The Economics Of Template vs. Custom Web Design
I hear from other real estate professionals, "I just can't afford a custom web design!" But is that really true or is that a myth? And what really are the advantages and disadvantages of a template site compared to a custom site? Let's take a look at the economics of having a Template or having a Custom website design. But first we need to understand who really are today's real estate agents.
According to a member survey by the National Association of REALTORS®, members earn significantly more the longer they have been in the business. Members who have been in business for 6 to 10 years earned a median $58,700 in 2004, up 18.6 percent from 2002. REALTORS who have at least 26 years of experience earned $92,600, up 37.2 percent from two years earlier. The median personal income for all REALTORS was $49,300. When divided by 52 weeks = $948.08 per week divided by 46 hours per week = $20.61 average income per hour. Many of you are making much more than that, but we will use that as a basis for our examples.
The typical NAR member is 52 years old, (yet 1/4 of members are under 40), works 46 hours per week, and has been in the business for 9 years; however, 15 percent of members have been in the business for 1 year or less. Overall, 54 percent of members are women. REALTORS have been with their current firm for a median of 4 years, and only 15 percent work fewer than 20 hours per week.
The national median sales price for November 2006 was $218,000, according to NAR's Real Estate Insights newsletter for January 2008. So a sales price of $218,000 X 3% = $6,540 divided by 50% = $3,270.00 to a sales associate who is on a 50/50 split with the brokerage firm. Of course, this would be higher, depending on the associate's split with the company.
Template Website Costs (February 2007)
Here are a few examples of 3 popular template providers and their associated costs -
 http://www.nancygrasman.com |
http://www.dchomes.com |
Advanced Access (from http://www.advancedaccess.com)
$599.95 + monthly hosting at $49.95/month
QuickHomesIDX (MLS) search and auto-emailing - $39.95/month
Premium Marketing Service - (Additional budgeted pay-per-service fees apply) $2,499.95/year
The Meta Direction program - $499.95 One-Time Fee
Year 1 Costs - $4,678.65 (the 50/50 agent's income from a $311,910 sale @ 3% fee)
Year 2, Year 3, etc. Costs - $3,578.75 (the 50/50 agent's income from a $238,580 sale @ 3%
 http://www.michaelhabeeb.com |
Agent X Sites (from http://www.alamode.com)
Professional XSite and Xsellerate - $699/year
Listings Xpress - $199/year
IDX MLS feed additional (estimate $50-$100/month)
Year 1, Year 2, etc. costs - $2,098.00 (the 50/50 agent's income from a $139,860 sale @ 3% fee)
 http://www.thompsonrealty.com |
http://www.viewazre.com |
Point2 Professional Sites (from http://www.point2agent.com)
Professional Version - $39.95/month
IDX MLS feed additional (estimate $50-$100/month)
Year 1, Year 2, etc. costs - $1,679.40 (the 50/50 agent's income from a $111,960 sale @ 3% fee)
While these template site companies can set you up with a quick presence on the Internet, these sites have problems that can be associated with them too.
1. You have to do all the work... of customizing your website content to describe and reflect who you are and how you practice your real estate business in your area. How many hours can that take? As a novice web designer, you can take well over 30 to 40 hours (or a lot more) of your time "customizing" an inexpensive template to now truly display you, your services and all the benefits you offer your real estate prospects. If you are also trying to include basic search engine optimization techniques to get your template found in Google, Yahoo and MSN, that will take time - not only implementing these, but learning basic SEO techniques as well. So how much are you worth an hour for your time? Even following NAR's statistics from above, you are worth at least $20 per hour! So you have to add in the cost of at least another $200 to $800 or more of your time just to get the website set up and running and being "found".
2. Agents and brokers insist on trying to be "instant" web designers and search engine optimization specialists. "Oh, I don't need a web designer. I can do this myself! I can get a template for under $100 a month with all the different "looks" they offer and get started." Gee, isn't that the exact same thing the For Sale By Owner says to us? "Oh, I don't need a real estate agent. I can sell my house myself. I got this For Sale sign at the hardware store for just a few dollars, I can place an ad in the newspaper, and I certainly know how to show my own house." And just like many FSBO's who fail at achieving the results they hoped for, countless agents who thought they could customize a template by themselves in their spare time and then get it found on the Web will have their web sites fail too. You know to show homes, write sales contracts or fill out listing agreements, but do you know how to customize your "title" tag on each web page? How do you write a good "meta name='description'" tag? What the heck is an "alt" tag and how do I effectively use it? All of a sudden, customizing a template is not that simple anymore, now is it?
3. To many visitors, these template pages can all begin to look alike! The template provider offers the exact same pages to every subscriber using their system. So you loose the impact of having a web presence that truly reflects your personality and professionalism if your site looks just like the next agent's site. Take a look again at the AA web site templates up above - both chosen by 2 competing agents here in the Washington, DC area - www.nancygrasman.com and www.dchomes.com.
4. How easy is it to get "tech support" to answer your questions or guide you through the "construction and customization" process? Can you always get someone on the phone? Or do you have to correspond by email only to find help? How much time does that take out of your busy schedule while you are waiting for answers to go beyond the initial "learning curve" of building your web "office"?
