There are a variety of options available when it comes to financing property marketing when selling Real Estate. The first thing you need to do is understand the vendor’s budget and what they’re able to afford. For many people, a lot of their wealth is tied up in their property and they may not have the liquidity (cash) on hand to sufficiently market their home.
Therefore you need to be prepared to arrange the different types of marketing financing available and when to use them.
What options are out there?
Marketing a property requires many components such as professional photography, printed flyers and signboard as well as online advertising. The most common way that people choose to finance this real estate property marketing are:
Vendor paid advertising (VPA)
This is the most common form of property marketing, where the vendor is invoiced at the beginning of the marketing campaign to cover all costs from the marketing schedule. This requires the vendor to have sufficient cash available to cover these costs, however they can also pay by credit card.
Once their property sells, they will recoup these costs. If the property is withdrawn from the market, the VPA has still been spent and cannot be refunded to the vendor.
Agent paid advertising
Where appropriate, the agent may offer to pay for marketing costs up front out of their own pocket. They will usually recoup these from their client’s sale price in addition to their commission, which they use to cover the marketing cost. This requires the agent to have sufficient funds available before listing the property to pay marketing providers.
This option may expose the agent to risks if the vendor withdraws their property or the property does not sell. On the other hand, if the property marketing costs are small, offering to cover the costs up front may be the difference between winning or losing a listing.
Financing property marketing through CampaignAgent
CampaignAgent offers vendors an integrated option to fund their marketing campaign with multiple repayment options. Vendors can borrow up to $25,000 or 2% of the estimated sale price of the property to fund staging, marketing and advertising costs. This loan can be repaid when the transaction settles or when the deposit is released for up to 6 months.
For both the vendor and the agent, this process is often the most ideal arrangement. It allows agents to run impressive campaigns to generate the most interest in the property, while reducing the vendor’s stress around financing their marketing.
There are many ways to pay for property marketing and we recommend that you consider all of them before deciding which option is best suited for your needs. Developing your knowledge about the options available will put you in the best position possible to convert leads into listings.