It's hard to justify cost unless you can show a return. Real estate photography is one such case. We know that paying more for photography can result in better photos, but will it benefit an agent?
I decided to tackle that question by analyzing a dozen similar homes in my working area. All homes are in the Rancho Conejo community, selling in the last year. All homes in this community are similar: all are built in the past 15 years, are in high demand with low inventory, there is a strict HOA to ensure upkeep, and all are priced mostly between $700k to $900k. Having an apples-to-apples sampling, I analyzed three different things:
1. Time on market. A comparison on a scale of 1-10 on how quickly each property sold. The quicker the home sold, the lower the number (10 took the longest to sell, and 1 sold the fastest).
2. Photo quality on the MLS. This is subjective, so I used simple things like if photos were tilted, had a fish-eye effect, were blurry, dark, or overexposed. A higher number means higher quality photos.
3. Price point: How well this home was priced for the market. A home priced below market value got a higher score, and those priced above the market got a lower score.
The data was then sorted by time-on-market to show how photo-quality and price-point compared to how quickly homes sold.
The graph at the top of the page shows the results from all 3 of these factors, but the "trend" is what tells the story. Below is a trend, for instance, of time-on-market versus how well the house was priced (its price-point):
As you'd expect, houses that were priced better sold more quickly (higher price-point means "priced better than market" ...priced to sell).
The next graph is where we start to get into the meat of the photography issue, comparing time-on-market versus photo-quality:
At first glance, it looks like higher quality photos sell homes more quickly. However, one could argue that photo quality is just a side-effect since it follows a similar line as price-point, as shown in this next graph when comparing the trends of all 3:
But there is more to this graph than meets the eye:
First, since both price-point and photo-quality follow a similar trend, they both seem to have an effect on selling homes quicker. If photo-quality was more erratic than price-point, then photo-quality would be a non-factor. But that's not the case; instead, there is some correlation to higher photo-quality and reduced time-on-market.
Second, there is a slightly more rapid increase in photo-quality compared to price-point, providing also a quicker break-even point on time-on-market. And, although both price-point and photo-quality level off at some point, photo-quality continues to increase, suggesting that photo-quality is more of a factor than price-point.
Thirdly, although this data shows it took both price-point AND photo-quality to sell homes more quickly, there were cases where higher photo-quality was the key factor, not price-point. For instance, look at properties G and I in the original graph below:
In the case of properties G and I, price-point was low yet photo-quality was high. Since the time-on-market was declining, this suggests that photo-quality was critical: even though some properties were not priced to sell, their photo quality was high, and they did sell quickly. This could be the case, for instance, of high quality photos bringing in more prospective buyers, giving the property a better chance of being sold to someone.
More important to this though is that photo-quality has a vastly lower cost to an agent than price-point. For instance, increasing photo-quality is in the hundreds of dollars (sometimes less), but reducing the price-point can result in many thousands of dollars lost in commissions. For example, if an agent gets 1% of the commission from selling a $700,000 home ($7000), and if that agent can sell one more home a year (due to their listings having less time-on-market), then that agent can net an additional $7000 per year. So if that agent sells one home a month, and for each home they list they spend an extra $100 for higher quality photos, then that agent only spent $1200 to get an extra $7000 in commissions. That comes out to an extra profit of $5800 for that agent, and for just 1% commission, and for just selling one extra home. If that agent were selling more homes per month, that agent's profits become exponentially higher, especially if that agent nets more than 1% on the commission...then we're talking magnitudes of profit for that agent.
Many factors determine how fast a house can sell, and a dozen homes may not be enough to prove it. However, with an obvious trend showing how quickly homes sell compared to a known factor (how well a house is priced) to an unknown factor (photo quality), it's safe to say that there is a benefit in paying a little more for real estate photography to get much higher return on home sales. It shouldn't come as a surprise when you think about it: all high-priced commodities have high quality marketing material, which includes high quality photographs. If you were going to buy a $100,000 car, you'd expect to see top-notch photos of the car, so why expect to spend less in advertising for something that sells for five to ten times as much?
Bottom Line: Quality counts. Will homes with bad photos sell? Sure. Will they sell for as much or as quickly as those with higher quality photos? According to this data, not likely. Higher quality photos can turn houses faster, resulting in higher profits for agents.
Would you like to see the difference for yourself? Give me a shout and I'd be happy to show you first hand how a small cost for higher quality photography can result in higher returns.