No thanks Mr Seller. I'd rather work on my tan!

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

 Hi there. Today I feel inclined to write about one of my pet peeves. OK it's not colored post titles, how to blog, signature spam in comments or any of those "hot" topics. It's actually about real estate and pricing.

I've been an exclusive listing Broker for 13 years, in my market, Poinciana Fl, and pricing properties correctly is my expertise. There's not too much I'm good at in life but when it comes to pricing, listing and getting homes sold, I'm an expert. My success is simple, price it right and sell it. To me, nothing is as important as pricing. It will overcome market conditions, location and property condition. The reality is there are only two things that we have control over, property condition and pricing. So you have to get them right.

In my market, values are declining and they are declining rapidly. A property that was priced correctly 60 days ago may now very well be overpriced. So it is imperative that we set the right figure from day one in order for the Seller to maximize their selling price. And we have to continue to monitor the market and make adjustments when necessary.

So how do you arrive at the right price? Well, I'm fortunate that most of the homes in Poinciana are very similar. When I'm looking at recent sales it gives me a real good picture of what similar homes are selling for. Also, by arranging recent sales in order of most recent and factoring in pendings it will show me the current trend. If the most recent sales were at $195,000, $197,000, $200,000 and $205,000 then it is very easy to see a declining market. If the current pendings are also in the lower range them I need to price my listing in the lower range. Maybe $195,000. The other thing I must look at is what's on the market. If there are 50 other similar (age and sq ft) properties on the market, from say $189,000 to $229,000, I need to factor that in as well. Pricing is not an exact science but is an acquired skill.

My goal is to always have my listings in the top 10 (lowest priced) when another REALTOR® is doing a MLS search. I achieve this by Range Pricing. In the example above, if I knew market value was around $195,000, I would Range Price the property from $189,000 to $199,000, using $189,000 as the list price. What I have now done is put my listing in the number one position of similar properties. This means it will get shown more often and assuming the property condition is correct it will sell. And will usually sell close to $195,000. If I had priced it at $199,000 hoping to sell at $195,000 it would have moved it up to the middle of the list and would not be shown as often, if at all. Now, I know Range Pricing is controversial and is not doable in all markets, I'm just using this as an example of how I price.

The point is to make sure your listings are positioned aggressively, in the MLS, so that they get shown. If you make a mistake on pricing it's better to be too low than too high. A listing priced too low will usually adjust itself by multiple offers and negotiations. If it's too high, it will just sit. And the problem with that is that when you do finally get a price reduction the market value may have decreased even more. Then you end up chasing the market downward but never quite catching up. Sellers need to know this.

As REALTORS® it is our job and obligation to be brutally honest when it comes to pricing. The quickest way to fail, as a listing Broker, is too take listings that you cannot sell. It's important for Sellers to know that REALTORS® and Sellers do not set market value, the market does. And the market is what it is. We can't just miraculously sell a house for 10% more than market value because we are expert marketers or because that's how much the Seller feels his house it worth. It ain't going to happen. To take a listing that is grossly over priced is nothing more than a waste of time, money and effort. So don't do it. Give the Seller the facts. If they are not in agreement or can't sell because of too much of a mortgage or whatever, then it's best to walk away. Here are some good phrases you can use to get your point across. Some are mine and some I've taken from others.

  • "I would rather turn you down now than let you down later."
  • "The market is what it is."
  • "It's not your house, it's the market, and the market says this is the value."
  • "I'm not willing to finance your fantasy." (Laurie Manny)
  • "I'm sorry, I can not sell your house at that price. I would be lying to you if I said I could."
  • And my favorite.....NEXT!

That's it, Broker Bryant's crash course on pricing. This is very basic and I'm sure you have thoughts you can add. What are they?

**Picture courtesy of Nick "Duh" Appraiser. Sorry, I had to use it!!!

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***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

The BIO for Bryant Tutas

 

 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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Rainer
51,935
Christina Ethridge
The North Idaho Dream Team powered by SKE Realty Group - Coeur d'Alene, ID
This is exactly how I price as well - except that in our market, prices are either holding steady or rising.  But, we have a big inventory right now and many options, and overpricing will not sell the property (it's not that kind of rising price market).
Apr 27, 2007 07:51 AM #58
Rainer
133,274
Boomer Jack Boardman & Carl McIntyre, the Codgers
Noted Curmudgeons - Saint Paul, MN

UCBB: The Codger™ term is “Blatant Self-Promotion” or “Blatant Marketing.” I don’t think you need any advice from us in that department ;-). Hmmm:Yuk

 

Nope—let me say this about that: “YUK!”

 

 

 

 

Jay

Apr 27, 2007 09:12 AM #59
Rainmaker
1,142,060
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Oh man Jay!!!!! You be looking good over there.:)

Hey everyone, I apologize for being such a bad host today on this post. I've been dealing with last minute closing issues and actually did something I don't do very often...I had to show properties!!!! Now you know from reading my blog that is just not something I like to do BUT in this case it's one of my long time customers and I have to do it. I have 5 investor buyers that won't work with anyone else. Between that and being on the phone all day dealing with issues I just now got a chance to make it back. 

As always I really appreciate you taking the time to add to the conversation. If you have listings that aren't selling now is a good time to update your CMAs and see if pricing adjustments need to be made. I usually do that every 30 days. Sometimes it may not even be pricing but something missing from the MLS or maybe even a slight error when the data was entered. A good practice after you enter a listing is to sit down and do several different MLS searches that a REALTOR(R) might use to make sure your property is showing up. Not only showing up but showing in a good position. I've done this only to find out I had mixed up a number in the zip code and it caused my listing to not show up. It's important to catch these things quickly so we don't waste any marketing time. Check and double check all MLS info.

