Thursday, March 29, 2007

Words That Sell Your Home

by Osman Parvez
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Do certain words help sell homes better than others? The answer, it turns out, is yes. Some of the words and their impact on buyers may surprise you.

Words and how potential buyers react are extremely important to a successful listing. Also important is evaluating the market for your property and determining a list price. It has a big impact to how long it takes to sell your home and how much it will fetch.
In a recent study on real estate sales patterns, a Canadian professor found that homes where the seller was "motivated" took 15 percent longer to sell. Houses listed as "handyman specials" flew off the market in half the average time. The study dissected the wording of more than 20,000 Canadian home listings from 1997 to 2000.

Homes described as "beautiful" moved 15 percent faster and for 5 percent more in price than the benchmark. "Good-value" homes sold for 5 percent less than average.

Another finding in Mr. Anglin's study was that the plea of "Must see!" was received about as enthusiastically as a dinnertime telemarketing call. Homes with listings using those words had a statistically insignificant impact on the number of days they took to sell.

Listings where the word "landscaping" was heralded sold 20 percent faster, and homes in "move-in condition" took 12 percent less time to sell than the benchmark.

Owners use listing language to convey how serious they are about selling, but some words work better than others, Mr. Anglin's study found. Listings in which the seller said he was moving sold for 1 percent less in price compared with 8 percent less when the seller was "motivated."

The real meaning:

Real estate listings, not unlike personal ads, are crafted to minimize blemishes and maximize selling points. So if "enjoys moonlight walks on the beach and cooking together" means "I'm unemployed and am looking for someone who won't always expect to eat out," then "needs TLC" might mean "this house will have you on a first-name basis with the clerks at the local hardware store."

Last year, the impact of listing language was covered in a National Bureau of Economic Research study that looked at whether real estate agents selling their own homes hold out for a higher price. (They do; the study found they take longer to sell but fetch a higher price.)

Descriptions of houses that indicated an obvious problem – such as "foreclosure," "as-is" and "handyman special" – drew substantially lower sales prices.

One problem discovered was that "superficially positive" words that, in effect, damn with faint praise – such as "clean" or "quiet" – had zero or even a negative correlation with prices.

'Golf,' not 'paint'

Those findings echo the ones in a 2000 paper called "Real Estate Agent Remarks: Help or Hype?" researched by University of Texas finance and real estate professor Ronald C. Rutherford.

Mr. Rutherford found, among other things, that buyers read between the lines. If you can't find anything better to say than "new paint," perhaps it's best to say nothing at all.

Factually verifiable comments such as "golf" or "lake" drew increased sales prices; other presumably positive comments about new paint or carpet brought lower ones.

"What you say needs to be extravagant," Mr. Rutherford said, "or the signal that is received by buyers is that it's not worth talking about."

But what do sellers know? "New paint" appeared on 15 percent of the listings and was the most commonly listed comment.

Mr. Rutherford said sellers would be best served by a listing with "just the facts, ma'am."

"If it's a good deal, you need to convey it with factually verifiable language." An example: "Needs repairs," he said.

Of the information from his study, conducted between 1994 and 1997 of almost 60,000 closed residential transactions in Tarrant County, what surprised him most?

That homes with "motivated" sellers stayed on the market 15 percent longer than average and sold for 4 percent less.

His theory: "They overpriced the house to start with and eventually had to lower it. That explains the length of time on the market and the lower sales price."

Does he have any advice for today's sellers?

"Yes," he said, "avoid the word 'motivated.' "

Bottom line? Focus your listing on style, not value or price. And whatever you do, don't call say you're "motivated" or call the place a "rental."

Credit: University at Guelph



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3 comments:

  1. Really interesting article!

    This is how my ad would read:

    Within two miles of shopping centers, dog park, rec center,library, restaurants. Large, fenced back yard located at the back of a quiet cul-de-sac. New furnace and air conditioner. Functioning solar panels. Mountain views from deck. You don't want to miss this.

    None of that is bullshit but I'm not selling my house.

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  2. I am wondering if the more successful words in the listings are more coincidence than causal.

    For instance, do people with nicer homes tend to work with agents that don't word their listings like a used-car salesman?

    Just something to think about...

    Good stuff as always though.

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  3. This comment has been removed by a blog administrator.

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