Pricing real estate has never been a more important skill than it is today. Yet, when I stand in front of a room full of students, I can tell by their faces that I'm the first person presenting basic fundamentals of pricing and valuation to them. In many states (including mine, PA), the day we give a real estate salesperson's license out, we empower that person to go out the very next day and price a home for sale! This is scary--one of the reports I read within the past week was the case of a disgruntled homeowner suing the agent for allowing them to pay too much for the home. In virtually every state, pre-licensing real estate courses are 'taught to the test'- -in other words, instructors teach what students need to know to pass the test. Yet, virtually any new agent you talk to will agree that the courses did not tell them how to actually sell real estate. Never has education and training post licensing been so important for an agent's success. The course I taught last week was a CE course I wrote, entitled: "What's it Worth?" As I type this blog, I'm in a hotel room--tomorrow I'll do a GRI "Pricing and Evaluating Real Estate". Here's my point: if you are a new agent, a seasoned agent, or even a successful, seasoned agent--you can never learn too much about anything--including pricing and valuation. There is an old adage in real estate: "A property priced properly is half sold already." Pricing property properly for a seller leads to satisfied clients and listings that sell. Pricing property improperly for a seller usually leads to frustration on both parts--you can't sell it, they won't reduce it and everyone gets to be miserable. Pricing property properly for a buyer leads to satisfied clients that will return to you to sell the home, because you didn't let them overpay--or if they did overpay, you told them they were! Allowing a buyer client to overpay for a house is not only a violation of your fiduciary duties to your client, it's a stupid way to practice real estate. I've written several articles and courses on pricing property, and I've got a new course in the works right now. If I'm not in your neighborhood--find a qualified instructor and course near you and figure out how to do this right. And, if you are a consumer, it goes without saying that you ask the agent several direct questions: "How will you arrive at a price for our home?" "How long have you been in the business?" If not long, ask: "Is there someone at your office with more experience who will help you price my home?" "What factors do you consider when you price a home?" "What homes are competing against mine?" "What is the average list price/sales price ratio in my segment of the market?" "What are the average days on market?" By the way, if you are an agent, and you can't answer these questions--you better learn how!
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, SRS 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com |
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