News

Main article content

We all know the arguments in favour of Vendor Paid Advertising; agents who pay for advertising themselves are more motivated to take the first offer rather than do the extra work needed to secure a higher one; homes that sell for significantly over reserve generally benefit from a well-funded marketing push; properties that fail to sell are often those that have been poorly marketed. VPA is crucial to securing a great result, and a great advertising campaign needs to be well funded.

Despite its numerous benefits, VPA isn’t always an easy sell, especially when it comes to suspicious or inexperienced vendors who are hesitant to pay for advertising out of their own pocket. When it comes to successfully selling VPA, the industry’s top performers have a lot to teach, and best practice is changing rapidly.

Our top clients are now treating VPA as a separate sale; they’re securing VPA by scheduling a second, standalone meeting after the commission has been negotiated. The sole purpose of the second meeting is to allow the vendor to make decisions around how their home will be marketed by informing them of the benefits of various strategies. Lots of vendors find this preferable because of the increased level of trust between the agent and vendor at this stage. It also separates the two transactions of commission and advertising and gives the vendor – who is probably already suffering decision fatigue at the beginning of the sales process – the opportunity to give each distinct stage of the sale the attention necessary to make an informed decision. 

Setting aside a time especially to discuss marketing gives the agent the space to go through the process in detail and create a bespoke marketing plan specific to the property. Often, even the most motivated seller will be hoping to get away with spending as little as possible on advertising, and this meeting is a great time to go through not only what comparable properties have sold for, but how much was spent on their marketing campaigns. A vendor might balk at the idea of a $15,000 campaign, but when they see that Property A used such a campaign to secure $60,000 over reserve while Property B skimped on advertising and sold for significantly less that they’re aiming to get, the value of VPA is clearly demonstrated.

Another big change we’ve noticed is that the top performers in metropolitan Melbourne are scheduling a second VPA meeting partway through the sales campaign to reassess the effectiveness of the marketing and the VPA budget, especially when foot traffic at opens has been lower than expected. Often, sellers who refused to adequately invest in VPA at the outset are more inclined to boost their advertising spend as the auction creeps closer. 

What advice do you have for successfully selling Vendor Paid Advertising?