Why Newspapers and Home Sellers are Failing
Two seemingly different mediums collided in my brain recently.
First, I was reading a front-page story about a home that was struck by lightning and burned down the night before. I didn’t recognize the street name: Was it nearby or across town. My first inclination was to look for a map. Of course, there was none in the newspaper. My second inclination was to right-click something and Google-up a mapl my fingers actually flexed for the mouse.
Frustrated, I threw down the newspaper. Switching on the television, I fired up my new favorite show “Real Estate Intervention” on HGTV from the digital recorder. The show features real estate agents showing sellers comparable homes in their marketplace, to provide market perspective on how their home is competitively situated - especially on price. I like this show particularly, because I had a similar idea suggestion for REALTORS recently, and also because it shows how anyone who fails to ask, “What does my customer want?” is doomed to failure.
After the end of the show, I looked back down at the newspaper on the table and then back to the freeze-framed screen and declared out loud: “Newspapers and sellers just don’t get it!”
The central problem with newspapers and sellers is that they think it’s all about them. Newspapers write articles from their perspective. The style depends upon the writer (there are no journalists any more). Everything from style to grammar to selective presentation of the facts isn’t geared for the reader, but rather the newspaper’s needs to draw attention, sensationalize, and sell ads.
They take their reader for granted, and fail to edit their stories from the reader’s standpoint. Will the reader know where a certain street is, the background or credentials of a person quoted in a story, or that key issues of law, finance or politics in the story? So something as simple as including a map of a crime or fire or parade never occurs to the newspaper.
But looking for the map occurred directly to the reader.
In fact, most readers today are used to looking up all sorts of information as they absorb news. We are a generation of information people who right-click as we go, open multiple tabs in our browsers and cross reference facts, biographies and images. Reading a story has become a “participating” activity - and not just when we add comments at the end. The days of the “newspaper reports it, you accept it,” are over. We want to engage the story as readers. Moreover, we want the full story, not just the truncated, selective and writer-oriented perspective.
Every time a newpaper story fails to accommodate this new requirements of the reader, we throw it away and decreasingly wish to purchase it in the future.
Thsi isn’t to say that all newspapers are not trying. Some papers regularly surround stories with maps, charts, graphs, mini bios, call-outs, definitions and other content that anticipates the reader’s normal inclination to “right-click and open a new tab” for more depth. So it can be done - even in an offline medium like print. It’s just a question of perspective.
Is the newspaper about the newspaper, or about the reader?
The same phenomenon is hurting many sellers in the real estate marketplace. Every episode of Real Estate Intervention shows just how little sellers are able to learn the fundamental lesson, “It’s not about you. It’s about the buyer.” This show should be mandatory viewing for every POTENTIAL seller and it should be equally mandatory for every seller during the first week on the market. The cringing absurdity of the sellers profiled on the show is the archetype of why so many homes are overpriced and unsold.
Every REALTOR should be forced to watch this show. Even the repeats.
In each episode of Real Estate Intervention, the camera follows sellers who are taken on tours of a recently home sold homes similar to theirs and nearby currently-competing properties In almost every case, the homes shown to the seller are priced less than their asking price. And in almost every case, the seller tours the home tearing it apart. Standard lines from sellers on this program:
- “I would never have chosen those colors.”
- “I like my [kitchen/tub/back yard] must better.”
- “I don’t like these types of [tiles/countertops/appliances/fixtures].”
When presented with competing homes with more square footage, the sellers come up with rebuttals such as “It’s just more space to clean.” When shown kitchens with newer appliances, the common response is, “Yes, but I hate stainless steel appliances.” In fact, my favorite episode was from Baltimore, where the sellers were shown an outdoor patio with good views of the neighborhood and beautiful floral landscaping; Their own outdoor space was completely enclosed by tall walls from the attached townhouses.
The seller actually said, “Well, you can see more from this patio but in our patio, you’re completely surrounded by walls, which is more private.”
Right - like a prison. Over and over again, the camera shows sellers who cannot see things from the perspective of the buyer. Every flaw in the competition is a “personal preference,” even though the sellers aren’t the ones personally deciding between their home and the competing properties. Even when another home as signifantly more space (one episode featured a comparable home with twice as much square footage) the sellers continue to defend their price and “betterness” because it appeals more to “them.” So they can’t adjust their price, terms or conditions because, in their minds, they’d choose their own homes if they were making the decision.
Of course they would. They already live in them!
As any REALTOR knows, it only gets worse, especially when you combine sellers who demand their agents advertise in the local paper. It’s a double-whammy of self-centeredness that only amplifies the liklihood of failure. Even the sellers on the television show are filmed using a laptop to look for their next home. Yet so many sellers insist that the buyer for their home is going to find it from the newspaper.
Neither the newspaper nor the sellers get it.
Where does this leave the real estate industry? One choice seems obvious: Use interactive marketing to deal with buyers in a declining market. RIght now, very few marketplaces can justify a listing-based business strategy. Even stable markets are stymied by lending chaos. And the cost and frustration of working with sellers and advertising tools that cannot or will not see the “buyer’s perspective” is causing company after company to close its doors.
Another choice is to prepare ourselves for these inevitable situations, like addressing seller who are unable to adopt a buyer perspective. Practicing and preparing to have tough discussions - about how buyers do not care about their decor, how buyers prefer standardized rather than customized color schemes, how buyers jump at more space at a lower cost, how buyers aren’t emotionally attached to the home and have no fear in making significantly lower offers, and how ultimately, the buyer can afford to wait longer than sellers can keep making upside-down mortgage payments. Are agents prepared to have these honest conversations? Are managers practicing these discussions and helping build their sales force’s experience and confidence for tough challenges? Is the company mentally and financially prepared to walk away from bad business tied to emotional intransigence?
The irony of the situation is that many available homes don’t feature “emotional” sellers. A significant number of bank-owned properties feature sellers who are Wall-Street finance-types with no emotional attachment to the home. Their decisions are made on raw data - like square footage and mortgage-margins. They don’t put these properties in the newspaper, but excusively online because they cannot afford to lose any more money or time. And while they reject crazy buyer offers with the flick of a pen, they also set prices squarely in the market. Sometimes, even lower than average, because they are unemotionally trying to sell the property, without ego. They price it to attract buyers and sell.
With a second wave of foreclosed and investor-controlled properties hitting the streets, it’s going to get even harder for “self-centered” sellers to compete. Their personal preferences are going to place them in a significant disadvantage to the facts-only foreclosures. Buyers may come to prefer to shop foreclosures more than occupied listings. Price still trumps the frustration of dealing with the faceless bank.
The very existence and emotional intransigence of an actual seller may cause more deals to sour, and buyers to just look for unoccupied foreclosure homes “off the shelf.”
Buyers will learn that an “as is” home is easier to buy than endless negotiations with an emotional buyer who fights every finding in the inspection that requires repair or price concession. It’s a twist of fate that the real reason why newspapers and homesales are suffering today is that neither understands that the customer sets the rules. REALTORS can be caught in the middle, if they are not careful. Advertising in the paper wastes resources and generates little business; representing unreasonable sellers will do exactly the same.
As Sam Walton famously said, “Find out what the customer wants and give it to them.” It’s time for the newspapers and the housing industry to learn this lesson before its too late.
(Matthew Ferrara is CEO of Matthew Ferrara & Company, a technology organization that delivers training, consulting and technical support to real estate companies worldwide, including their new "Support on Demand" REALTOR help desk service available at 866-316-4209.)
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