyers – don’t see newly listed homes straight away.

All in all, OTM has been beset by problems, and one can only pity those agents locked in to long contracts with a site that isn’t helping them…. Pity… but avoid!

Other websites

There are a growing number of other websites around, too.  Bubbling under are the relatively new players in town- nestoria.co.uk,  and globerix.com. Some, like ukpropertyshop.co.uk and email4property.co.uk, are used to advertise the agents, rather than the specific properties.  Finally, some agents use known sites like Google, Yellow Pages (yell.com) or the Thompson Local, to advertise their own sites.

Any and all of these sites might be of benefit in bringing in buyers, making sure that your home is seen by everyone who might possibly be interested in it.

The Local Newspaper

In the ‘olden days’ (ten years ago!), this was perhaps the key way that house-hunters would find suitable properties.  But the local paper is a very clumsy form of marketing.

First, it’s reckoned that over 90% of ‘readers’ of the property section AREN’T planning on moving home.  They are just browsing, seeing what’s available.  I know I’ve done it (even before becoming an Estate Agent!), and I’m sure you have too.

Second, there is no real organisation of the properties within the paper.  If you want to look at all the three bedroom houses with a garage, or at all the homes priced between £150,000 and £160,000, or at all the homes near Ladysmith Road School….   Good luck!  You’ll have to browse each and every advert to see what you can find…  with no guarantee that the ads will contain enough information for you to know.

Third, very few of an agent’s properties are actually advertised in any given advert. Many people think agents advertise everything, but in practice a single page advert costs over £400 per week, and may only have space for two dozen properties, when the agent has two hundred up for sale.

In fact, very few buyers actually see the home they buy advertised in the local paper.

This actually raises a very important issue about adverts in the paper, which, perhaps, not all sellers realise.

The adverts that each agent runs are not necessarily about marketing your home directly…  but they ARE about attracting all possible buyers of your home to contact the agency…

In other words, if an agent has four 2-bedroomed terraces for sale, in the same area for around the same price, it isn’t necessary or helpful to advertise them all.  An agent might well just advertise one in the paper.  What is essential, though, is that the agent takes the correct follow-up information, so that any enquiries about that property are also informed about the other, similar homes on the market.

Moreover, if potential buyers call an agency in response to an advert, the agent must find out the kind of property they want and add them to the database.  Then, if another suitable property becomes available, that prospective buyer should be informed immediately!

Sellers tend to over-estimate the importance of the local paper, even if they themselves are using other sources of information to house-hunt.  In practice, as long as the agent is advertising regularly, there is almost nothing much to choose between agents in terms of their newspaper advertising!

The Office and its Shop Front

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This is the second major part of a traditional estate agency business.  Its importance is changing.  Once, it was a principal site of passive ‘advertising’.  The shop front is – literally – a window on the properties available inside.  Even so, the number of buyers who ‘walk in’ to enquire about a house in the window and then end up buying it, is relatively small.

In fact, the principle value of ‘walk-in’ customers is in giving the agent the chance to talk through the house-hunter’s specific requirements.  In this case, the value of the office is dependent entirely upon the quality of the agency staff, and their follow-up marketing.

An office lends credibility to a business, and provides a constant marketing presence on the high street.  More than that, though, it brings the agent in personal contact with the ‘market’… the buyers and sellers in the area.  For agencies that are built around customer service, this contact is an essential part of knowing and understanding the unique needs of each customer.

Other Agency Advertising

There are an infinite number of ways that an estate agency can advertise itself, from the sponsorship of a local rugby team to the buying of advertising space on the back end of a bus!  The important thing to remember, as a home seller, is that buyers are attracted to an agency by this kind of advertising.  As a general rule of thumb, if you start noticing that one or other agency has a high profile, then the potential buyers in town will do so as well.  An agency with a high profile will attract more house-hunters, and so has more chance of attracting the best buyer at the best price.

Sign Boards

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These are invariably a very effective way of advertising your home.  A remarkable number of buyers know where they want to live, and will spend their first days ‘house-hunting’ driving around their preferred streets, looking for suitable homes in the market.  All estate agents use signboards, so this isn’t a means of differentiating between agents.  At the same time, it once more throws the emphasis back onto the agency’s ability to handle and follow up on enquiries.

