Proof That Psychographics in Real Estate Matter Most When Marketing a Home
What’s the point of marketing real estate? Isn’t everyone using the MLS or Redfin or Zillow or some aggregator portal? Isn’t real estate a commodity?
First, psychographics incorporate personality, values, attitudes, interests, and lifestyles. Do we target a profile or demographic of individuals when it choosing where most of our marketing dollars should be allocated?
I love when people assume that design, features, and strategy do not matter. An economic purist, the “ laissez-faire” fair type, will argue that the market always decides. There is a supply and a demand and no surplus or shortage, done. Let’s go for a beer.
However, there is no true free market economy and any government intervention immediately taints this theory, which leads me to my next point.
Real estate is such an infrequent transaction with a vastly unsimilar product mix at similar price points, and if that isnt enought you have a tremendous variation in buyer poole. Homes aren’t widgets and consumers don’t ask their realtor to show them where equilibrium is or where the supply & demand curves intersect before writing their offer. If you go a step further, in cities like LA with an older housing stock, the differences in property style, type, and size range immensely not only from block to block but lot to lot.
Why do some homes sell for more and much faster while others sometimes languish?
Knowing a properties flow, features, and location in relation to price are the standard appraisal basics but this is medium, and I’m not your standard agent.
First, who loves Airtable? I do. I use their sheet to create columns to compare property details before meeting with sellers. Some of the columns I write in are: paint color, technology features, flipped with taste/quality or lipstick, age of buyers, facebook/linked profiles of recent buyers (if I can find them), previous addresses for those buyers, how much they put down, where do they work, what kind of music do they like, price per square foot, houses style contemporary/spanish/midcentury/tradition, days on market, conversation notes from both the agent that repped the buyer and the seller. Let’s just say I go deep, really deep. 27–35 columns deep. Everytime, and I mean every time, there is a correlation. Amazing.
Who said data was the new oil? Well can someone please shoot that person a thank you text from yours truly? They are right.
Data tells a story. Lately I’m seeing mom’s as the primary breadwinners either as attorney’s in entertainment, engineering, or business in general. Other times it’s families that simply want to go for a Sunday morning walk with their lovely newborn and not encounter those Hollywood pleasantries, like the smell of fresh urine from Saturday night or seeing Tom passed out in his car with hamburger meat all over his shirt. (get it together tom!)
Why would anyone ever market your listing — your precious one of a kind home to a Westside or Central LA resident — if you’re in the valley?
Let me tell you, (like my type A little 4.5 year old munchkin always says).
Study 1: I sold a property in Woodland Hills and I was astonished that the majority of new buyers that purchased homes like mine hailed from the Westside or Central LA areas(Hollywood, Mid City, Grove, WeHo, SaMo, etc). Can you believe my buyer for that property came from Hollywood? Shocker! I know. The buyer admitted to me privately that he misses Tom on those Sunday morning walks.
Another listing in the Melrose district that I recently sold — can be traced back to a facebook promotion video. People assume that an area that is frequented by the young and trendy is also housed by those same individuals. News alert: most twenty year olds cannot afford to live in or buy 1.6–2.5M dollar homes. Their market value isn’t there yet.
I’m going to let you in on another big and juicy LA secret, one of our companies top listing agents sells a lot of property on the Eastside in areas like Mt. Washington, Silverlake, Echo Park and Atwater. We joke that those areas are where the rich hipsters live, but guess what? Your average Silverlake homeowner aka da hipster, who’s buying the freshest and rarest Nikes at Undefeated on Sunset, sometimes or mostly, whatever, moonlights as a coporate attorney or corporate head honcho somewhere downtown during weekday business hours.
The point is — we sometimes want to be or yearn to relate to something our profession or everyday life or current situation doesn’t provide us. That’s why researching recent buyers for properties most like yours yields that extra 2 or 3 or 5% above what an average preparation and marketing campaign would produce.
What about the census data? The most recent report is going on almost 10 years. The new one in 2020 will matter, but the 2010 one, well that’s 9 years. I produced a little human in half the time. Things change and sometimes fast.
