Recently on ActiveRain I have read several blog posts addressing overpriced homes, both for sale and for rent. The common theme among these posts is that overpriced homes are a lot of work, a nearly impossible task and, in the end, result in an overworked, underappreciated agent and a disgruntled client. The conclusion of these posts is always that overpriced homes are not worth the effort.
With all due respect, I disagree. There is much more to price than, well, price.
EARN THE PRICE BY PROVIDING THE VALUE.
Yes, you read that correctly. There is more to price than price. To wit:
1. CALL BACK- We receive a considerable portion of our work (both clients and renters) simply because we are the first (or even the ONLY) folks that called back!
2. TREAT RENTERS WITH RESPECT AND POLITENESS - When an interested renter enters our office, we stand to greet them and we offer a drink and make them comfortable. We treat renters with respect and politeness that it seems many other places may not.
3. HONEST - We will walk renters through the qualification process and offer them advice on how to help themselves qualify or let them know that, from what they’ve shared with us, they likely won’t qualify. We charge what it costs us to run the credit reports and aren’t simply trying to make a buck off this aspect of the business.
4. MAINTENANCE- We have a position in our office that is primarily devoted to taking in maintenance calls, scheduling the service and following up to ensure that it is completed correctly.
5. COMFORT- Our office is modern and comfortable. It seems that many property managers decorum is “nostalgic” and reminiscent of the 1960’s. If folks are comfortable they will be more relaxed and open-minded to the value being provided.
6. QUALITY – The clients that tend to approach us to represent their homes very often have a sense of pride in their homes that allows us to represent quality, clean homes to our potential renters
7. PHOTOGRAPHY – We are the only company in our area that utilizes a knowledgeable photographer to highlight the beauty of the homes that we represent.
8. EXPERTISE – Not to be forgotten is the experience of the industry that we bring to the equation to the benefit of both clients and renters. Our expertise is expressed in our confidence based upon the numerous compliments that we receive.
9. STRONG MARKETING – Our internet presence is unmatched in our market, we are the only bloggers in our market, and our sales skills are honed from years of experience.
The net result of the above is that we have a very high resident retention rate. In fact, renters most often move on from one of our homes due to employment or family changes, NOT due to anything associated with our service or our homes.
Many successful companies such as Apple, BMW, Nordstrom etc have proven that people will pay for service and quality. I am not so pompous as to liken our company to those successful powerhouses, but I am alluding to the fact that they have smart business strategies and I believe that those strategies can be carried forward into our industry.
People will pay more for an iphone than another phone. People will pay more for a BMW than another car. People will pay more for Nordstrom than Sears. Why will people do this? People will pay for the OVERALL VALUE that they know they are receiving.
So, I ask, what is the correct price? Yes, there are market reports that can be pulled from the local MLS but do these averages reflect the VALUE that you can add to the equation? I say that they do not. Everyone can’t be Apple or else everyone would sell the iphone.
If you are offering more than a simple home, with value added service, do you deserve a price that includes that value? I say that the answer is a resounding “YES.”
We are in a small market and yet through February 2, 2012 we have had 14 move-ins in just 2012! Yes, small market and 14 move-ins in only 5 weeks. Results speak for themselves.
There are other firms from near our area that are starting to work in our area and even long-term firms form our area that don’t provide the value described above – and their prices reflect that.
From my perspective, they are actually undercutting the market. This, in a sense, is the exact opposite of the “overpriced homes” formula of so many recent blog posts. But, I stand my ground that there is more to price than price.
Yes, there are examples, such as Wallace Gibson recently wrote about, of extreme overpricing that is simply unjustified. But, I think there are many homes out there that are called overpriced but they are not.
My advice to Agents and Brokers – EARN THE PRICE BY PROVIDING THE VALUE.
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