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February 4, 2021
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The Mathematics of a Real Estate Virtual Tour

virtual tour math

Properties that are getting listed now are selling within days of being listed. There is a serious shortage of inventory in markets throughout the United States. For those agents with listings that is really good news. Easy money. All they need to do is get the listing signed up and take a few pictures, write a good description and put it up on the MLS. Many are not even holding open houses. Sound familiar? But wait. Is that really all that an agent should be doing? After all, we are talking about easy money once you get the listing! A slam dunk. Why spend anything extra if properties are selling so quickly?

Then the question becomes is it about the real estate agents fee or the amount of money you can generate for a seller? Of course, the correct answer to this, as we all know, is we have a fiduciary responsibility to the seller to maximize the sales price of their property. But how many agents are really doing everything they can to do that?

Sell Homes for More

This is where virtual tours come in. They are something that should be included in every listing package. Matterport, the 800-pound gorilla in the virtual tour business and valued at $2.3 billion, has done studies that have shown that properties with virtual tours closed 20% – 30% faster and for 9% more than those without virtual tours. In these times, the 20% faster is not really a factor. On the other hand, the 9% higher price is an important consideration. Now, these are averages and are not going to happen on every property sale. Over the long run they will average out.

Why do listings that include a virtual tour sell for more? It is quite simple. The more people you can get to see the home, the more likely you will find the buyer willing to pay a higher price. It is all about maximizing the exposure of the listing. Especially in these days of COVID-19.  It also provides the opportunity for potential buyers to share the virtual tour with their sphere of influence to get their opinions whether they are local or remote.

You say that you already have two or three offers on every listing. You may or may not have found everyone who would be interested in making an offer. An even higher offer than those that you have in hand. Without the added exposure, you will never know.

Time for the Math

How much does a virtual tour cost? You can see in our pricing the base cost is $135 for the first 1000 square feet and then $0.10 per square foot after that. So, let us do the math. Let’s say we are talking about a 3000 square foot home. The cost of the virtual tour would be $335. We do not charge the fee until either the sale closes or within four months whichever is sooner. In this market that means you do not have to pay until the home sells since they are selling so fast.

How much would you expect a 3000 square foot home to sell for in your market? For convenience sake let’s just use $400,000. If you could get 9% more for a listing in this price range, that’s another $36,000 for the seller and at 3% another $1,080 in commission.  A pretty good return on investment over a 2 – 3 month period that it will take to close.

Be the Hero

Bottom line. Investing $335 in a walkthrough virtual tour has the potential to generate an additional $36,000 for your seller, especially in a hot market. Who is the hero?  Not to mention you can use it on your next listing presentation to help you get your next listing. Wouldn’t you like to become known as a listing agent that leaves no stone unturned. Making sure you have all the marketing tools in all your listing packages will make a huge difference in the long run.