“Will you throw in the advertising?”
“Will you contribute to the marketing?”
How to answer these questions with integrity and without compromising the listing opportunity
We really want to go with you but the other guy is throwing in $3,000 of advertising to sweeten the deal …
Read this article to discover how to respond to this statement, secure the 90-day exclusive listing and all without paying for advertising!
Firstly – if this is one of your dread questions (or its relatives) then the chances are high you’re going to hear this question more often than not.
What you resist is what persists, right?
Variations on this statement could look like:
Why do I have to pay for my own advertising…?
Will you contribute to the advertising / marketing…?
The other agent said s/he’d throw in $x,xxx to our advertising. Will you do the same…?
Moral conflict of interest
At first glance it might seem reasonable to think asking to contribute to a property’s advertising costs is a reasonable request. Especially if another agent has offered to sweeten the deal that way.
But let’s look (really look) at the nuts and bolts of you paying for the advertising.
This code states:
- Agents must act in the best interests of the seller and treat the buyers fairly.
- Agents must not engage in any conduct that will put a buyer or seller under undue or unfair pressure.
- Agents cannot withhold or give inaccurate information about a property.
- Agents can’t make unsubstantiated representations.
- Agents can’t breach confidentiality.
- Agents can’t mislead buyers or sellers about pricing expectations.
- Agents must avoid conflicts of interest.
- Agents must disclose to the seller if they receive any rebates, discounts or commission on advertising.
It’s the first two that I’d like you to think about. It’s these we’re going to use to respond to the “advertising contribution” statement.
Best Price Possible
As a real estate agent you are honour-bound to get the best price possible for your vendors.
If you have agreed to contribute to the vendor’s advertising (or maybe pay for the advertising in full) you’re going to want to sell the property fast to mitigate your $-outlay.
Let’s say you’ve agreed to contribute advertising at the rate of $500-$1,000 pw (because you did such an awesome job of extolling the virtues of going big with advertising).
Do you think you’re going to want to get this property sold ASAP so as to keep your costs to a minimum? Of course you are!
Is this going to result in getting the best price possible for your vendor? Not necessarily…
By contributing to your vendor’s advertising you have indirectly put yourself in a moral conflict dilemma.
Undue or unfair pressure
Because you have a vested (albeit indirect) financial interest selling this property you’re going to want to do it ASAP to mitigate your losses.
How easy do you think it’s going to be for you to not apply undue or unfair pressure on your vendor to accept an offer…?
Because you’ve agreed to spend your dollars on advertising your vendor’s property you’re going to want to get it sold ASAP so you don’t have to keep paying for their advertising.
What if your vendor believes that by waiting they’ll get a better (bigger) offer?
Your vendors can afford (so they think) to be picky and choosy because they’re not paying for the advertising.
Can you see how this puts you in a moral conflict of interest?
Cast doubt on the other agent’s integrity
When you explain all of this (above) to your vendor you position yourself as someone with professional integrity. At the same time, it immediately brings into doubt the professional integrity of the other agent (without you having to outright say this).
Can you see how this works?
How to respond to the “will you pay for our advertising? question
Mr & Ms Vendor – on the surface what you’re asking of me isn’t an unreasonable request. However, I’d like to explain to you what this means, because by asking me to pay for your advertising you’re inadvertently asking me to breach the Code of Professional Conduct and Client Care I agreed to when I became licensed under the Real Estate Act 2008.
There are two parts of this Code that are affected – and potentially compromised – if I were to pay for your advertising.
The first is “agents must act in the best interests of the seller“. That’s you – you’re the seller. When I became a real estate salesperson I pledged to act in your best interests. If I pay for your advertising it’s costing me.
Because it’s costing me it means I’m no longer impartial. I suddenly have a vested interest to get your property sold ASAP so that it stops costing me.
So that’s the first moral breach you’re asking me to navigate by paying (or contributing) to your advertising.
The second moral dilemma you put me in is that part of the Code that states “I must not engage in any conduct that will put a buyer or seller under undue or unfair pressure“
If I’m paying for your advertising – like you’re asking me to do – I’m going to want your property sold ASAP, like I’ve already mentioned.
Unfortunately, I cannot promise you today that I won’t not do that.
Why can’t I make this promise to you?