Sales and Lettings Agents

Few sellers consider this aspect, but it can be a very important deciding factor as to whether your home sells for the best price.  Estate Agencies that run a lettings department have two huge advantages over agencies which don’t.

First, the agency is in direct and regular contact with property investors, whose properties the agency manages.  Whereas most people only buy a single home to live in, property investors and developers may own anything between two and two hundred different homes.

It’s obvious, when you consider it, but the agents who deal with investment buyers through the lettings department will know which investors are after which kind of properties, and will be able to let them know if your home might meet their investment requirements.

The second consideration is that an Estate Agency which has a lettings department will property understand the mechanics of investment properties, and is much better able to discuss the investment potential with that important sector of the market.  Investment buyers ask about rental returns, percentage yields, capital growth, optimum letting times, likely void periods, and so on.  The sales agent might not know all these details personally, but if the agency has a lettings manager, then the company should be able to speak the language of the investment buyer.

Although it is oft overlooked, in practice an Estate Agent with a lettings department is at a considerable advantage over one with no rental properties.

Agency Particulars – What matters and what doesn’t!

Again, every agent will provide property particulars, and these days pretty much every agent presents colour details.  It’s worth looking at, and reading, a few examples from any agency that you are considering.  Most details should include internal photos…  if one or two don’t perhaps the house is in disrepair, but if none have internal shots it’s more likely the agent is cutting corners on print costs.  How well-written are the descriptions?  Do the details highlight the features of each house, and at least encourage people to see for themselves?

Many people will request particulars before they decide to view.  Presumably the property already meets their broad criteria, so the principle purpose of the details is to encourage prospective buyers to go round in person, while being honest about the condition of the house.

It’s worth making sure, though, that the agent is striking the right balance.  Some agents, for example, will describe a downstairs dining room in a family home as ‘bedroom four’, so that the house appears as a four bedroom home instead of a three-bed.  This might encourage more people to view, particularly from internet searches, but unless the house is targeting bedsit buy-to-let investors, then it is more likely to prompt disappointed viewers than to find a good buyer.

At the same time, some agents include floor-plans in standard details.  This can be counter-productive, because often a 2-dimensional floorplan doesn’t properly show how some houses ‘work’ in real life.  Buyers love floorplans, but sellers should be very cautious of using them: a floorplan on a set of particulars is not likely to attract any more people to view, but might well put off one or two potential buyers!

Can you imagine any potential buyer saying, ‘I like the look of this house, but there’s no floorplan so I’m not going to see it?’.  Or are they more likely to say, ‘this house looked interesting, but I can see the floorplan and I don’t like the layout’.  Yet some houses work much better in real life than on paper! Unless your home is ‘deceptively spacious’…  that is, it’s much bigger than you’d guess from the outside…  then it’s often better not to have a floorplan on the details.

Incidentally, this is even more the case for the ‘virtual tours’ that some agents use for details on the internet.  Virtual tour photos are a 360° photograph of ‘fish-eye lens’ appearance that allows online viewers to rotate the image and focus in on certain details.

What they absolutely fail to do is to capture any sense of space, and so they can make even the largest room appear small and claustrophobic.  Virtual tours definitely won’t bring more viewers around than conventional photography, but they might well put off prospective buyers who, in truth, would find the home much more appealing than the squished-up image suggests.

Summary – Why marketing matters, and what matters in marketing

Marketing is the key to actually selling your home. The agency with the best marketing will reach the most prospective buyers, and it follows that they have the greatest chance of getting the best buyer and the best price. Internet advertising is by far the most important aspect of an estate agent’s marketing, and outweighs every other kind of property marketing in terms of effectiveness. Issues like newspaper advertising and the quality of the property details definitely play a role in encouraging buyers, and its good to find an agent that does these things well, but it’s much of smaller significance than the power of the internet. Ultimately, though, marketing only attracts potential buyers to enquire. Achieving a sale still depends on the ability of the agent to provide a good service to the potential buyers that it does reach. Shortlist your top three agents purely on their internet coverage, and then use other considerations to decide which agent you prefer.

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