I’ve been reading lots of pricing discussions on AR lately, commenting on a few. So I decided it was time to lay our pricing strategy out there for everyone to read, and see if we can get some good feedback and ideas for AR agents to use in their business. (If you’re an experienced agent, you’re probably already doing this…)
It is a buyer’s market – haven’t read anything lately to contradict that! What is it? The law of supply and demand at work. Excess inventory puts downward pressure on prices. Buyers are looking for exceptional values in the current market.
So how do we convince sellers that we are pricing their property at the optimum price to sell today? Sellers want the highest price; we want a price that we can sell. The right price is the perfect balance of those two perspectives.
Principle #1. Know the property. The good, the bad and the ugly. We and the seller are going to have to accentuate the good, and the seller is going to have to fix the bad and the ugly. Anything less won’t stand out in the market.
Principle #2. Know the market. What comps have sold and not sold? Why? At what price? How long were the solds on the market and at what price? What are actives doing? How long on the market and why, at what price?
Principle #3. Establish a price range for the seller, with a specific price point recommendation in the range, backed up by the real market data that you now know.
Principle #4. Price to attract buyers. Properties need to stand out to sell. That includes price, appearance, terms – whatever you and the seller can agree on to make the property stand out in the market – price being #1 in today’s market.
Principle #5. Describe to attract buyers. Generic descriptions aren’t good enough to differentiate today. Get really good at writing property headlines and descriptions that stand out, or get some help doing it.
Principle #6. Establish reduction discussions. Have the discussion at the listing appointment. If the property isn’t getting a lot of attention in the first few weeks, have the follow-up discussion on reducing the price. Even better, have a schedule laid out and agreed upon in writing ahead of time based on market response.
Principle #7. Market everywhere! Anyone not marketing extensively on the web is missing the majority of the market. It’s not expensive, and lots of it is absolutely free! Read AR to find out how!
Principle #8. Follow up with your sellers! Have a weekly conversation with your sellers on what’s happened in the last week: phone calls, viewing stats on your web listings, emails. End the conversation with a recommendation on how to respond: if market response is good, let’s leave the price where it is. Not enough happening, let’s drop the price or do something else to energize the market response.
That’s the short version. It seems to be working for us. What can we do better? We would love to hear what works for you – twists, new ideas! What not to do in pricing might be a good discussion for another blog.
Thank you AR! We’ve learned a lot in a couple of months on AR, and have been gratified to be able to share some of our hard-learned lessons to help others, as well! Blessings!
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Yeah, I think the more experienced you are, the more you are willing to tell it how it is. This seller market though needs to realize it isn't last year or the year before. In an industry where change comes fast but sellers reaction is slow you sometimes have to push a little harder.
John and Susan...You have touched on what I feel is often the most difficult task to deal with in this business. In a perfect world, the Sellers will gladly accept the reality that the Market, not the agent, determines the price. At the extreme end of the spectrum, I would add that sometimes, as a professional we just have to walk away from an unrealistic Seller, and let them learn their lesson when they decide to list with an agent that will take their listing at any price, ignoring the reality of the marketplace. Like you said, what not to do could fill up another blog. Good post!