The Wall Street Journal's real estate talk site answers a question from someone trying to sell their condo without a real estate agent and they haven't had any showings.
Read what the WSJ tells the homeowner here and then I'll give you my 2 cents.
The usual tone of this type of article is that real estate agents feel threatened by do-it-
yourselfers and this article is no different. But what I find really interesting is that the suggestions given in this article are what I consider to not only be expensive but also a waste of money, which seems counter to the "save money" reason they aren't using a real estate agent in the first place.
The author does correctly state that buyers start their search on the Web these days. Then she says the homeowner needs to get a web site for the property. What the author doesn't understand is that getting a web site means nothing unless people find it. And the way you find a web site is through a search engine (Google in particular). Plus, you need to be found on the FIRST PAGE of search engine results these days. Because there are only 10 maximum spaces on the first page of a search engine
lookup, not many websites will be found. For the popular real estate search terms, not only do you have local Realtors and Brokerages trying to be on the first page but other companies too, some of these being large nationwide web sites that are paying people $$$ to get them high up in the search engines. Because of all this,
99%+ of Realtor websites will NEVER be found by Buyers.So what chance does this homeowner have of having his condo website seen? That's easy...ZERO of a chance to be seen in the natural search results since it takes time and effort to get a site to rank well for a popular search phrase. But, there is something called "
Sponsored Results" or "Pay Per Click". I'm sure you've seen the
Sponsored Results section when you search on something on Google. Both at the top of the page and down the right side. Most people don't even look at these but it's the only chance some websites have to be seen at all. The way you get in the
Sponsored section is bid on how much you're willing to pay when someone clicks on your link. That's right, every time you click on one of these
Sponsored Results links, Google charges the web site owner (that's why their stock price is so high!).
The price that is charged is based on how popular the search term is (how many people use that term) and how many web site owners want to be on the
Sponsored Results section for that term so they bid on the position. The placement at the top of the page goes to the highest bidder at a given time. For something like "San Luis
Obispo Real Estate", the cost per click is around $5. There are some keyword phrases that cost as much as $8 a click. So just like
ebay, you make bids on how much you will pay. A portion of the clicks that a web site owner gets charged for are what's called "Click Fraud" or people clicking on the links that have no intention of really wanting to go to the site. There used to be automated programs that would go around an click on pay per click links but Google has supposedly found ways to detect these programs and not charge the web site owners but that can't prevent individual users clicking on links.
To prevent
someones bank account from being wiped out after a day of clicks, web owners place daily maximums on their account. So for example, say they define a
maximum of $40/day. For a link that costs $5/click, that would be 8 clicks. Once it reaches the maximum, the link disappears from the
Sponsored Results section and won't show up again until the next day. That doesn't sound like many clicks (especially when half could be Click Fraud) but the cost adds up quick. $40/day x 30 days = $1200 month. Not only would the condo homeowner need to budget to pay for search engine exposure, they would also need to learn how to choose the best search terms and be able to setup a Pay Per Click campaign.
I spend a lot of time to keep my websites showing up high in the search engines so people find and visit my sites. For example, my latest year-to-date stats for
SloCountyHomes.com shows that I've had
15,287 clicks to my site from Google searches and an additional
6,183 from Yahoo. My
LocalLinks.com site doesn't have quite as many but still over 10,000 for both search engines. If a local Realtor or Brokerage wanted to have as much exposure for their website as my sites, they'd need to be paying $25,000+ per month on Pay Per Click!
The Wall Street Journal article then suggests advertising in newspapers. First they recommend the paper in the largest city nearest their condo, then in other areas. The author even suggests to advertise outside of the US. I would guess that the author hasn't advertised in a newspaper lately, especially one in a metropolitan area or they'd know this was costly. Even our little ole local Tribune charges $75 for a teeny real estate classified ad to run on a single Saturday. Want to run the ad 4 times a month? Well, that's $300. Start adding additional days and multiple papers and you're quickly over $1,000/month. But why would you even waste your money on a newspaper when the statistics (and even the Wall Street Journal author) says that Buyers start on the Internet? The latest
California Association of Realtors study showed that only 4% of Buyers looked at a newspaper when searching for real estate. So, 96% of Buyers aren't even looking at the newspaper these days!
The way to sell any property in today's market is to price it right, present it well, and get LOTS of exposure. Putting it on a website that shows up high in the search engines for the phrases that Buyers search on is the way your property will be seen 24 hours a day, 7 days a week, and from ANYWHERE in the world. If you don't believe the potential reach, check out the
visitor map for my blog by clicking here. The bigger the red dot, the more people from that area are visiting.
The Wall Street Journal author then closes with suggesting they get a real estate lawyer and someone to show the property when the home owner isn't there. She also states that other agents won't bring them buyers because of the "hassle".
Hmm.....since she admits it's a hassle then why should you expect agents to bring their Buyer?
Sounds like to me that once you pay for all this advertising and different people to help you out, you really haven't saved anything on commission and you've restricted yourself on the exposure to Buyers you could get. The author also fails to note that the majority of For Sale By Owners (
FSBOs) end up
listing with a Realtor once they have tried to sell their home themselves and weren't successful. With the importance of getting Internet exposure to sell a home these days, it will be even tougher for
FSBOs (and Realtors with invisible websites).
