Skip to main content

Perception is Reality


Recently, I came across an article about the top grossing movies of all time, and my mind immediately ran to the likes of Titanic and Star Wars.  However, the author of the article factored inflation into the equation to determine which movie truly had the greatest draw with the public – his argument was that a movie coming out today will make far more money with ticket prices being higher than one that came out 50 years ago.  With those adjustments, Gone With the Wind came out on top.  It’s not a bad flick, but I was a little surprised.  However, you can’t argue with the numbers based on popular vote via purchases.

Here’s the odd thing, though: according to the American Film Institute (AFI) – the self-appointed vanguard of all things cinematic – the greatest film of all time is Citizen Kane, a movie about a man who was fueled to succeed at all costs by his resentment for his parents for naming his childhood snow sled “Rosebud” instead of something way cooler like “Widowmaker” or “Death on Rails”.  (I’ll admit, I’ve never seen more than 30 seconds of this movie.)  Ironically, Citizen Kane didn’t even rank in the top 10 highest-grossing films of all time.  How could a movie be so great if it wasn’t that popular?  Hmmm. 

We have a similar problem in the real estate and mortgage world – let me frame it up for you: according to a recent survey by the National Association of Realtors, only 13% of adults 34 years of age and younger realize they can buy a house with a down payment of 5% OR LESS.  In response to this, the findings of a joint research study by Fannie Mae and California State University-Fullerton prompted this conclusion: “Correcting consumer misconceptions may be a more efficient approach to expanding homeownership opportunities by encouraging households who may already be qualified to own homes.”  Translation: we need to simplify our marketing. 

Whether we market a property to emotional buyers by displaying beautiful photos and extolling the virtues of the public schools, or we go after the dollars-and-cents buyers by demonstrating that their monthly payment can be less than what they’re paying in rent, we’re not acknowledging and addressing the even more fundamental concern of having enough for a down payment.  If buyers believe they don’t have enough money for a down payment, all the beautiful photos and statistical analyses aren’t going to do any good: they’ve already shut themselves off from even considering a purchase. 

It’s possible to get an FHA loan with only a 3.5% down payment. Perhaps the next email drip for a $200K house should simply read, “For only $7K down, this could be yours.”  On a conventional loan, there’s an option for a 3% down payment. So, for a $300K house, maybe it makes more sense to advertise it with a headline like this: “Down payment of ONLY $9K!”  When an agent is being interviewed by a potential buyer, maybe a good opening question from the agent should be, “Did you know that since the 1980s, FHA has backed home loans with only a 5% down payment?”  Headlines and questions like these get to the heart of the matter and help buyers immediately see it’s possible to buy now rather than wait!


Failing to realize this need to change how we market is like AFI stubbornly insisting that Citizen Kane is the greatest movie of all time.  We may have the “greatest” social media posts or the “greatest” marketing brochures, but folks aren’t going to be converted from potential homebuyers to actual homebuyers if their perception is that they don’t have enough for a down payment.  As the old saying goes, perception is reality.  There’s another old saying from Gone With the Wind that applies – something potential homebuyers are going to tell us if we don’t clue in and change: “Frankly, I don’t give a damn.”

Comments

Post a Comment

Popular posts from this blog

Saving Money is Music to Your Ears (Posted January 9, 2017)

For all the “old” people out there, you’ll instantly know the name Daryl Hall.   For those of you who are still on your original set of adult teeth (perhaps because you got your braces off fairly recently), Daryl Hall is a musician (the blonde half of the duo Hall & Oates – the one who DIDN’T have a mustache that looked like it was straight out of an ’ 80s adult film) with a number of albums (albums a re these big, black 12-inch vinyl “platters” that look like a pregnant CD) that have been certified as gold/platinum and hit songs to his credit, some of which he recorded himself and some he wrote for others.   Going back to 2007, he started a show on the internet called Live from Daryl’s House ; in 2011, he took it to cable where it currently airs.   The concept is relatively simple: he has musicians from all genres and eras come to his house to jam with him and his band.   In between songs, they talk about music and memories, and they usually end up eatin...
Post a Comment
Read more

The Naked Truth About Home Buying

It’s highly likely I’ve already written about this, but I’ll try to make it entertaining at least.   There’s a guy who works in ou r office who suffers from kidney stones – and from what he’s described, “suffers” might even be a little too tame a word for it.   As an aside, though, when you ask him how painful the experience is, he gets an odd smile and says, “It’s the most intense pain I’ve ever experienced, but it’s hard to describe.   I’ve heard a lot of people compare it to the pain a woman experiences while giving birth.   To that, I must say, those people are big, fat liars!   I’ve been in the presence of a woman giving birth, twice, and her pain has to be 100 times worse.   They’re passing the equivalent of a Buick.   I’m passing a pumpkin seed.”   He’s always been a colorful fellow. He’s had this wonderful condition for over a decade now, and the stones make their appearance about every 18 months or so.   Up until recently, ...
Post a Comment
Read more

The (Missed) Shot Heard 'Round the World (Posted April 11, 2016)

At last year’s ACC Tournament semifinal (basketball) game between Notre Dame and Duke, the halftime entertainment included giving someone an all-expense-paid trip to the game with the chance to take a half-court shot for $1 million.   Scott Park was the lucky winner, and he and his wife made the trip from Virginia Beach to attend the game and for Scott to take the shot.   When the time came, he took the ball in both hands, eyed the basket, ran to the half-court line, and launched the ball into the air with everything he had.   And it sailed . . . t o about the foul line.   Almost immediately, this seemingly epic failure of a grown man to throw an air-filled leather ball just over 45 feet was turned into vines and videos that littered the Internet.   Comments were immediately flowing like “can you believe how bad that shot was” and “why did that dude even try”.   With the virtual anonymity of the Internet, people can be brutal! What these anonym...
Post a Comment
Read more