How to Price a Property so it Sells

By
Services for Real Estate Pros with Brivity
https://activerain.com/droplet/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 8 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 Copeland 08/06/2017 12:27 PM
  4. Jay McHugh 08/13/2017 06:56 AM
  5. Danielle O'Brien 09/12/2017 07:13 AM
  6. Faye Y. Taylor 02/14/2018 09:37 AM
  7. Bob Crane 02/15/2018 10:25 PM
  8. Ricardo Romero 02/28/2018 12:30 PM
Topic:
Home Selling

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Rainmaker
2,626,198
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

The whole psychology of price never fails the fascinate me no matter how much I’m used to it because of how well it works.

Jun 11, 2018 04:00 PM #156
Rainmaker
692,815
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

Good information that we all know, but it helps to be able to provide concrete facts to a stubborn seller asking why their overpriced home hasn't moved yet.  

Jul 16, 2018 03:53 PM #157
Rainmaker
2,626,198
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

this is getting so much SEO! It’s all really very impressive on so many different levels combined.

Jul 20, 2018 11:17 PM #158
Rainmaker
2,626,198
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Nice to meet you,
Kevin Mackessy You’re totally right about the clarity of the message. There’s really no ambiguity here at al!

Jul 20, 2018 11:18 PM #159
Rainmaker
327,465
Blatt + Cutino
Keller Williams Coastal Estates - Monterey, CA
Broker-Associate 831/206-8070*Call today*

In my area, much of the time there are not 5 Actives, or 5 Pendings that are truely comparable. Lots of solds though!

Aug 04, 2018 07:40 AM #160
Rainmaker
692,815
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

What's great is when sellers think they know more than you, especially if you taken these above steps.  They only believe they know what the price is and it is not founded in experience of local knowledge.  

Aug 17, 2018 02:12 PM #161
Rainmaker
8,843
Robert Caston
Home Junction Inc. - San Diego, CA
Real estate data company - Home Junction Inc.

Very good advice. The more data you can provide, the better the decision. But more importantly,  in this day and age when people have to make so many decisions and sometimes freeze, the more information the easier it is to finally help people decide.

Aug 25, 2018 07:32 AM #163
Rainmaker
359,154
Bo Kociuba & Buster Elliott
Berkshire Hathaway HomeServices Anderson Properties - Mustang, OK
HOME is Where Your Story Begins

Great information .. thank you for sharing Brivity Platform! So simple and to the point. 

Aug 25, 2018 07:46 PM #164
Rainmaker
892,064
Ginger Harper
Coldwell Banker Sea Coast Advantage - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

This is good information for us all.  Thanks for sharing..

Sep 04, 2018 11:42 AM #165
Rainmaker
11,718
Missy Banks
Allen Tate Real Estate | AgentBecky.com | MissyBanks.com - Charlotte, NC
AgentBecky.com CHARLOTTE HOMES FOR SALE

Great information!  Thank you. 

Sep 08, 2018 07:08 AM #166
Anonymous
Yaqub Nipu

I like to read such articles and to search for them I use official site

Sep 08, 2018 12:10 PM #167
Anonymous
Yaqub Nipu

I like to read such articles and to search for them I use official site

Sep 08, 2018 12:12 PM #168
Anonymous
Yaqub Nipu

official site

Sep 08, 2018 12:14 PM #169
Rainmaker
214,889
Lesley Wilson-VanGoethem
Innovative Realty Solutions Group - Winter Springs, FL
Residential Real Estate Broker Associate

great post! Always give a range, and have the sold data to back it up.
I also add in expired, as it shows what happens when a property is overpriced

Sep 21, 2018 05:46 AM #170
Rainer
1,075
orchid rose
hawai - Hawaii National Park, HI

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Sep 21, 2018 10:02 AM #171
Rainmaker
692,815
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

Will add to be able to stand up to the seller and reassure them that the highest price they have in their mind is not something that is realistically attainable.  

Sep 21, 2018 11:51 AM #172
Rainmaker
2,626,198
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I’m revisiting these and realizing that I can use some other techniques to do some staging. Thank you.

Sep 23, 2018 10:45 PM #173
Rainmaker
2,626,198
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Not everybody can be that realistic because they don’t have the experience that other people do and you have that specific kind of experience that is really vital. Kevin Mackessy

Sep 23, 2018 10:46 PM #174
Rainmaker
174,577
Kevin Vitali
EXIT Realty- Massachusetts Short Sales & Residential Sales - Tewksbury, MA
Helping Massachusetts Home Buyers and Home Sellers

Great post and a great approach to working with sellers to get the best list price.

Sep 27, 2018 06:25 AM #175
Rainmaker
886,850
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Get strategy to get homes priced right. There is nothing worse than price homes over its value.  

Oct 11, 2018 05:19 PM #176
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