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Common Real Estate Ad Terms and Their Relationship to Selling Price

FreakonomicsThose of us who have dealt with the real estate market, we are all too familiar with the many terms used to describe a real estate property. Terms like “spacious”, “state of the art”, “charming”, etc., they all bring up different mindsets. To the untrained real estate investor, these terms can be confusing. However over time you start to get an understanding of what they really mean. For example, a “great neighborhood” often means that the houses in the neighborhood are nicer than the one being sold. No one will go out and say they’re selling you the ugliest house on the block, rather they’ll put a positive spin, such as you have a great neighborhood.

In any case, in the book Freakonomics, they did a detailed study of the many words used to describe real estate properties and they found strong correlations between the words used in the ads and the selling price of the properties. Now before I go on, please note that correlation means that the two items are related but it doesn’t mean that one causes the other. So for example, there is a correlation that cars painted yellow get in fewer acccidents. Does this mean that if you paint your car yellow you’re less likely to get into a car accident? Not at all. One does not explain the other. You have to look at other factors. In this particular example, the reason that yellow painted cars get into fewer accidents is because of the type of person who buys and drives a yellow car rather than just the color of the car.

Getting back to words that describe real estate properties, it’s been found that the 10 most common used in real estate ads do have strong correlations to the selling price.

Top Five Terms With Higher Selling Prices

Granite
State of the art
Corian
Maple
Gourmet

Top Five Terms With Lower Selling Prices

Fantastic
Spacious
!
Charming
Great Neighborhood

Very interesting! Why do these specific terms have strong correlations with higher or lower selling prices? The book goes on to debate this, and I’m sure some of them are obvious once you start to think about it. However for today what’s interesting to note is that the words in your real estate ad will ultimately affect your selling price.

Again, I strongly recommend the book Freakonomics. There’s lots of great information on many a topic, not just real estate. If you’re interested, you can buy a copy here through this Amazon.com link.



 
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Comments:

  •     Keith Casey
    · May 27th, 2006  · 5:26 pm  · Permalink

    I think there’s an unspoken code that makes words and phrases like these stick out to people. It’s like that blind date phenomenon where if the “fixer” says to the “fixee”…. “Oh, they have a great personality”, it means something very specific. 😉

  •     Steph
    · May 29th, 2006  · 4:44 pm  · Permalink

    That’s exactly it! Thanks for the great example for those who aren’t as familiar with real estate terms.

  •     Jim Cronin
    · July 23rd, 2006  · 4:35 am  · Permalink

    Funny, as I mentioned regarding your post on realtors selling their home for more… I refernec the same topic here in an article in the SD Tribune:
    http://realestatetomato.typepad.com/the_real_estate_tomato/2006/07/all_your_terms_.html

  •     Ellie
    · June 11th, 2012  · 6:14 am  · Permalink

    These words have higher selling prices because they are expensive items. If a house had granite counter tops, maple cabinets or a gourmet kitchen, it is going to bring more money that a charming home without these pricey items. Makes sense to me.

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