What does it cost to market a property
By Jacques Erasmus
There has been a stigma concerning the benefits of marketing your property through an agency and what the actual costs are to the seller. The real estate industry is so competitive that agencies battle it out on a day today basis by offering more to their clients than competitor agencies.
We are well aware that competition is healthy as this increases client services and encourages new marketing strategies that will cost an agency a pretty penny. Home owners wanting to sell a property trust that marketing a property themselves will save on paying commission and that real estate agents make a great deal of money for a small amount of work. Nothing could be further from the truth.
There are always costs involved when it comes to marketing. Firstly there is an enormous difference in the amount of money that will be spent between an open mandate property and a property that has an exclusive mandate. This does not, however, indicate that an open mandate property will not be attended to and marketed but if you have an exclusive mandate, the agent is bound contractually with specific marketing activities promised and a strong moral responsibility is placed upon the agent. The agent will be more motivated and go that extra mile. The cost difference is also substantial.
Any property with an open mandate is captured on the agency’s website. This might sound like a free marketing tool, but that is not the case. Engel & Völkers has an internationally based web hosting company which is continually developing and maintaining the sites to ensure that it feeds to all the relevant property portals. Open mandate properties are listed on different websites to the exclusive mandate properties. These individual websites charge a fee to the agency in order to list a property. The more property websites a property is advertised on the better the chance there is for the property to be viewed and thereby sold. Agencies offer special exclusive placing on a website if the property has an exclusive mandate. This will be more costly to an agency but more beneficial to the seller as the property will inevitably receive more hits.
The next cost involved will be the printing costs. This is probably the most expensive cost when it comes to marketing overall. There are printing costs involved when advertising in media material such as magazines, newspapers etc. This cost varies from the size of the advert and the publication in which it will appear. This, however, would then be subjective to exclusive mandates and maybe one or two open mandate properties. The extent of readership in media advertising is considerably high and can be between 200 000 to 600 000 readers nationally this ensures that a property enjoys the benefits of more viewing and has a greater chance of being sold. Engel & Völkers however offers clients the opportunity to have their property advertised in their own in-house magazine namely the National Guide to Real Estate. The magazine is printed on a monthly basis and 50 000 copies are distributed nationally with a readership of about
120 000. Exclusive mandate properties will be eligible to be featured on the front page of the magazine or in the centre spread, hereby offering more exclusivity.
Another cost to take into consideration will be travelling costs. To enable an agent to market a property successfully, he or she will have to travel from one home to another to offer potential buyers a view of each property. Entertaining costs and travelling costs can amount up to a few thousand rand a month. This excludes costs when having a show day. Show days will also be an expensive marketing tool if you take into account the banners that have to be made as well as the boards that have to be put up at various locations. This could amount to thousands of Rand, especially if it is an exclusive show day when specific buyers are invited. This requires extra attention from an agent and often includes refreshments being served.
The benefits of being involved with an international company such as Engel & Völkers, provides access to the network and databases that has been built up over the last three decades worldwide of both buyers and sellers. The two main print publications of the Global guide magazine which has a print run of over 150 000 magazines per quarter and distributed internationally as well as the National Guide which is distributed nationally ensures that this network continues to grow. The Engel & Völkers website also allows a client to search all properties internationally from a single point.
“All in all the cost of purely marketing a single property is quite an expensive exercise, and with new marketing tools being experimented on by agencies this amount will only increase, but it will benefit clients to such an extent that their properties will spend less time on the market. Agencies also spend a great deal of money on systems that will ease the way for sellers and offer them such an exclusive service that they can merely sit back and relax while all their selling needs are catered for. Engel & Völkers has also taken the extra step with the launch of our partnership programme whereby a buyer receives benefits such as special rates on life and home insurance, discount on holidays, green building materials, the moving of your home contents and top of the range home appliances”, says Craig Hutchison CEO of Engel & Völkers Southern Africa.