The 'Magic Formula' for Finding the JUST RIGHT PRICE...

By
Real Estate Agent with The Elizabeth Nieves Realty Group

 

Today, I had to tell a seller that I did not wish to list his home. More accurately, I CHOSE to tell a seller that I did not wish to list his home...but it was NOT an easy decision.

 

Since beginning my real estate career in 2003, I have sold more than my fair share of 'challenging' listings. In fact, my 'trophy case' is quite full of successful sales that I call my 'repeat offender' and 'fat-chance' listings.

 

'Repeat offenders' are those properties that have been listed by at least one other agent previously, without success.

 

'Fat-chance' listings are properties that are either so unique that the buyer pool is reduced to one in 47,243 buyers -OR- so ordinary that they do not stand out from the plethora of available, cookie-cutter homes.

 

Early in my career, I realized that there was a magnetic force field surrounding me that attracted these types of listings. Being the hungry, new agent in the office...I viewed EVERY listing as an opportunity to gain valuable market exposure and establish myself as the best REALTOR® in my area. With each closed sale, I acquired more self-confidence and more respect from others.

 

Even more importantly, I learned that there IS a buyer for EVERY home...

IF THE HOME IS PRICED RIGHT!

In other words, there is a 'magic formula' that looks something like this:

SIZE + CONDITION x LOCATION - WEIRD -or- PLAIN JANE FACTOR = JUST RIGHT PRICE

 


As a professional, experienced
REALTOR®...I know and understand the current market conditions. By combining my knowledge with the 'magic formula', I am able to determine the 'right price'...the highest price that the market will bear. YES...you heard me correctly...the HIGHEST PRICE the market will bear.

 


Today, when I recommended that we list his home for the 'right price'...the seller suggested that we 'try' a much higher price...even though he desperately needs to sell his home quickly. After explaining (again) how I had arrived at the 'right price', he insisted that he wanted to 'try' a higher price. Without hesitation, I thanked him for the opportunity to meet with him and sincerely wished him the best of luck with his sale.

  

 

You see...IF I had agreed to list his home for the 'wrong price', in a market with eleven months of available inventory...I would have done both the seller and myself an injustice. I may have even placed him at risk of losing his home to foreclosure. As difficult as it was to tell him that I did not wish to list his home today, it was far easier than knowing that I was setting him up for failure in the future. 

 

 

Thinking about selling your home?

 

Want to know the 'RIGHT PRICE'?

 

Call or email me today for a FREE Comparative Market Analysis.

(919)749-3749

Elizabeth@ElizabethNieves.com

 

 

***Photo courtesy of FreeDigitalPhotos.net***

 

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Written and Posted by:

Elizabeth Nieves - Broker, REALTOR®

The Elizabeth Nieves Realty Group @ Keller Williams (A Bilingual Real Estate Team serving Raleigh, Durham, Chapel Hill NC and surrounding areas.)

Search Raleigh, Durham, Chapel Hill and ALL Triangle Homes for Sale


 


 

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Rainer
59,603
Krista Fuchs
Prudential Fox & Roach - Exton, PA
Chester County Realtor - (484) 459-8025 - Home Buying and Selling

Totally agree with you...and it's hard to do.  I always try to tell people that I'm telling them what it will take to get their home sold, not what I think it's worth.  Those are two different things.  I really try to take the emotions out of it which isn't easy.   I also try to put them in the shoes of the buyers and show them the competing homes that are currently active and compare. 

Not an easy thing to do, to walk away, especially when you enjoy helping people because you are not only walking away for them but for yourself as well.

Great post!

Jan 07, 2009 05:17 AM #49
Rainmaker
411,383
Steven Beam
RE/MAX Alliance - Parker Colorado Real Estate. - Parker, CO
Parker Colorado Real Estate

Good for you! I too refuse bad listings. Probably why I'm sitting on so few at the moment but it is a total waste of time and my MONEY.

Jan 07, 2009 05:31 AM #50
Rainmaker
516,438
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX
Broker,CLHMS,GRI

'Repeat offenders' are those properties that have been listed by at least one other agent previously, without success.

My favorite category because by the time I get a chance to work for these people they are more willing to be "realistic"!

Jan 07, 2009 07:25 AM #51
Rainmaker
68,990
Valerie Springer
Benchmark Mortgage nmls 2143 - Birmingham, AL
Home Loan Officer AL, FHA, VA, Conventional and Re

This was great Elizabeth and you even provided a formula!  Your prospective client may not have been happy at the time but down the road he will certainly have a great respect for a valuable lesson.  I think you are the bomb!

Jan 07, 2009 07:51 AM #52
Rainer
55,551
Kelsey Barklow
Hurd Realty - Johnson City, TN
423/948-9154

Thanks for the reminder about subtracting the weird or plain-jane factor. I sometimes forget to factor these things into my CMA.

Jan 07, 2009 10:12 AM #53
Rainmaker
1,317,651
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

This advice is sooo important. A friend of mine is learning this the hard way!  Her sister is a Realtor and I am sure she didn't listen to her sister's advice.  Now, they keep lowering the price -- it has been over 6 months and things are very slow in the winter!  It is important to have the right price from the very beginning.

Jan 07, 2009 10:39 AM #54
Rainer
234,503
Diane Rice
Rice Prprty Mgmnt & Rlty, LLC, South Holland, IL - Lansing, IL
SFR, SRES, CNC

ELIZABETH!  YOU are so on!  This post was very well written, and so apropos for TODAY - NOBODY could have said it better than you!  A STAR very well earned and deserved!  Did you bake those yummy looking cookies????

