Advertising Home Listings the Wrong Way

In this past weekend’s National Post, there was a listing for a home which read as follows:

The overall real estate market may be down by about 33%, but that’s not the case in Toronto’s central core, says real estate agent Kevin Loberg.

In 2009, 613 homes sold for more than $1-million. In 2010, 825 sales homes have sold in the same price range. That’s an increase of almost 35%, Mr. Loberg says.

Twenty-four Gardiner Rd. is on a 51×128 foot lot in the central core’s Forest Hill neighbourhood.

Custom-designed by Richard Wengle, the 4,515-square-foot home has an additional 1,640 square feet on the lower level. A stone fireplace in the living room, a combination kitchen and breakfast room and a walkout to a stone patio from the family room and foyer are features of the four-bedroom, six-bathroom home.

The home has hardwood and stone floors, walk-in closets and a sauna.

I haven’t seen the home. I have no idea what it really looks like inside, outside, or how it compares to other homes on the street. I have no idea what other similar homes have been selling for in recent months.

I do know that this home is over-priced.

The listing didn’t have much room to describe the features of the house. As such, one might expect the broker to put as much emphasis into the value of the house as possible. Instead, the broker spent the first two paragraphs talking about the market in general. That’s 40% of the listing.

As a seller, I might be interested to know what other homes in a particular area have been selling for, and whether the prices in one area reflect the market in a larger area. As a buyer, this sounds like the seller knows the asking price is too high, and is trying to justify it.

When the seller has to convince you why the price is high before discussing the product being sold, it’s a warning sign. The seller has a confidence issue – they can’t even talk about the merits of the product until they prepare you for the high price based on factors completely separate from the actual product being sold.

What does this mean to you?

When you pitch a product to a customer, the price should not be relevant to the early parts of the discussion. The discussion should instead focus on the merits of the product or service, the value it contains, and only then should the price be explained. If a complicated explanation for a high price is still warranted, then your prices are simply too high for what you’re selling, or you’re selling to the wrong people.