The Psychology Behind Real Estate Listings

Gordana Davila

March 4, 2013

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Trulia recently launched its Real Estate Lab to deliver the inside scoop on the psychology and strategy of how consumers and professionals approach real estate. By statistically analyzing the words and phrases used to sell homes, Trulia can now unlock new insights into national and local housing markets across America. The first Real Estate Lab report examines the millions of for-sale homes on Trulia through November 2012, and reveals the phrases associated with the most and least expensive homes for sale, as well as some highly regionalized real estate terms. For the full report, see here.

Going Price of “Once-in-a-Lifetime Opportunity” Homes: $3 Million
Luxury home sellers often market their homes as a “magnificent estate” or “once-in-a-lifetime opportunity” to draw in prospective buyers. Homes described with these phrases are typically listed for more than $3 million. Other phrases associated with multimillion dollar listings include luxury home features and brands such as a “paneled library” or “Lutron lighting.” The phrase associated with the most expensive listings is “parlor floor,” which is the main and grandest floor of Manhattan townhouses and other big city mansions. On average, homes calling out this feature are priced at nearly $5 million.

Phrases in the Most Expensive Listings
# Phrase Average price of listings containing phrase
1 parlor floor $4,935,632
2 formal gardens $4,006,401
3 paneled library $3,740,836
4 magnificent estate $3,646,040
5 Lutron lighting $3,524,588
6 public rooms $3,451,456
7 once-in-a-lifetime opportunity $3,402,801
8 highest level $3,388,751
9 motor court $3,359,954
10 two powder rooms $3,346,560
Phrases appearing in listings with the highest average asking price. Among phrases appearing in at least 100 listings.

 

Hidden Costs of “Cute Little Bungalows”

Homes described as “cute little bungalows” indicate that they are very inexpensive. On average, these listings are priced at $62,000. However, cheaper homes for sale might have additional costs in the form of stripping toxic paint, removing mold, or extensive plumbing repairs. The phrases associated with the least expensive listings are often required disclosures such as “mold-like substance” or “lead based paint notices.” Additionally, the agents and brokers listing these very-affordable homes will usually mention a “minimum commission” because the standard percentage commission is too low on these homes, which are typically priced at less than $28,000.

Phrases in the Least Expensive Listings
# Phrase Average price of listings containing phrase
1 minimum commission applies $27,569
2 lead based paint notices $39,939
3 mold-like substance $45,094
4 defective paint $45,974
5 city inspection $55,661
6 repair plumbing system $59,064
7 cute little bungalow $61,870
8 septic repairs $62,004
9 hud owned offered as-is $64,547
10 starter home investment property $65,041
Phrases appearing in listings with the lowest average asking price. Among phrases appearing in at least 100 listings.

 

Regional Real Estate Must-Haves

Home sellers often use regional terms or highlight local must-have features to describe their home and neighborhood, and it’s a strong signal of what buyers want. For example, Whole Foods are found nationwide, but this grocery store brand is 10 times more likely to appear in listings in the San Francisco metro area than nationally. In addition, some features are exclusive to a region, such as walls made from local stone in Fairfield, CT.

Hyperlocal Listing Phrases

Phrase Metro
Lanai Honolulu, HI
Mirrored closet doors Ventura County, CA, and Orange County, CA
Pole barn Grand Rapids, MI
Roman tub West Palm Beach, FL
Solar screen Fort Worth, TX
Stone wall Fairfield County, CT
Glass block windows Buffalo, NY
Hearth room Memphis, TN
Whole Foods San Francisco, CA
Phrases that are 10 times more likely to appear in listings in the metro area in the left hand column than nationwide.

 

PRE-APPROVED QUOTES

  • With Trulia’s Real Estate Lab, we aim to reveal how consumers and professionals think and talk about real estate, and the strategies they use to buy and sell homes,” said Jed Kolko, Trulia’s Chief Economist. “Insights from listings and search behavior are the color commentary behind the price trends and other numbers that we regularly track.”

    • “In every market, you’ll find features that are special to that area – like glass block windows or solar screens – and regional words that locals use to describe home features, such as lanai and hearth room,” said Jed Kolko, Trulia’s Chief Economist. “Home sellers need to know the local lingo in order to appeal to buyers, and buyers need to know which hyperlocal features they should look for, especially if they’re searching in an unfamiliar city.”

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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.