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Locution, locution, locution

Real estate study reveals 'If you say it the wrong way, you can actually turn people right off.'

Nothing deters a house-hunter like the terms "must-see" or "motivated seller," suggests a new Canadian study on language and real estate. Paul Anglin, an economy professor at the University of Guelph, analyzed home sales in Windsor, Ontario, over a four-year period.

"There is a basic question about how house prices are determined," Anglin said. "I was building on earlier research that was looking into that question."

Anglin found that when realtors described houses as "beautiful" or "gorgeous" they sold 15 per cent faster and for as much as five per cent more than a comparable house. A house that was described as in "move-in condition" sold in 12 per cent less time, on average.

"I guess it makes sense that every house is beautiful to somebody," Anglin said. "I'm surprised that just attaching the label would make a difference."

Realtor Ian Shaw of Toronto said it's important to accentuate the positive aspects of a house but said the adjectives must be accurate. "If you say it the wrong way, you can actually turn people right off," he said. "I think language is quite important."

Anglin found that when houses used descriptors including "as is" or "must see" or promised a "motivated seller," the houses took longer to sell and often sold for less.

Homes described as “beautiful” moved 15 percent faster and for 5 percent more in price than the benchmark. “Good-value” homes sold for 5 percent less than average.

Another finding in Anglin’s study was that the plea of “must see!” was received about as enthusiastically as a dinner-time telemarketing call. Homes with listings using the words “must see” had a statistically insignificant effect on the number of days they took to sell.

Listings where the word “landscaping” was heralded sold 20 percent faster, and homes in “move-in condition” took 12 percent less time to sell than the benchmark, although the study showed “move-in condition” had an insignificant effect on the sales price.

Some words work better than others, Anglin’s study found. Listings in which the seller said he or she was “moving” sold for 1 percent less in price compared with 8 percent less when the seller was “motivated.”

Real estate listings, not unlike personal ads, are crafted to minimize blemishes and maximize perceived selling points. So if “enjoys moonlight walks on the beach and cooking together” means “I’m unemployed and am looking for someone who won’t always expect to eat out,” then “needs TLC” might mean “this house will have you on a first-name basis with the clerks at the local hardware store.”

Anglin’s study isn’t alone in efforts to determine what language moves the market. Last year, the effect of listing language was covered in a National Bureau of Economic Research study that looked at whether real estate agents selling their own homes hold out for a higher price. (They do; the study found they take longer to sell but fetch a higher price.)

Descriptions of houses that indicated an obvious problem – such as “foreclosure,” “as-is” and “handyman special” – drew substantially lower sales prices. Words that suggested desirable attributes – “granite,” “maple,” “gourmet” – translated into a higher sale price, the study found.

One problem discovered was that “superficially positive” words that, in effect, damn with faint praise – such as “clean” or “quiet” – had zero or even a negative correlation with prices.

Those findings echo those made in a 2000 paper called “Real Estate Agent Remarks: Help or Hype?” researched by University of Texas finance and real estate professor Ronald C. Rutherford.

Rutherford found, among other things, that buyers read between the lines. If you can’t find anything better to say than “new paint,” perhaps it’s best to say nothing at all.

Positive and factually verifiable comments such as “golf” or “lake” drew increased prices; other presumably positive comments regarding new paint or carpet brought lower ones.

“What you say needs to be extravagant,” Rutherford said, “or the signal that is received by buyers is that it’s not worth talking about.”

But what do sellers know? “New paint” appeared on 15 percent of the listings and was the most commonly listed comment.

Rutherford said sellers would be best served by a listing with “just the facts, ma’am.” “In today’s market,” he said, “if it’s a good deal, you need to convey it with factually verifiable language.” An example: “Needs repairs,” he said.

December 23, 2006 in Selling Toronto Real Estate | Permalink

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Comments

The above article suggest words like "move in condition" and "handyman special" increase the time to sell, thus can hurt the listing. May I suggest to add these words to the list "words that can hurts" .

Amit Kalia
http://www.realestate-ontario.com/

Posted by: Amit | Jan 11, 2007 8:19:26 AM

Very true! Move-In Condition Throughout seems to be biggest draw in spring. I think they should do study for different times of year. Also, the one that TOTAL 100% puts me off is "Shows Pride of Ownership". ACK! Puke! If agents only knew how over used that is.

Posted by: J.Adams | Dec 24, 2006 11:21:48 AM

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