The High Cost of “Free” Marketing
Whenever I hear a national speaker and supposed industry expert exhort Realtors to give away price opinions for free, as a marketing tool, my reaction is always, “How much are you getting paid to speak to all of us today?” (note: Realtors’ term for a formal price opinion is a Comparative Market Analysis, or “CMA”).
I very much doubt it’s for free.
Ditto for the inevitable books, CD’s, personal coaching, etc.
Yes, free price opinions have been a hugely successful hook for sites like Zillow and Trulia.
But, that belies two, inconvenient little facts: 1) their pricing information is famously god-awful; and 2) they don’t care — because their business model isn’t commission-based, it’s traffic-based (that is, advertising-driven). See, “Why Realtors Hate Zillow.”
The Science (& Art) of a Good CMA
While good, successful Realtors do far more than price properties, pricing listings, well, is a critical task that requires significant experience and skill.
Not to mention time.
It’s not at all unusual for me to spend 2-3 hours analyzing Comp’s, teasing out the differences (“adjustments”) between each home and what agents (and appraisers) call the subject property.
Step #2: previewing the competition, which — assuming a typical peer group of 6-8 homes — can easily take another 2-3 hours.
Total time required: up to a day(!).
And that’s for a veteran agent who’s done thousands of CMA’s, and has represented Buyers and Sellers in hundreds of transactions all over the Twin Cities.
Price as a Moving — and Influenceable — Target
Besides time constraints, the other reason I don’t do CMA’s for free is because good listing agents don’t just price property, they can actually increase its value.
They do that by recommending cost-effective home improvements; making sure the home is professionally staged; having the home skillfully photographed by a professional photographer; drafting professional marketing materials; and showcasing all of the above via aggressive networking and marketing.
And all of that is before listing agents use their negotiating skill to maximize the home’s selling price once the Buyer shows up, then does their inspection.
Bottom line: I never want listing clients to hire me without first getting a sense of who I am, and — in general terms — what I’m going to do to maximize the value of their home.
But, to get the particulars, you need to first be a client.
See also, “Free CMA’s! Git ‘Yer Free CMA’s!”; “Zillow’s Home Estimates: Still Wildly Off the Mark”; “Trulia vs. Ross Kaplan“; “Edina Realty Pulls the Plug on Trulia.com“; and “Selling Realtors’ Listings Back to Them.”