You "TRUTH-MONGER" YOU!  Gby!

Jan 07, 2009 11:32 AM #55
Rainer
325,617
Judy Chapman
Referral Network of Illinois LLC - Chicago, IL

Thanks for your great formula!

Jan 07, 2009 12:38 PM #56
Rainer
41,106
Timothy Butterworth
Taking a break - Portland, OR

I just love how you put things Elizabeth, It just makes sense. I will send you snow if you send cookies. :)

Truely a great post and even a great way of putting it out there.

My weakness :)

Best to you and yours always.

Jan 07, 2009 01:03 PM #57
Rainmaker
129,085
Jason & Amber Gardner
Hasson Company, Realtors - Sherwood, OR
We're Committed to Your Success!

I hope everyone reads this... Including Realtors.  We still see quite a few Realtors in our area over pricing homes here... Just to get the listing.  They sit, expire and give other sellers false hope - not to mention scare off buyers.  While we make a positive influence in real estate, it's quite frustrating to have to answer to their selfish promotion.  On top of that, the market isn't driven by buyers here alone, it's really being taken over by appraisers.  No point in pricing the home wrong and spending all that money if it's not going to appraise out anyway.

Jan 08, 2009 01:21 PM #58
Ambassador
3,558,624
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Hi Sis!  First of all, congratulations on that little gold star!  Well written and REALLY needs to be out there, front and center!  Sellers can be too stubborn for their own good and if you don't feel that it's a good fit, then don't slip into those ill-fitting shoes!  You are just costing you and your Sellers money, time and frustration! 

Charlotte NC Real Estate

Jan 09, 2009 06:08 AM #59
Rainmaker
238,510
Angelia Garcia
Pure Realtors - Dallas, TX

That's what needs to be done so we are not throwing away marketing money.  I have a feeling he may call you again.  Let us know if he does.

Jan 09, 2009 08:27 AM #60
Rainmaker
205,313
Kent Anderson
Coldwell Banker Realty-Schweitzer Mountain, Sandpoint, Idaho - Sandpoint, ID
from Schweitzer to the Lake

As realtors, we now have far more of a weight on our shoulders than we had a few years ago, given the economic strife we are dealing with.  It is now our obligation to explain how important it is to list correctly in this market, given the consequences of bankruptcy or foreclosure.  This was always a "background" issue but now it has come to the forefront.

Jan 09, 2009 11:06 AM #61
Rainmaker
213,037
Sandy McAlpine
RE/MAX EXECUTIVE - Cornelius, NC
Search Lake Norman Homes For Sale - Lake Norman NC

I can't repeat myself enough, the price, the price, the price. That's all that matters. You are so right. too many sellers want a price they "need" out of the home and not what it's worth.

Jan 13, 2009 08:06 AM #62
Rainmaker
545,444
Jeff&Grace Safrin
F.C.Tucker 1st Team Real Estate - Valparaiso, IN
SpousesSellingHousesTM

LOL - Elizabeth - I just looked at our stats for 2008 and we turned down as many listings as we took - 1st time ever for us - People cannot expect to pay for their next dream home by inflating the price of their current one.

Or

if you take one or more home equity loans out - its just like a cash advance - you will not make up this money in a year or think you can just raise the price to cover what equity you've depleted.

We would prefer to say no but we will come back and be the 2nd or 3rd agent after your home doesn't sell due to price or if you'd like to price it right to sell now you will save 1 year of mortgage payments, taxes and utilites :)

great post

GBU sis

Sincerely,

Grace

Jan 14, 2009 02:43 AM #63
Rainmaker
346,423
Dawn Maloney
RE/MAX Trinity Northeast Ohio Real Estate Specialist - Hudson, OH
330-990-4236 Hudson & Northeastern Ohio

Wow - this formula is too cool - I have to apply it to my current inventory to see what I get.

Thank you!!

Jan 14, 2009 01:54 PM #64
Ambassador
886,213
Janna Scharf
Keller Williams Realty Coeur d'Alene - Coeur d'Alene, ID
Coeur d'Alene Idaho Real Estate Expert

Hi Elizabeth,

I loved your formula, thanks for sharing.  I'm sitting here with my friends Marty and Steve, showing them how AR works.  You are the best example in AR, and in life! 

xoxoxoxJannA

 

 

Jan 16, 2009 09:02 AM #65
Rainer
105,729
Teresa Harris
Lake Real Estate, LLC - Denver, NC
Denver . Lake Norman . Charlotte

I understand exactly what you are saying. It really blows my mind that some people still don't get it.... Thanks for sharing!

Jan 16, 2009 01:23 PM #66
Rainmaker
417,264
Debbie Malone
Londeree's Real Estate & Property Management - Lynchburg, VA
From Lynchburg To The Lake (434) 546-0369

Elizabeth, I met with the owner of a gorgeous townhome and had to tell her the bad news,;she overpaid for her unit and I couldn't list it for the price she was asking. I would love to have the listing, but the goal is to SELL the property not let it languish on the market because it's overpriced. It's better to walk away.

Jan 22, 2009 01:08 PM #67
Rainmaker
804,267
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Elizabeth, not only a good story, but I like the way you turned it around at the end and said, "Want to know the right price" to sell your home.  If you want your home to be sold, it is truly about setting the right price for the market.  Good for you for not taking a listing that wouldn't sell.  I have a feeling this seller will come back to you in time.

Feb 21, 2009 05:42 PM #68
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Elizabeth Nieves

Bilingual Raleigh - Durham North Carolina Real Estate Team
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