Brian Hickox introduced Gary Keller and Dave Jenks to an idea, a framework for understanding home selling in todays market. I don't think they needed it. I am certain that EVERY agent that I know DOES. Gary and Dave, introduced The Tale of Two Markets at Mega Camp 2007 in Austin. The accuracy, beauty, simplicity and power of this tool is crazy! Here goes...

First, have you said any of the following (to yourself or your peers)? "I priced the home right...it's just not selling." "My sellers aren't realistic." "My sellers won't listen to me." "I showed them all the comps." Would it make a difference, a quantifiable difference, to your practice if you could...nevermind...just follow my logic and then YOU decide how you can and will use it to set yourself up as the professional with the answers in the eyes of your sellers.

It doesn't matter what you are selling. Your product, once ON the market, is either IN the market or OUT of the market. There is no debate on that. What are the factors that make the difference? When it comes to homes, both of the factors that determine whether a home is IN or OUT of the market are BOTH controlled by the home seller. Those factors are condition and price. See the diagram below.

In a Sellers Market there is an abundance of buyers (higher demand) and there is a relative shortage (lower supply) of homes to sell. During a Sellers Market it can be tough to be OUT of the market. You can have an overpriced, three walled structure, held together with a blue tarp and bungee cords and get an offer...or three. In a sellers market TIME is on the side of and working FOR the seller.

Sidenote: It is at this time that it is easy for sellers to be right and not need a professional. What is it called when two unrelated developments occur that create an effect that is larger than either one of them could have ever created all by themselves? Combine a massive and prolonged Sellers Market with the web 2.0 evo/revolution and you have more NEW discount brokerages than Starbucks! Hmmm.

In a Buyers Market there is an abundance of sellers (higher supply) and there is a relative shortage (lower demand) of buyers. During a buyers market it can be tough for sellers to get position their home IN the market. Oh, if it was only that simple. During a buyers market TIME is on the side of and working FOR the buyer.

There are a couple of frames between the one above and the one below in order to make the conversation flow. So, by the time you get here, the picture is pretty clear. In order to be IN the market, Mr. Seller, your home needs to be priced lowest 10 to 20% compared to similiar homes and its condition must be in the top 10 to 20% compared to similiar homes.

But, when we take a close look at our market today, all real estate markets really, there are actually three markets...IN, OUT and CHASING. Homes that are IN the market received or will receive an offer without lowering their price or making significant alterations to the condition of the home. Homes that are CHASING the market were originally overpriced compared to similiar homes and are now dropping their price in order to get back in the game.

If you would like your home to be OUT of the market, just set your price by comparing to similiar homes that are currently ACTIVE and have been on the market for more than XX number of days. If you would like spend your time CHASING the market, just set your price by comparing to similiar homes that can't seem to fetch an offer so they are in the process of lowering their price, and sometimes improving their condition. If you would like your home to be IN the market, set your price compared to similiar homes that have very recently gone under contract and make certain that the home is clean, staged and has excellent curb appeal.

Homes are selling in only one market. In which one would you rather participate? When you present this information, what is the next thing that is going to come from your prospective seller?

"What price puts my home IN the market? And how much work do I need to do to get it IN the market?" 

Did that prospective seller just say "I need the help of a real estate professional to give me answers that I do not yet have."? Yep.

Notes: This conversation sets up a very high level CMA discussion. What does that CMA conversation sound like? What should you show up with in order to be prepared and get the proper outcome?

Call Kirk Rau at 253.376.5475 for more tips on using this to get the listing at the right price.