Yesterday I had two occupied home staging consultations with sellers ready and anxious to sell and make the most of this market. We hear a lot about the difficulties of the market, but homes are selling in every market. The real question should be, when putting your home on the market, “WHY do some sell while others sit, sit and sit?”. Additionally, “Why do some sell at top dollar while others take considerable price reductions before selling?” What is the magic bullet?
Price will forever be a factor when selling anything – in a good or bad market. Marketing, advertising and packaging are typically what differentiates any product from another, however. Retailers and manufacturers spend millions of dollars trying to determine what will make a buyer spend money and just how much money they will spend on a product. Many manufacturers even produce the same product in generic as well as top shelf in order to maximize their potential gain. Seemingly, you would think that if they can simply make a profit by selling it for less than the competition then they could sell more. Why on earth would they want to spend all that money on branding and advertising then?
My question is when will the residential real estate market begin to finally learn the lessons of the retail trade?
What makes an item “clearance” versus full price? Often it has nothing to do with the quality of the product. It does have to do with how long it’s been on the shelf, so to speak. Often it has to do with whether its packaging has any defect. Has it been opened? It is scratched or dented?
Go to any endcap at Target or Walmart and you are likely to find perfectly good product 25% off or more simply because it’s not the current packaging or the box is slightly crushed. Don’t think that this is limited to discount stores though. Visit any designer store and you are likely to find marked down products. What’s wrong with them? Absolutely nothing most of the time.
So… what is the packaging for your retail product? What? You don’t see a home as a retail product? Really? It has a price tag clearly stamped on it (well, in MLS). It will get marked down if it’s not sold this season. Buyers will decide what the features and benefits are with your product versus another. Branding and presentation has everything to do with it.
For the agents who read this that think…. look, any home will sell if it’s just priced right. You are probably correct. Are you selling clearance? What about generic? How much more commission will you make if you sell top shelf? Do you think that a store sells more Tide laundry detergent or generic? If you think the answer is generic, then why do you think Tide spends so much money on advertising? After all, they would only have needed to drop their prices to the same as the generic, or less, and they would sell more, right?
It just doesn’t work that way. Buyers buy based on emotions. Rarely do buyers buy based just on which costs less. This is Retail 101. Real estate industry, are you paying attention?