A new approach in real estate has been discovered that may be a step in building our depleting market back up to where it was. As mentioned in this weeks Tennessean, more and more brokers and agents are adopting auctioning as a way to sell luxury homes. Since 2008, Nashville’s real estate market has taken a turn for the worst as people have halted their spending.
To counteract the downturn, broker Dwight O’Neal opened Realty Trust, a home auction company with a heavy emphasis on advertising. What he found was that marketing to the masses simply does not work for the current market. As a result, he uses a tailored marketing strategy that corresponds to specific target markets. O’Neal says messaging with a tighter focus may be a promising way to attract a larger audience. He mentions, “When money was easy, houses were flying off the shelves. It didn’t matter what the marketing was…Now that the market has changed, the old way won’t bring the same results” (source).
By targeting specific buyers, O’Neal believes that they will attract the attention they need in order to improve the markets current status. He also adds that traditional advertisements and lawn signs do not engage enough buyers and lead to underrated sales (source). So, one may ask, how does auctioning a house work? Several steps are taken in the home auctioning process. The first step Realty Trust takes is to conduct market research within a 30 mile radius of where the home is for sale. Specifically, his team complies statistics on buyers, income levels, net worth, spending patterns, and school preferences (source). His research and data results come from information providers such as infoUSA, Dun & Bradstreet, and even the U.S. census. For buyers that are outside the target area, O’Neal places advertisements in places such as The Wall Street Journal to attract national attention. After compiling their market research and demographic data, O’Neal and his team send notifications by calling, mailing, texting, newspaper ads, and television ads. All notifications are tailored to thousands of specific, potential buyers. O’Neal claims, “People have already gotten to the point in real estate that they’re tired and worn out with the traditional method of selling” (source).
The good news for auctioneers is that people looking to purchase have become highly interested in this new kind of buying. It is slightly ambiguous, which makes it interesting and exciting for people to become involved. According to the Greater Nashville Association of Realtors, “309 homes sold for more than $800,000 from last June to May; that’s 10 more properties compared with the previous yearlong period but fewer than the 2008 high of 315” (source). This shows that high income buyers are looking more and more to buy, increasing the likelihood of success for O’Neal’s auctioning strategy. Still, the “old” way of selling still remains and it steadily improving over time. Only time will tell how the two strategies will fare against one another once the market recovers (photo).