Do you market offensively?
No, I don’t mean using certain four-letter words and insulting your customers (I’ll leave that to K-mart.)
I’m talking about offense vs. defense. Football Style.
Like most sports, there are those who play offensively and those who play defensively. When it comes to real estate – the majority of individuals play defensively. In other words – they sit back and hope something happens. However, it’s those who market on the offense that drive the most business, the most sales, and the most leads.
While technically this post is about the “Marcy House Flip” this post is actually much bigger than just that. Today I want to share all my thoughts on unconventional marketing of a flip. While this is specifically talking about selling a flip, the truth about offensive marketing runs much deeper than merely a single house flip and I hope you can use the information to take your marketing from defense (or sitting on the bench) to offense.
Hang on and prepare to go on the offense.
The Problem: Realtors Don’t (always) Sell.
When it’s time to sell a house, most individuals simply list the home with the Realtor. I don’t believe there is anything wrong with this, and in fact I market almost all my house flips with a Realtor. Getting your home on the Multiple Listing Service (MLS) is one of the most important things you can do.
Newbie Tip: The MLS (Multiple Listing Service) is a giant list of all homes that are publicly available for sale. However – only real estate agents can post homes to the MLS. If you search for homes online for sale, (using sites like Realtor.com, Trulia.com, or TheMLSOnline.com) you are most likely just accessing the master “MLS” list for that particular area.
According to the National Association of Realtors, 87% of all home sales were done with the help of a Realtor and the MLS. This is a HUGE group of people that you don’t want to leave out. Making sure the properties you want to sell are seen by the most people is key in selling your home.
However, simply allowing your agent to list the home is not always enough. In fact, less than one in ten homes are sold by the agent who listed the property. Usually, the home is available on the MLS and another agent brings their buyer-client to tour the house and write up an offer.
Real estate agents do offer many important services, such as:
- Listing the home on the MLS
- Helping you accurately price the property
- Walking you through problems when they arise
- Spreading the word to their clients and their co-workers
- Some marketing
Clearly, there are significant benefits to using a real estate agent to sell your house. However, an agent can often be listing dozens of properties, all clamoring for marketing and attention. As a result, most agents simply rely on posting the property to the MLS, setting a sign in the yard, and (if they are good) pushing the listing information to sites like Craigslist.
Back when the market was hot and multiple offers were common, simply putting your house on the MLS with an agent was enough. In some areas, this is still enough. However, if you want the highest chance at selling your property for the greatest amount – I believe it’s a necessity to step up your game and market on the offense.
This is exactly what I am going to do with Marcy. The property is “listed.” The sign is in the yard. It’s time for my five-part offensive marketing strategy.
Math Nerds, Statistics, and Making a Lot of Money
If you’ve been reading my blog for any length of time, you’ve probably come to the conclusion that I’m a bit of a math nerd. I love numbers, love statistics, and love probability.
Nerd, I know.
So, when I look at a task such as selling a home, I break it up into math and statistics.
- if 90% of home sales are done using real estate agents, I am improving my odds by listing with an agent.
- if 11% of homes are found by buyers from the sign in the yard – I am improving my odds by having a sign in the yard.
- if 90% of people hate wood paneling, I am improving my odds by either painting or changing out the paneling.
As such, everything I can do to assist in selling the home – I want to do – within reason. Obviously I could stand on the street corner in a Big Bird costume with a “for sale” sign to point buyers to my house – but that is getting a bit ridiculous (maybe it will work for you? Send me a picture if you end up doing this!)
There are easy ways, however, to market a house to improve the odds of selling a home. Today I want to share with you my FIVE part offensive marketing plan for increasing the odds of selling the Marcy House.
Offensive Marketing Part One: Dedicated Website
Did you know that 88% of home buyers are using the internet to find their homes? This is huge! Obviously – the internet is where it’s at when it comes to marketing.
