Advertising costs when selling a property – are they optional or necessary?
Selling your house is something you might only do a few times in your life, so knowing what fees are involved and whether they are necessary can be a difficult task. In fact, after paying your agents’ commission, legal fees and fronting any costs associated with making your house ready for sale, the advertising costs recommended by the agent to sell your house can feel like an additional burden in an already worrying time.
How you plan on selling your house is the first thing to consider. This will impact the time you need to engage with the right audience and also the channels you use to reach them. For instance if you decide to hold an auction, you will effectively lock in a day that your house will be sold by – but it will also limit the time you have to connect with the right audience. On the flipside, if you sell your house online or through traditional channels, you have a lot more time to reach out to potential buyers with a well thought out advertising and marketing strategy.
1. What are the advertising costs when selling a house?
There are no set fees when advertising your house and you can control them to some extent. You can choose to spend more of your budget for advertising on one channel such as online, or you might want to use a range of them. It’s important to consider your audience and how they would go about looking to buy a house. Are they more likely to be on social media, or are they more likely to speak directly to an agent about properties that are available? Whatever option you decide to go with, make sure you don’t restrict your sale by only focussing on one. The more channels your budget will allow the better, you cannot afford to miss out on potential buyers.
You might consider the following options:
- listing your house on your agents’ website
- email communication through an online newsletter to your agents subscribers
- social media – Instagram, Facebook, Twitter
- real estate magazines
- newspaper ads and listings
- signage outside your property
- real estate shopfront window displays
- flyers and brochures
2. When selling a property, does the agent or owner pay the advertising fees?
Generally you, the owner, will pay the advertising fees, not your agent. There are a few real estate agents that will pay for the advertising to get a listing but not many. However, before you pay any money towards advertising, make sure you sit down and agree on the budget allocation with your agent. The best way to make sure you have allocated enough money for your advertising fees is to list all costs down so you and your agent can both sign off on them. While you are talking about your budget, it’s worth asking to implement a ‘no sale, no fee’ arrangement. Having transparency around your advertising fees will not only allow you to see where your money goes but it will also give you room to move when negotiating the finer details.
How you pay your fees differs from agent to agent. They might ask for your fees to be built into their commission, or they might ask you to reimburse them separately after the campaign is over. Either way, you will not have to pay the fees until the property is sold so it’s best to keep them in a trust account until then.
3. How much should you spend on marketing and advertising when selling real estate?
Typically you should spend no more than 1% of the total value of your property on marketing and advertising and there are many great tools online for valuating your home. Although this may seem like a lot of money, having the right people see your property is invaluable. Good marketing and advertising is a key step in selling your house fast and will allow you to open your property up to potential buyers.
It’s important to remember that marketing and advertising is an area that spending more doesn’t always equal getting more. Any excessive costs above the 1% could mean you are wasting your money. It’s important to think about value for money, especially when some of the most effective forms of advertising such as online come at a relatively low cost. A good agent will be able to justify the costs and help you estimate your engagement prior to starting your campaign.
4. Does a good marketing campaign mean a higher selling price?
A good marketing campaign will not guarantee you a higher selling price but it is the best way to ensure you sell your house within your set time frame. Although more people knowing about your house will not guarantee its sale, it can allow you to reach the people who would be most likely to make an offer or attend your auction. A good marketing campaign of course will depend on your agent and a good agent will make sure your campaign is:
- Direct – your campaign should highlight the assets of your property rather than the agent who is selling it.
- Targeted – your agent should be able to define the key demographic they are targeting with the advertising campaign and be able to justify the channels they are using.
- Timely – seasonal events and economic changes can alter when the best time to advertise is and a good agent will be able to determine this for you.
So take your time, get in touch with the right agent and find out your property value before diving into selling your property. Being an informed seller will help you know what fees to expect to pay, which you can negotiate and which are necessary and help you open up your property to the right buyers.