Study 2: How did my buyer who was only considering a home in Westwood or West LA end up further east at my listing? Well, my video appealed to him, but the clincher was the energy and walkability I showcased in that video. Aha! Psychographics.
Other times its a young influencer couple making waves on the gram, or in the last few years I’ve seen many techy transplant couples working for the slew of new startups we’re seeing in town. If it’s a listing in Del Rey, Marina Del Rey, Venice or adjacent areas — I am buying Alexa or google home everything prior to putting the home on the market. I love opening the door for a showing and saying, “Alexa, lights on, music on, smooth jazz”.
For all I know, the person who worked on the product may be the buyer. What’s the data say? Is what I say. You never know until you dig it up. And if there’s little to no correlation you go out further for comps or you spend more in marketing on what you find.
When most agents present their marketing plan, they will usually only talk about the demographics of a potential target buyer, which is now standard practice. However, very few agents discuss the importance of psychographics.
Demographics include age/gender, race, location, and employment. Psychographics incorporate personality, values, attitudes, interests, and lifestyles.
If you know how people choose and compare products in your category (real estate), you know to structure and prioritize content (features/upgrades/paint color/layout in the home). Some psychographics are easy to ascertain. For example, we know these are instant gratification and push-button times. Need a car? Click a button on UBER. Need a movie? Click a button on Netflix. Need groceries or any product imaginable? Click a button on Amazon. Clicks are trending to voice and everything streams over wifi. The internet is one of the most critical systems in a household. Therefore, smart homes that are Alexa or voice-enabled may help you sell faster. Does your home sit near or walking distance to a place of worship? A potential buyer may find value in this realization. These are examples of lifestyle psychographics.
Additionally, you have to spend money to make money and sometimes tell your seller clients what they don’t want to hear, like “we have to upgrade or remodel a few rooms or areas before I can fetch you your price Mr Seller”. But if you’re in a living room educating and not pitching — most clients always agree.
I’m lucky. We offer our sellers up to 3% of the price of their home as a no interest loan for cosmetic upgrades like paint, landscaping, flooring, and minor repairs. The loan must be paid back in 12 months.
A move in ready home will always command more. If my sellers can afford to swing the bat, then we almost always hit homeruns when remodeling and then selling.
Is there a risk? Sure, but when you have 4–6 years of consistent data showing that over time updated or recently remodeled homes command the exact same additional percentage than ones that are not — well, is that a gamble? Yes, but maybe one most can stomach.
Design, good taste, and a systematic approach to analyszing data determines agent winners from losers in today’s market.
To be consistently effective, marketers must hone in on peoples’ basic desires and expectations. This is where psychology intersects with today’s marketing world. In order to make an impact, marketers need to understand consumer behavior and psychology.
One way the top real estate listing marketers appeal to potential buyers is through an emotional appeal. Those seeking the experience of a healthy family environment will respond to concepts that include happiness, humor, commitment, and nostalgia. We use videos depicting a large family having dinner in a beautiful house or a big moment in a person’s life like getting graduating high school in some of the photography inside our listings. Many times people assume the owners still lives there. Everyone can either relate to or long for these critical moments in life.
According to the National Association of Realtor’s Profile of Home Buyers and Sellers 2012, 65% of consumers in the real estate market were married couples. Taking this into account, our advertisements will typically aim to connect on a psychological level with this demographic by depicting arelatable concept. Those seeking the experience of a healthy family environment will respond to ideas that include happiness, humor, commitment, and nostalgia.
However, many home buyers look at more practical features when buying a home. They want to save time and money with easy commutes, live in quality neighborhoods, and buy a home that is energy efficient. When creating ads for practical people, real estate marketers must present minimalism and efficiency. The best listing real estate marketers need to show a mixture of emotional and practical marketing to appeal to a specific enough segment, so results are visible. Buying a home isn’t just a huge financial investment; it’s also an emotional investment as well. The market is the market is the market? Lessaiz faire? It’s not fair if I’m your agent.
Want to know more about my real estate career?
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