As I mentioned before, there are a lot of websites out there that will show your home to prospective buyers. However, your listing is just one in a sea of thousands. Have you ever been looking at a listing on the MLS and seen a link to another property in a box that shouts “Other Nearby Homes?” This is common for real estate websites because it is in their best interest to sell ANY home, not just yours. However, it is in my best interest to sell the Marcy house – and the Marcy house only.
I want to make Marcy stand out.
To do this, I created a website specifically for the Marcy house. I want to drive customers to this site because I present the home in the best light without all the distractions of a real estate website. The agency that I use to sell my property actually does something similar to this, by creating a website with the home address in the domain name. For example, 123 Main street would be 123MainSt.IsNowForSale.com. I am appreciative of their efforts and the theory behind their efforts.
However, while this might be helpful – there are two problems I have with it:
- It’s a long, complicated domain name that doesn’t look as professional as I’d like
- The website is not aesthetically pleasing. I mean, they tried – but honestly, I know I can do better using a tool I’m about to tell you about.
By creating a website specifically for the Marcy House- I am able to drive potential buyers directly to that website that I created and give them a lot more information than typically can be found on the MLS.
Several years ago, websites were difficult to create and a lot of coding was needed to make anything look good. Even those who knew how to code generally needed to be modern design experts to make something worth looking at. The results were websites with a lot of sparkly graphics, terrible music, and horrible color (you know the type.)
However – the internet is a different place today. There are tools that exist that make website creation simple, easy, fast, and incredibly powerful. I created the website for Marcy in just minutes using a website called “WIX.com.”
WIX is a “drag and drop” web design company that for under $10 per month you can have an amazing, high quality website with your very own domain name.
(In the spirit of full disclosure – I get a commission from Wix.com if you click on any of these links. However, I don’t recommend them because of this, and even if you don’t use my link – I still recommend using them 100% for this purpose. If you found this article helpful and want to support this website, I hope you do use my affiliate link. However – if you’d rather just go to Wix.com and sign up – you can do that too! Thanks in advance!)
I will be teaching step-by-step how to go about making a website in the next several days. However, for now please check out the website I created for the Marcy House by clicking here, but make sure to come back and finish reading this article. I have a lot more cool stuff to share about my offensive marketing strategy.
Offensive Marketing Part Two: Paid Advertising
Do you use Facebook? (Shameless plug: come visit my Facebook page and “Like” RealEstateInYourTwenties.com!)
Of course you do!
According to Wikipedia, 69% of Americans use Facebook on a daily basis. This means that in your community there are thousands of individuals who are using Facebook. Each of these users are a potential customer, and Facebook gives you an amazing tool to reach them.
Facebook advertising (as well as Google advertising) allows you to target certain individuals based on certain characteristics, such as age, gender, job title, and interests.
They also allow you to target based on geographic location.
In other words, you have the ability to send an advertisement to ONLY people in a certain area.
The best part about Facebook and Google advertising is that it is “performance based.” It only costs money when it works. This concept is known as “Pay Per Click” advertising and is the primary source of income for both Facebook and Google. Basically, an advertisement is displayed to thousands of different users based on the criteria set up and a fee is only charged when a user actually clicks on that ad and goes to the site that you specify.
I hope you see where I’m going with this.
You already know about the dedicated website I have set up. I have begun creating simple ads on Facebook, targeting individuals within thirty miles of the home that are specifically designed to bring only potential buyers to my site. I’m actually creating several different ads, specifically aimed at different criteria. (I will be focusing primarily on Facebook, but Google works in a similar way, but with less ability to set criteria for your customer.)
There are three important aspects that are key in running a successful Facebook advertising campaign:
- Specific and Defined Criteria
- An Eye-Catching Photo
- Targeted Copy
Let’s take a look at each of these below in relation to the ad I am running:
1.) Specific Defined Criteria.
Facebook advertising is terrific (and kind of creepy) because of the specifics in criteria that can be set. For example, in the above ad I am targeting individuals who live in the town of Aberdeen, as Montesano has a much better reputation than Aberdeen, who are older than twenty-five.
