Jun 272016
 

Real Estate Ad Terms

Some folks might think using words like “charming,” or “spacious” in a properly listing is smart and would result in a higher sale price. But in reality the opposite is true. Here are 10 common real estate ad terms. Half of them have strong positive correlations with a higher sale price, and the other half is negatively correlated.

16-06-common-real-estate-ad-terms-houses

According to the book Freakonomics by Steven Levitt and Stephen Dubner, the 5 terms correlated to a higher sale price are:

  1. Granite
  2. Maple
  3. Corian
  4. State of the art
  5. Gourmet

And the 5 terms correlated to a lower sale price are:

  1. Fantastic
  2. Charming
  3. Spacious
  4. Great neighborhood
  5. !

Words such as Granite, Maple, and Corian (a countertop brand,) are all definitive physical descriptions of a home. It tells any potential buyer exactly what the property is like. The terms Gourmet and State of the art, also connotes a place that’s ready to move in.

But on the other hand words like Fantastic can be a misleading description, as are other ambiguous terms such as Charming or Spacious. These words aren’t tangible enough to tell the buyer anything specific about the property. Mentioning a “Great neighborhood” might signal that this particular house isn’t that great and may not have any specific attributes worth mentioning, but at least other homes nearby are pretty nice. The last word on the list isn’t really a word; it’s an exclamation point. It feels like a feeble attempt to cover real shortcomings of the home with a false sense of enthusiasm!

The book also broke down the language used in a listing for a real estate agent’s own home. She indeed emphasize adjectives like new, granite, maple, and move-in condition. She avoided empty and interpretive portrayals like wonderful, immaculate, or the overused exclamation point. She used every advantage she had to increase her final sale price, including telling potential buyers that a nearby house recently sold for $50,000 above the asking price. But that doesn’t make her a bad person. Realtors are people too. They’re simply looking for closure.

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Feb 212013
 

There’s a lot of money in the advertising business and marketers are always trying to find opportunities to sell their company’s brand. Here’s a spin on the old prisoner’s dilemma. Hypothetically, let’s say there was going to be a grand football game and it’s projected to have the largest television audience in the world. Because of the popularity of this game, each advertisement spot costs $10 million.

Imagine you were in Muhtar Kent’s shoes. He’s the CEO of Coca-Cola and you had the final say in whether to advertise or not. Your chief marketing analyst is confident the company can expect to make $12 million in new soft-drink sales if Coke advertises in this upcoming sport event. That’s a pretty good financial outcome because it’s like making 20% return on your marketing equity. However, that is only true if your biggest competitor Pepsi Co doesn’t advertise too. Because if Pepsi also advertises in the same game then both companies are then only expected to make $6 million each in new sales. There is a limited amount of ad spots for the game and time is running out. You’re on the phone with the executives of the football committee and they need an answer from you right away. You don’t have time to call up Pepsi, or find out whether they are advertising or not. But you’re also certain that Pepsi doesn’t know if YOU’RE going to advertise or not and they’re faced with the exact same dilemma.

ko and pep advertising dilemma

 

What would you do in a situation like this? If you say go ahead and if Pepsi does the same then both businesses will lose market capitalization, your personal net worth would take a hit, and other shareholders won’t like how you lost their money by being greedy. If you back down and don’t advertise, and neither does Pepsi, then nobody loses 🙂 But what if Pepsi did advertise ( ・_・)

Coca-Cola AdvertisesPepsi Co AdvertisesPossible Outcomes
YesYesBoth Companies Lose $4 Million 🙁
YesNoCoke makes $2 Million
NoYesPepsi makes $2 Million
NoNoDoes not affect either company’s financials