Negotiating vendor paid advertising (VPA) upfront is a daunting task for some agents, but for Andrew McCulloch it’s part of his daily schedule.
“As a business owner, I also quickly learnt that any VPA my team and I did not recover became a direct expense to the business and impacted on my profitability,” Mr McCulloch told Real Estate Business.
As franchise development manager for Harcourts, Mr McCulloch developed policies within the business that focus on training the sales team to ask for and negotiate VPA.
“The fear that agents have today of asking their vendors for money to market their property comes down to self-limiting beliefs,” Mr McCulloch said.
“When I need some repairs done on my vehicle, there are always two parts to the bill – some will be for labour and some for parts. Why should real estate be any different?”
Mr McCulloch’s reliance on VPA stems from when he first started in the industry.
“As a young agent … I knew no better,” he said. “Nobody had told me that I shouldn’t ask for VPA, so I went into every listing assuming it was part of my job to negotiate it, and guess what? I got VPA 100 per cent of the time. All I had to do was to ask for it and show them the benefits.”
Ray Ellis, CEO at First National Real Estate, correctly predicted that VPA would become standard for some offices at last year’s CEO roundtable.
“We’ve had examples where offices have started it, and it’s become the norm,” he said.
“They just had the courage to do it from the start.”
Mr McCulloch believes VPA also weeds out sellers who are not serious about selling their property just yet.
“A vendor really has nothing to lose in listing their property just to test the market," he said.
“You can find yourself working very hard to secure an offer for a vendor only to find they are really not ready to sell. Obtaining VPA means the vendor has some skin in the game – it shows they are committed to sell and are happy to invest in the sale of their home.”