Here's a good one:

"If you find a REALTOR(R) to list at that price. make sure they have a purdy sign because you will be looking at it for a long time"

Apr 27, 2007 09:37 AM #60
Rainmaker
593,807
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

BB,

Love your post...love your post love your post,love your post!

Ok I already spent my 25 long ago today so I am just wasting time making my rounds!

Apr 27, 2007 11:07 AM #61
Rainer
58,187
Virginia Halter
RE/MAX Signature Properties - Harrisburg, NC
ABR, CDPE, CRS, GREEN, SFR, SRES
BB - I am late getting in on this one.  Great post.  I have talked about this a few times over the last couple of weeks.  We only disappoint our sellers and mislead buyers by overpricing listings.  I am fortunate that the market in my area is doing pretty well but we can't keep inflating with no good cause. 
Apr 27, 2007 11:41 AM #62
Rainer
38,936
Valerie Baldwin
John L. Scott Sandy - Gresham, OR
Harvey, Gresham Oregon Real Estate
BB-great crash course on listing to sell.  I needed to hear this this week.  Thanks!!!!
Apr 27, 2007 12:07 PM #63
Rainmaker
1,142,060
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Rob, I heard somewhere.."A bad appraisal happens at time of listing" Very true. In this market the appraiser is not going to just "make it work". If he does the lenders will cut him off real quick. We had enough of that in '04 and '05.

Valerie, I hoped it help. That's the reason I write. It also helps me to do the things I'm supposed to do. If I write it, I must practice it.

Virginia, I'm with you on that. Nothing good will come from an over priced listing. And my market is full of them!

Neal, Do you love this post?:)

Apr 27, 2007 12:35 PM #65
Rainmaker
593,807
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate
Yes I love this post!
Apr 27, 2007 01:34 PM #66
Rainmaker
72,179
Jeff Link
Asheville, NC
"Your Asheville Real Estate Link"
Looking a little pale. You might want to wash the sun block of your face
Apr 27, 2007 02:01 PM #67
Rainmaker
217,715
Lucky Lang
Premiere Plus Realty Marco Island - Marco Island, FL
Marco Island & Naples Florida Real Estate

Bryant,

I just had to let one go that just didn't get it.  Someone else will probably list it, wear them down, and it will sell after they finally get it down months later to where I told them it will likely sell.  Oh well!

Lucky :)

Apr 27, 2007 03:51 PM #68
Rainer
51,026
Brett Mumaw
RE/MAX First - New Albany, IN
Your Indiana Move

Hey Bryant!  Thanks for the post.  I'm still working on "letting go of the end results" and this helps make a strong case for that.

I know I'm guilty of taking some listings because I was new and wanted to have some listings, but all it did was waste my time as well as the time of the clients.  No sense to it!  This post should help people realize it just isn't worth it.

Apr 29, 2007 08:42 AM #69
Rainer
34,079
Anna Lukyanova
Century 21 Sundance Realty - Daytona Beach, FL

Love your post, Bryant!

I agree with the comments. We have to give sellers the reality check and  first do it diplomatically and if that doesn't work the "gloves" come out quickly.

Apr 30, 2007 04:23 AM #70
Anonymous
Zane Alqublan
Great post, I have learnd a great deal from an over priced listing that qualified as short sale later, "should have seen that coming" . waste of time and energy. thanks for reminding us Bryant.
Apr 30, 2007 12:05 PM #71
Rainmaker
240,332
Patti Ann Kasper
EXIT REALTY NEXUS - Blaine, MN
Blaine & North Metro Minneapolis St Paul Real Esta
How do you manage to keep your face so gothicly white while getting such a great tan!  LOL  Patti Ann
May 02, 2007 09:27 AM #72
Ambassador
920,196
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate
Oh my gosh, this is soooooooooooooo true, we have been in a buyers market in Ann Arbor for 5 years. The rest of the county is just catching up. I tell my sellers the same things, price it in the top 10 that a buyer will look at. Forget the sold data. It is changing ALl the time. This was encouraging to me.
May 03, 2007 11:38 AM #73
Rainmaker
1,142,060
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Hey guys, I guess I have neglected this post. Sorry. As always your comments are greatly appreciated. AR is so big now it's just so hard to keep up.

Missy, being in the top 10 is definitely the place for your listing to be. At least it gets a good chance of being shown. You are doing it right.

Patti Ann, I am looking good aren't I?

Zane, It's a hard lesson to learn but it will make you a better lister in the long run.

Anna, Good to see you. It can definitely be a battle to get things priced right. But it's worth the fight. That is if you like getting paid:)

Brett, Good to see you. Where have you been? Busy I hope. Did you ever implement that FSBO letter?

Lucky, Maybe they will call you back next time around. I have that happen a lot. And it's sweet every time:)

Jeff, It was all the margaritas.

Neal, You sure?:) 

 

May 03, 2007 12:08 PM #74
Ambassador
557,018
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

It's hard to keep up when you have to prepare a meatloaf like this one :)

 

 

 

 

 

 

 

 

 

See. I told you I would find a way to work that masterpiece into a comment. LOL.

TLW...ROAR!

May 03, 2007 12:48 PM #75
Rainer
26,535
Edith Wharton
Cottage and Loft Realty - Midlothian, VA
Realtor - Chesterfield VA
Hey, BB I'd like my face on that body ! LOL
Jun 16, 2007 03:38 PM #76
Ambassador
557,018
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

testing for meatloaf :)

Feb 24, 2009 08:59 AM #77
Ambassador
2,135,080
Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate

I would rather have a BBQ Bacon Burger, but thanks.

Todd Clark, Helping Families Home - www.IFoundYourNewHome.com

Feb 24, 2009 09:02 AM #78
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