One of the neat features of Pay-Per-Click marketing is your ability to create multiple ads based on different criteria. For example, I also plan on creating an advertisement that focuses on the schools in Montesano, which I will target toward individuals between the ages of 26-40 who are married because they will be the type who are looking to move because of schools. I could create an ad that is targeted just for women (Adorable in Great Neighborhood) or for men (Move-in Ready, Nice Garage for Tools). I can even target ads based on college education or job location.
2.) An Eye- Catching Photo
The photo used in your advertisement is meant to do one thing – get noticed. There are a lot of distractions on the wall of a typical Facebook user. Your photo needs to draw their eye from their wall to the ad. I chose my favorite picture from the Marcy remodel as my photo – as it looks like something out of magazine. The photo is not real large – but with the travertine tile and wood floors – it’s bound to attract attention.
3.) Targeted Copy
“Copy” is a marketing term for the words you write. Just as the only goal of your photo is to attract attention to your ad, the only purpose of your “copy” is to get people to click on the ad and visit your site.
People tent to ignore advertisements – but when they see a “local” ad it often results in a much higher percent of people clicking the ad (called the “Click-through rate.”) The downside of this, of course, is that many people will see their hometown in an ad and click just out of curiosity. This can add a lot of costs to your bottom line, but if it works in selling your house – it is all worth it!
Finally, a brief message on price. What do Facebook ads cost? The question is actually a bit more complicated than it would seem – but basically, Facebook ads are paid for by a “bid” model, in which you state how much you would bid, per click, to get your ad shown. If your bid is one of the top bids, your ad gets displayed. This is a very simplistic explanation, but just know that Facebook Ads will actually tell you about how much to bid. For the above ad, Facebook gave me a suggested range between $.38 – $.89 cents. I set mine at $.50 and will adjust accordingly. I’ll plan on a daily budget of $5.00, which means ten people per day can click my ad at $.50 before Facebook stops displaying the ad.
To read more about using Facebook for real estate investing – check out my blog post over on BiggerPockets titled, “Using Facebook Advertising to Super Charge Your Real Estate Investing.”
Offensive Marketing Part Three: A Super-sized Pricing Strategy
When you order a Big Mac at McDonalds – what do they always ask?
Would you like fries with that?
The same goes for ordering a value meal.
Would you like to super-size that?
The same pricing strategies are found throughout business at nearly every level – but the real estate world is significantly different. In real estate, a price is given – and people offer a price that they would rather pay – and through negotiations an agreed upon price is found.
I want to try something different.
Marcy was listed at $109,900.00.
Would you like to super-size that?
In the “Agent Remarks” of the listing (the information written by my real estate agent and viewable only to real estate agents) as well as on a poster I created and placed on the kitchen table I have included something I have never seen done before: different pricing packages. For the Marcy property – I included three different pricing options that the buyer can choose from:
- $109,900: The Base Package. It includes all the great parts about the home that the person sees when coming in. Remodeled, new roof, new counters, new flooring, new paint, large lot, etc.
- $114,900: The “Upgraded Package.” This includes an energy efficient “ductless heat pump” which are very popular in my area of the country as well as $2,000 toward the buyers closing costs. These heat pumps can save a lot of money for the homeowner and keep costs down significantly in the winter (as well as cooling in the summer.)
- $119,900: The “Envy Package” : This package includes all the items in the “Base Price” and the “Upgraded Package” but also includes new Granite Countertops.
As I mentioned before – I’ve never actually done or even seen anyone else do a pricing strategy like this on a home. I don’t know if this will help or not, but I believe that there is a reason McDonalds and every other business offers upgrades. To me, it seems like an experiment that can’t hurt but could help quite a bit. The homeowner will benefit by the ability to include these upgrades into the cost of the loan, and I am able to offer amenities that were above my budget. Additionally, by offering three different price points, I am hoping to shift the mindset of the buyer from “should I buy this house or not” to “which option should I take?”