That’s because I don’t have a crystal ball… and neither of us knows that will happen in the future…
Further, if I pay for your advertising, you’re always going to have a question mark at the back of your minds when I bring you offers…
You’re going to be wondering whether I’m saying “this is the best offer” because it is, or whether I’m saying that so that I can stop paying for your advertising.
Can you see how this could play out…?
My professional integrity means everything to me. I won’t compromise it. And I certainly don’t want to put myself in a position where anyone might start asking questions about my integrity. Paying for your advertising would do that.
Now, perhaps the other agent you mentioned who’s going to pay for your advertising has no problem with their professional integrity being questioned like this…
Or laying themselves wide open to a potential breach in our Professional Code, but I do.
So now it’s up to you: what sort of person do you want on your team to sell your largest asset: someone who cares about their professional reputation and who takes their Code of Professional Conduct seriously, or someone who doesn’t…?
One of my clients – let’s call him Rick – back in the early days of his real estate business, buckled (his word) to the pressure of paying for advertising.
Rick was brand new and wanted the listing.
He didn’t see it as “buying” the listing. To him, buying a listing was over-inflating the possible sale price… His integrity was intact (or so he thought).
To compound things, he’d done a great job of stressing the importance of investing in a serious advertising campaign.
What Rick didn’t realise (because he hadn’t asked many pre-appraisal meeting questions) was that he wasn’t the only agent being considered. It came as a great shock to discover this, especially when the vendors were making all the right noises about listing with him.
Rick thought he had the listing in the bag. A 90 day exclusive with significant VPA (vendor paid advertising). Sweet!
However, in order to get this listing Rick agreed to fund the vendor’s advertising to the tune of $5,000. The campaign would kick off with a massive $2,000 campaign in week one and then $1,000 for the next three weeks.
He thought, given the strong and buoyant market, the property would be sold in days. At most, he thought it would cost him $2,000. He had visions of being able to pull the second week’s advertising…
However, what actually happened was a completely different scenario.
Yes – the initial $2,000 of advertising attracted high interest – as you’d expect. Rick’s pricing of the property was spot on. Buyer indications were as he’d predicted.
But the vendors didn’t believe they were seeing the best offers. They wanted to wait another couple of weeks. Their thinking was “we’ve priced it too low … perhaps we should have gone for a higher price …if we wait we’ll get a better offer”
The vendors declined every offer presented to them in the first couple of weeks. All of these were very good offers.
As time went on, the offers started coming in lower. Rick was feeling the pressure. Every week was costing him $1,000 in advertising. Further, the vendors couldn’t understand why the advertising wasn’t working as well as it was when the campaign first started.
They started to question Rick’s professional ability (“how come your advertising isn’t working any more?”).
The property was eventually sold for an amount lower than the first offer. Rick calculated that he’d worked for the equivalent of (almost) minimum wage on that property. By the time he’d deducted the cost of the advertising from his commission he barely broke even.
Since that personal experience Rick has vowed never to pay for vendor advertising himself ever again.
Until we talked about the experience he didn’t really understand all the ‘hidden’ stuff that was going on for him subconsciously.
He knew he was being pulled emotionally, but didn’t understand how or why…
After we talked he was able to identify the moral dilemma and internal conflict of interest he was experiencing.
Rick is now able to respond to the “why do I have to pay for my own advertising?” question without flinching or keeping his fingers crossed the prospects won’t push him on it.
Read the above response (in the coloured box) and adapt it with your own words.
The words you use must feel comfortable for you.
Practise saying this often. Reading it and saying it out loud are two completely different things.
You want to say it so many times so that when you need to use it, it’s as though you’ve said it a million times before and you’re comfortable saying it.
If you are hesitant or wishy-washy Mr & Ms Vendor will have no confidence in you.
If you’d like help then there are several ways I can help you.
Platinum-level one-to-one coaching
This is a bit like having your own personal Sales & Marketing Manager in your business. It’s not for the faint-hearted as it gets kick-ass results.
Because of the level of my input in this programme, I only work with a few clients at any one time. If you’d like to be put on the waiting list please let me know and I’ll add you to it.
Done For You Marketing
Done-For-You Marketing allows you to focus on prospecting activities rather than doing all the non-dollar-productive “stuff” (like social media or writing value-added reports and newsletters).
There are several packages designed to suit every level of realtor business.
If you’d like to know more please get in touch – either by email or phone (NZ 27-282-4155). I respond to all emails personally. I look forward to hearing from you.