How to Price a Property so it Sells

By
Services for Real Estate Pros with Brivity
http://actvra.in/52HY

As a realtor, you know that property price determines the level of interest in a property you're selling. From the number of showings, to the number and quality of offers, to the way clients rate your services, price is key. Unfortunately, it is also something about which clients have very strong opinions—understandably so. They want a price that nets them the right amount of money, reflects improvements they've made, and captures some of their nostalgia for the home. It is incumbent on you as the real estate agent to walk the difficult line between pleasing the seller and setting a price that reflects true market conditions. This article teaches you how to set a price that reflects real-time, location-specific market realities while still catering to your clients, using Keller Williams real estate agent and ActiveRain owner Ben Kinney's pricing strategy.*

The Problem: Inconsistent pricing strategies

Implementing a fact-based pricing strategy addresses several challenges that realtors face:

  • Realtors list a property at the highest price possible to please the seller
  • Sellers argue that the price is too low (or doesn't reflect the amenities and features)
  • Banks won't loan on a price set higher than the appraised value
The Solution: Ben Kinney's 5-5-5 strategy

A successful pricing strategy is Ben Kinney's 5-5-5. By identifying 5 comparable active properties, 5 comparable pending properties, and 5 comparable sold properties, the pricing will be accurate.

Step One: Pick comparables 
Be sure to pick comparable properties that have the same features, lot size, and square footage, that are located in the same area: 
  • 5 Actives
  • 5 Pendings
  • 5 Solds
Step Two: Bracket the price
  1. Find comps that match the lower price
  2. Find comps that match the higher price
  3. Pick a range inside which you're willing to list the home
  4. Pick a goal price you feel is appropriate
  5. Pick a price that you wouldn't go above
Step Three: Show sellers the bracket during the listings presentation (but not the actual price)

Put the comparable properties in front of the sellers and let them pick the price.

 

 


Brivity CMA automates the 5-5-5 strategy, setting up bracketed pricing based on actual active, pending and sold properties, rather than a pre-written price.


 

If you show them the facts, they can't argue. Facts take emotion out of the discussion. This puts the responsibility on the seller to identify the price.

Why the 5-5-5? What to say to sellers about pricing

Remember, the goal here isn't to tell sellers their home is worth the highest price possible. It's to tell them the truth.

Ben Kinney's Pricing Script

To the seller:

"I'd like to share a strategy that allows both you and me to figure out how to price the property because I need to sell the property three times. Number 1 - I have to sell it once to an agent so they'll show it to their buyers, because 86% of sellers are represented by real estate agents. Number 2 - I have to sell it to the buyer to get them to write an offer. Number 3 -  I need to sell it to the bank, and the bank's appraisers to get them to give a loan on the property.

Since it has to be sold so many times to so many people, you have to use the same data that all those people use when getting a home price. And the appraisers, the banks, the agents, and the buyers use active home listings, pending home listings, sold home listings. This is why we developed the '555' that allows us to accurately price a property by picking out 5 comparable active properties, 5 comparable pending properties, and 5 comparable sold properties. 

These properties together create a bracket. The bracket is the highest price you'd consider selling your home for and how many days on market that that will take. You might be able to price your property 5% higher, but it could then take you a year to do it. Or, the lowest possible price for your home might sell in a day. We need to pick where in the range you'd like your home sold. Does this sound like a good way to price your home?"

By using the 5-5-5 strategy, you use the data to tell the price, which takes the emotion out of the equation and keeps potential sellers from being offended. With 5-5-5, you're using the same method as successful ActiveRain Owner and real estate agent Ben Kinney. This will get you more offers and ultimately allow you to sell more properties.

 

 

*Who is Ben Kinney?

Ben Kinney is a nationally-known entrepreneur, professional speaker, trainer, author and real estate agent. He is the author of Soci@l; is listed in The Wall Street Journal and REAL Trends Top 100 agents for both total units sold and total sales volume in the nation; and was named "Innovator of the Year" by Inman News. The Ben Kinney Companies includes 1000+ agents in nine Keller Williams brokerages spanning from Bellingham, Washington to Austin, Texas and across the pond to London, England; a collection of real estate-related software companies, including ActiveRain, Kwkly, Brivity and Blossor; and the Ben Kinney Training Organization.

 

Ben's newest product, Brivity Platform, connets all of your Brivity systems and other industry tools into one platform, so you only have to pay for one bill. Brivity Platform, the only system that guarantees success in real estate. Sign up for a demo here!

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Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Michael J. Perry 04/05/2017 08:49 AM
  2. Ginger Harper 04/23/2017 03:11 PM
  3. Denise Samouilidis 08/06/2017 12:27 PM
  4. Jay McHugh 08/13/2017 06:56 AM
Topic:
Home Selling

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Rainer
1,250
Sadia Anwar
www.aarz.pk - Saegertown, PA
Associate SEO

A very interesting read indeed. It is always difficult to find the appropriate price for this. Many online portals are now in the market, making this process easy.

