Pricing ahead of the market ---- can we convince the seller?

Real Estate Agent with Alain Pinel BRE 01367196

Pricing ahead of the market, in real estate parlance, involves pricing a property at less than current market value/trend. The rationale is to attract the biggest pool of buyers. If it stimulates multiple offers, then great!

When the market trend shows sales are slowing down, prices are dropping --- it's not enough to merely react, otherwise, we'll be "chasing the market".

What will it take to convince the seller to take the stance of leading the charge? If we don't/can't sell, we all lose!

  • Property sits longer on the market. And the longer it sits, the less attractive it becomes to potential buyers who will naturally think the worst (there's something wrong with the property)
  • Listing becomes "stale" and agents may forget about this property and not show it to their clients
  • If sellers are trying to move up, they miss the opportunity to buy the next suitable home at a price and at the interest rate they can afford
  • Prices listing price follows. More than two price drops lates, sellers moan even louder "We should have sold it then!".
  • Sellers pull the listing, and "wait until the market gets better"

But convincing the seller to price ahead of the market isn't easy. Realtor faces these challenges:

  • Other realtors competing for the listing may "buy the listing" by presenting seller with a picture that the property is worth more than what this realtor thinks is a marketable price
  • Sellers moan that they will lose too much money, especially after factoring in their improvements, or when they quote recent sales (never mind that they're comparing their property to those in better neighborhoods)
    • Sellers should remember that market value is determined by how much the buyer is willing to pay for it and not what the seller thinks it's worth
  • Sellers not receptive to price reductions, or if they are, they do it in small increments
  • Similar homes come up for sale and are priced just a hair below the subject property's price --- so it becomes a pricing war (reminds me of competing gasoline stations that price their gas within 1-3 cents of each other)

Guess it comes down to seller's motivation, open-mindedness to suggestions, and understanding of the LOCAL not national market trends --- and of course, the realtor's ability to present a convincing case.


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  1. Fred Griffin 11/16/2010 03:24 PM
ActiveRain Community
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Ross Quintana
Real E Smarter - Spokane, WA
Real E Smarter Real Estate Coach - 509-362-1966

I create a strategy with each listing up front. I don't force things on my clients but show them great data and then we set the strategy together. It doesn't help to want it more than your clients. Your choices is how will you help your client.

Nov 07, 2010 06:10 AM #1
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Independent Broker Serving Sonoma County, CA

This is a tough one, every seller has that certain price in their head based on what the last house sold for. Oh, but Mr. Seller, you didn't spend $50K on a kitchen remodel like your neighbor did.

Nov 07, 2010 06:13 AM #2
Janna Scharf
Keller Williams Realty Coeur d'Alene - Coeur d'Alene, ID
Coeur d'Alene Idaho Real Estate Expert

Right now pricing is absolutely the key.  It can overcome anything else...

Nov 07, 2010 06:43 AM #3
Fred Griffin
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

I love Zig Ziglar and Norman Vincent Peale. but let's temper our Positive Optimism with a Dose of Reality.   Prices here in Florida are going to conitnue Downward. 

Pricing Ahead of The Market is a great concept, Pacita.  If we can just get this across to the Sellers!

Nov 07, 2010 07:00 AM #4
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA

Very well written Pacita - hope the public finds this post as it is very educational.

Nov 07, 2010 10:22 AM #5
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Pacita Dimacali

Alameda/Contra Costa Counties CA
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