It’s the phenomenon that makes no sense at all when you think about it. Real estate advertising revenues increase when the market is strong and decreases when the market is weak. If advertising really was the true cause of buyers buying real estate, wouldn’t it be smarter to spend more when conditions are weak and spend less in a boom?
In a booming market, like the one we are in right now, the buyers are going to arrive on your doorstep whether you run a massive campaign or not. That’s why it’s called a boom – there are substantially more buyers than sellers.
In a weak market, sellers are reluctant to spend big on advertising because they are worried the expenditure will be in vain. A weak market is when you need creative and carefully managed marketing campaigns to ensure the widest possible pool of buyers are exposed to your property.
Investment guru Warren Buffett’s famous quote ‘be greedy when others are fearful and fearful when others are greedy’ could apply to real estate advertising. Market widely when others won’t and don’t when all others do.
If an agent asks you to ‘invest’ thousands of dollars in an advertising campaign in this market, tell the agent that you are going to find an agent that already has buyers on the books. One that is more interested in the real estate boom rather than the Vendor Paid Advertising (VPA) boom.
Imagine paying a real estate agent thousands of dollars upfront to find buyers – in a boom!?!?