Homeowners are notoriously optimistic when it comes to the market value of their homes. Real estate professionals have the task of educating prospective sellers about the realistic price range their property will command. Yet when the comps fail to support a desired price point, the seller may react by dismissing the information - and sometimes, dismissing the agent!
Winning the listing in such cases requires giving the seller a sense of control, while keeping the price discussion in reality. Here's a strategy we saw in Residential Specialist magazine a couple years ago, with our own two cents thrown in!
During the listing presentation, give your seller 3 price strategies to choose from:
- Market Based
- Below Market
- Retail
The market-based pricing strategy is the go-to solution for agents, but it can underwhelm a seller. While market comparisons offer proof of local sales trends for similar properties, a home that is much newer or more distinctive than the comparable properties may be disadvantaged by this pricing method. Market-based pricing works best when a home's age, condition, location and amenities are unremarkable against the comparison properties.
Below-market pricing can create a sense of urgency in home buyers, and create bidding wars. However, this is not a guarantee. Highly-motivated sellers who are looking for a swift offer may be good prospects for this technique.
Retail pricing offers the potential for snagging a higher sales price, but it runs the risk of backfiring if the bank appraisal doesn't back it up. Homes that are in prime locations with high demand are a good candidate for this tactic. A price reduction can be offered if buyer traffic isn't generated, but by the time this happens, critical momentum has been lost.
Communicating the pros and cons of each strategy to your sellers, and letting them choose the pricing method, gives the seller everything they want to hear about price in one listing appointment. This can help prevent the client from shopping other agents and ultimately signing with the one who offers the biggest numbers.
To minimize the risk of a client choosing an unsuitable price strategy, be sure to explain the market reasons behind your personal recommendation.
Is it time to update your listing presentation? RealSupport can help you create digital and print marketing for virtually any aspect of your real estate business. Call 847-705-1655 today, and ask for Carrie!
Bonita Breit
Copywriter & Marketing Specialist
RealSupport, Inc.
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