Will it work? We shall see!
By the way – I formulated this pricing strategy after reading “Pricing Strategies You Might Not Know But Can Learn From” from ConversionXL.com. By far the best article I’ve ever read on pricing strategies. While the article doesn’t specifically deal with real estate investing – my theory is that I should be able to translate the same psychological strategies from the retail world and apply them to real estate investing. Thanks to Peep Laja for such a great article!
Offensive Marketing Part Four: Agent Incentive
Contrary to popular opinion – real estate agents don’t actually make a lot of money.
According to “Salary.com,” the majority of agents make less than $40,000 per year.
Also, as I mentioned earlier, nine times out of ten, it is not my selling agent who brings a buyer but the buyer’s agent. Because of this, I’ve decided to offer an additional incentive to whoever brings a buyer.
For the first thirty days that the Marcy house is on the market, I will be offering a $1000 bonus to whichever agent brings me a buyer that closes before the end of the year.
The reason for this is to create a lot of initial buzz. It’s not so much money that I can’t afford it – but it’s enough to hopefully peak the interest of local agents. I believe if only I can get people into the home – the home will sell itself. Therefore, if agent’s are given extra incentive to show the home, they will bring more buyers through, resulting in a quicker sale.
On this same note, I also always put the best chocolate or other candy in a bowl in each home I sell. My reasoning is that agents will (consciously or subconsciously) associate a really good chocolate with a good house. I’m hoping that connection will make an agent think of my house more often and want to just “stop by and show it” when they are with clients. I know it sounds weird – but I honestly believe this little trick will help keep my house on their radar.
Offensive Marketing Part Five: Agent Contacts
Finally, the last strategy I’m using on the Marcy house flip involves reaching out to agents, individually, who have shown houses for me before. In my area (and most locations, I believe) it is customary for a real estate agent to leave a business card every time they enter a home. It’s a sort of identification letting you know they were there.
For every home I have sold in the past, I make it a point to collect the cards and keep them.
My final strategy is to simply email each agent (their email addresses are almost always on their cards) and let them know about the house. My goal is simply to be on their radar. Since there are hundreds of agents around and thousands of houses for sale – I never expect an agent to care about a specific house.
However, if I email them about the property and introduce myself – I am more easily put on their radar. Yes, some agents may not like this – but what’s the worst that can happen? Although each email I tailor specifically for that agent, here is a general sample of what that email says,
Subject: New House For Sale with a Bonus
Hey _______,This is Brandon Turner. Sorry to bug you, I know you are busy!
Last summer you showed my house up at _____ Martin Street in Aberdeen and I kept your business card after the home finally sold (hallelujah, it finally went!)
Anyways, I’m just sending a quick note to let you know about our most recent house for sale. It’s located at ____________, which is MLS# ______ and listed with (my agent’s name) .
I figured since you saw my last home and the quality we put into it, you may have clients who would be interested in this new one. It’s actually just as nice, but much cheaper and quite a bit smaller.
Anyways, I just wanted to put it on your radar since I know you do a lot of business around the harbor and sometimes small houses like this can get lost in the shuffle!
Oh, and we are offering an extra $1000.00 bonus to any agent who brings us a buyer before date and closes before the first of the new year.
Hope all is well with you and keep rocking the real estate world
I’ll be beginning to send out these emails starting today. I’ll keep you all updated on how well this or any of these strategies work.
There you have it – my (unconventional) Five-Point Offensive Marketing Strategy. I know this post is ridiculously long – but there was so much good stuff that I didn’t want to leave anything out! If you are still reading this – you rock! Seriously. I hope that you’ll be able to apply some of these marketing strategies in your own quest for financial freedom!
Let me know what you think in the comments below. Do you think any of my strategies will work!? Am I wasting my time? Comment below! I promise I’ll write back! Try me!
Also, this article took me hours and hours to write. If you could please do me a favor and share this on your Facebook, Twitter, G+, or whatever other social network you use – I would love you forever for it!