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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.”

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