Pricing Like a Pro is also another of my favorite inclusions into the pre-confirmation package. We have been making changes on this document throughout the last thirty years, and tweaking and refining it to fulfill or exceed expectations in nearly any circumstance or situation.
My coaching clients use this exclusively, as do the majority of the top-producing real estate agents in the United States. It has numerous pages, but you will find that a client will read it because pricing is one of the biggest concerns. After acquainting yourself with this honed strategy, you will most likely agree that once a potential seller reads this, a lot of the initial pricing objections have already been overcome.
Pricing Like a Pro
Walter Sanford’s Thoughts on the Possible Comment: “My price may be on the high side, but bring me an offer!”
Serious buyers look in the price range that has been predetermined by their down payment and monthly payment ability. Unless your property is priced correctly, the down payment and monthly payment requirements will not be competitive.
A buyer, who is genuinely looking, soon becomes very knowledgeable in his range. An unreasonable asking price only discourages him from looking and considering your property.
Buyers purchase by comparison, and a property priced above the competition does not “compare” favorably. Inviting a buyer to make an offer could indicate that a fair price has not been established.
If you plan to adjust your price at the time of a sale, it is better to adjust the price now and attract serious buyers. This often places you in the advantageous position of having more than one buyer interested in your property.
It is very difficult to obtain a reasonable offer on an overpriced property. The buyer feels he should be just as unreasonable in his offer as the seller in his asking price.
By contrast, offers are much easier to obtain on a reasonably-priced property. You can then choose which offer to accept with no obligation to one that does not meet your requirements.
It is a mistake to believe that you will get more for a property by asking more. You usually get less, because fewer buyers will consider it when it is placed on the market. The right buyers will not see it, and it usually stays on the market so long that it tends to become “shop worn.”
To obtain proper market exposure, it is an absolute necessity to be competitive in price, terms, and condition, with similar properties that are selling in the area.
If you are a committed seller, price your property at market, and attract serious buyers. You will stand a much better chance of getting full-market value, and your property will sell much faster.
Modern Pricing Technologies Used by Appraisers and Consultants to Price Properties in North America
1. An agent has no control over the market, only the marketing plan.
2. Never select an agent based on price.
3. Pricing in rising and falling markets:
a. Overpricing in a rising market may be okay;
b. Overpricing in a falling market is disastrous.
c. Market trend is as important as pricing. Make sure your agent understands market trends.
4. Four kinds of numbers are used to represent your property:
a. Cost: what was paid plus capital improvements
b. Price: what the seller wants
c. Value: what a buyer is willing to pay
d. Market Value: what a willing buyer and seller will agree upon
5. Regression and progression:
a. Regression – the phenomenon of an expensive house being decreased in value because of the lesser desirable homes around it.
b. Progression – the phenomenon of a home selling for more than its worth because of having more expensive property or a more desirable
6. Substitution: The value of an amenity is based upon what it will produce not what it will cost.
7. Reasons for overpricing:
a. Over-improvement: a seller cannot select an over-improvement, add to their lifestyle, enjoy it and expect the buyer to pay the original cost of it.
b. Need: the need for money does not increase the value!
c. Buying in a higher priced area does not increase the value of your property.
d. Original purchase price too high does not increase the value.
e. Lacking factual comps does not increase the value.
f. Providing bargaining room does not increase the value.
g. The high cost of a move does not increase value.
h. There is an impending corporate buy-out, but that also does not increase value.
8. The largest impression and most impact a property makes on the market upon buyers and upon agents is in the first few weeks of the listing. Therefore, it should show the best and be priced the best during those weeks.
9. Make sure your consultant understands the philosophy of buying up in a down market.
10. Benefits to Proper Pricing:
a. Faster sale, which will save carrying costs and surety of close, has value.
b. Fewer inconveniences
c. Exposure to more prospects, and therefore more offers
d. Increased cooperative salesperson response and promotion
e. Better response from advertising the features and benefits of the properties
f. Attracts higher offers, which….
g. Means more money to sellers
These pricing strategies were prepared for you because they sometimes are a roadblock between you and your goals. My job is to identify these potential pitfalls and help eliminate them.
Walter S. Sanford
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