In today's market it is very important to price the property right from day one of the listing. We can't afford to miss and neither can the seller. The following are key points in helping you set the price right at the time of listing.
Do a Competitive Market Analysis (CMA)
I hate to overstate the obvious but, I recently went on a listing appointment where 3 out of the 5 agents who interviewed didn't bother to bring a CMA with them. Interestingly enough I have the property priced at $69,900 and most of those agents felt the property was worth $100,000 or more. What type of service can you provide if you realistically can't determine what the property is worth? Sellers need to see the value just not hear it.
Make Your Point Efficiently
Don't bring 30 or 40 homes currently on the market and 28 solds spanning back 2 years. Bring 4 to 6 actives that show the truest market conditions, the same goes for recent solds and expireds. If you give sellers too big of an overview of the market, especially a shot of all of those overpriced actives, all you are doing is giving the seller an opportunity to see the top end of the market of homes that either don't specifically relate to the subject property or have little to no chance of selling. Only use highly relevant comparables to help the seller get past what they want for the house as apposed to what it's worth.
Over Pricing Costs Money and Time
Let's just say that in your opinion "you gotta do what you gotta do" to get a sign in the yard. What ramifications does this have on your business and the seller. Take a second and add these numbers up.
Cost and Time of:
1. Yard Sign... Including cost of putting it up and taking it down.
2. MLS Fees
3. Advertising for at least 6 months. Web, print, etc...
4. Lost leads because you sound crazy when you tell a prospective buyer the price of the home.
5. Phone calls from an angry seller, who trusted you as an expert in the market place to price their home right
6. You cost the seller 6 months of interest payments against their current mortgage.
These numbers when added up are huge.
Price Reductions will be Easier to Come by Later
If you do a great job of showing the seller where they should be priced, but they just don't want to see it your way at first, but they want to list with you, use this to your advantage later. If the difference in their price and your price is marginal, let's say 5 to 10 percent. You don't want to lose the listing over this, but remind the client that if the property doesn't sell in 15-30 days a price reduction will be in order.
I hope these thoughts help you get the home priced right the next time you list or sell a house.
Felix Krynicky
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