Jul 15, 2017 03:31 AM #78
Rainmaker
463,499
Sharon Kowitz
Fonville Morisey-CRS-SRES-ABR-GRI-E-Pro-CREN Cary, NC - Cary, NC
Cary, NC Relocation Specialist ~ Buying or Selling

Great details for listings... I use a similar system for listings but will incorporate more of this system. TX

Jul 15, 2017 05:56 AM #79
Rainmaker
728,083
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

For listing it is often an issue to tune down home owners greed that their home will sell more than what it is worth. I bring my credentials on valuation from 3 largest companies often have to give them a relality check.  I suggest they can get the home appraised and often they either do not want hear it and then back down.

Jul 15, 2017 02:08 PM #80
Rainmaker
2,381,538
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I'm always a little bit surprised how many people don't know how to price properly on whatever they're selling

Jul 16, 2017 08:42 PM #82
Rainmaker
1,239,663
Mike Cooper
Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Sales Pro

Excellent information, and I will definitely use it on my next listing. Thanks for the tips.

Jul 23, 2017 09:32 AM #83
Rainmaker
409,383
Steven Nickens
Elite Pacific Properties Maui - Wailea, HI
R(S)GRI ABR, Maui Real Estate Hawaii

Great article, really appreciate the presentation. 

Jul 23, 2017 03:33 PM #84
Rainmaker
2,381,538
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

This type of post is always very informative no matter how many times in various forms.

Jul 23, 2017 06:39 PM #85
Rainmaker
2,381,538
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

This is another great universal evergreen topic that always has a place because the only to know how properties are going to sell relative to whatever goes on A follow

Jul 26, 2017 06:52 PM #86
Rainer
328,119
Betsy N. Robinson
Everything Pines Partners, LLC. - Whispering Pines, NC
CNS

I like your idea of involving the Sellers in the review process by acrtually participating rather than just sharing the results of my analysis.  Thanks for the suggestion.

Aug 01, 2017 02:54 AM #87
Rainmaker
243,557
Brenda J. Andrew
ULTIMA REAL ESTATE - Corpus Christi, TX
Professional Realtor in Corpus Christi, TX

Thanks for sharing this one - great tips.  I love the part about sharing with the seller you have to sell the home 3 times.  This is so true, sometimes the Realtors control which homes the client will see, & if the appraiser doesn't see the value, nothing is going to happen!

Aug 01, 2017 06:04 AM #88
Rainmaker
23,679
Lee Keadle
Carolina One Real Estate - Charleston, SC
Keadle Real Estate Group

I've lost out on several listings in the past year because I told the seller honestly what I thought the property was worth based on comps - usually by looking at more than 5 actives, pendings, and solds. In these cases, another agent told the seller to list at a higher price, and we all know that it's hard for sellers to dismiss a higher price even if there's no guarantee it will sell for that!

Aug 01, 2017 11:45 AM #89
Rainmaker
463,499
Sharon Kowitz
Fonville Morisey-CRS-SRES-ABR-GRI-E-Pro-CREN Cary, NC - Cary, NC
Cary, NC Relocation Specialist ~ Buying or Selling

In this low inventory market Lee, I have lost a few this year....I never lose!!!

However, sellers are hearing homes are multiply offers and they are looking for more money so those not so ethical agents who give higher prices are getting attention.

Aug 02, 2017 05:18 AM #90
Rainmaker
16,446
Denise Samouilidis
Mirsky Realty Group - Palm Beach Gardens, FL
Jupiter Abacoa Sales & Beach Front Luxury Homes

Probably one of the best articles this month. Great advice. Think I'm going to reblog this for my followers!

Aug 06, 2017 12:25 PM #91
Rainmaker
374,679
Bruce Kunz
C21 Solid Gold Realty, Brick, NJ, 732-920-2100 - Howell, NJ
REALTOR®, Brick & Howell NJ Homes for Sale

Seem like a great process. Getting the sellers on board with the correct pricing is often difficult and this will help get that done.

Thanks for sharing,
Bruce

Aug 13, 2017 06:28 AM #92
Rainer
179,221
Peter Davies
Borawski Real Estate - Northampton, MA
Exceptional service, without exception...

Thanks for sharing these great tips Ben!

Aug 13, 2017 07:54 AM #93
Ambassador
1,625,859
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

I do not understand about Pending. We do not know the contract price on Pending properties. What it gives you? What is the difference between Active and Pending then?

Aug 13, 2017 08:12 AM #94
Rainer
4,337
Lauren Seligson
Ask Lauren - York, PA
Networking to better assist those who, Ask Lauren

Intresting read. Always great to hear what others are using with success 

Aug 13, 2017 03:47 PM #95
Rainer
89,115
Mega Team Real Estate
Realty ONE Group Alliance - San Mateo, CA
San Francisco and Peninsula Real Estate Concierge

Great details for listings.  Thanks for sharing these great tips,  Ben!

Aug 13, 2017 10:51 PM #96
Rainmaker
838,410
Ginger Harper
Coldwell Banker Sea Coast Advantage - Southport, NC
Your Southport~Oak Island Agent!

 

WE all need to keep these points in mind when pricing a home to sell

Aug 18, 2017 06:19 PM #97
Rainmaker
3,477
Christina Toole
Seed Branding Agency - Henderson, NV
I design real estate offices to fit your brand.

Love Ben Kinney! Great article. Shared! :)

Aug 18, 2017 09:58 PM #98
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