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Pitching your home: lessons from the world of real estate

A home is probably the largest financial investment you will make. So, what do we as the buyer respond to in the advertising? This aspect was studied by the ‘Indiana Jones’ of economics, Steven Levitt, who tends to discover treasures wherever he digs.

Below are ten terms commonly used in real estate ads. Five of them have a strong correlation to a high sales price, and five have a negative correlation. Can you guess which are which?

Fantastic
Granite
Spacious
State-of-the-art
!
Corian
Charming
Maple
Great Neighbourhood
Gourmet

Surely, as advertisers, we would have no hesitation in using the strong sales terms, such as ‘Fantastic’, ‘Charming’ and ‘Spacious’, over a word that seems to fall flat on the page, such as ‘Granite’?

Well, actually the opposite occurs.

Terms correlated with a higher selling price

Granite
State-of-the-art
Corian
Maple
Gourmet

Terms correlated with a lower selling price
Fantastic
Spacious
!
Charming
Great Neighbourhood

Three of the five terms correlated with a higher price are physical descriptions of the house: ‘Granite’, ‘Corian’ and ‘Maple’. That’s pretty useful – it describes the kind of house and, if I like that feature, it has more value for me as the buyer. And then chances are the market price will rise. ‘Gourmet’ and ‘State-of-the-art’ also position the house for a certain type of person, once again increasing its market value for those who respond.

Words like ‘Fantastic’ and ‘Spacious’ are vague, and do nowhere as well as terms that describe something specific. Perhaps buyers have become immune to the positive vocabulary of estate agents, where ‘Great neighbourhood’ could signal that the house in question is not very nice - but others nearby may be.

In the study of estate agents selling their own home, it is interesting to note that the empty adjectives (such as the telltale “!”) are avoided in favour of descriptive terms. And estate agents, according to Steven Levitt, get more for their homes than the rest of us.

We are often told to increase the ‘volume’ of our communication with ‘Lowest Price’ and ‘Best Value’ in such gifts to graphic art as the price flash. For items that do not consume the major part of our lifelong savings, these techniques do work. However, with all those price flashes and exclamation marks, sometimes a nice, clear description of what’s on sale can be most refreshing. And it could also drag up the market price with it.

So next time you pitch a high-ticket item (such as yourself), focus on the real differentiators – your ‘fantastic’ service and other sales puffery may make you feel good, however it means very little to the prospective client.

Reference: Levitt SD, Dubner SJ. Freakonomics. A rogue Economist Explores the Hidden Side of Everything. Penguin Books 2005.

About the author
Sid Peimer is a marketing consultant based in Cape Town. For more on pitching, visit his state-of-the-art gourmet website now! www.straplanning.com