{"id":4644,"date":"2023-08-18T14:45:55","date_gmt":"2023-08-18T14:45:55","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2023\/08\/18\/home-pricing-rules-dont-go-if-you-dont-know\/"},"modified":"2025-03-13T02:52:42","modified_gmt":"2025-03-13T02:52:42","slug":"home-pricing-rules-dont-go-if-you-dont-know","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2023\/08\/18\/home-pricing-rules-dont-go-if-you-dont-know\/","title":{"rendered":"Home pricing rules: Don\u2019t go if you don\u2019t know"},"content":{"rendered":"\n

A great Listing pre-qualification script pulls out critical facts so you can be best prepared to not just take the listing, but to price it right in the first place! Not prequalifying is unprofessional and can waste your time and the sellers. Always prequalify, 100% of the time! Price it to sell, not to sit.  <\/p>\n\n\n\n

The best price reduction conversation is the one you never have to have. All pricing scripts are best used at the listing table!  <\/p>\n\n\n\n

Don\u2019t lose the listing of a motivated, have-to-sell seller <\/em><\/strong>over price. If they have sell, you have to take the listing! Someone is going to make a commission. Shouldn\u2019t it be you?  <\/p>\n\n\n\n

Proper previous planning prevents pitifully poor pricing!  <\/h2>\n\n\n\n

Don\u2019t go to your next listing appointment unless you know the following items:  <\/p>\n\n\n\n

What the seller wants, needs or thinks it’s worth<\/h3>\n\n\n\n

Pricing the home correctly in the first place prevents future price reduction drama. It’s not unusual for a homeowner to believe that their home should fetch a price higher than the comps. You should always find out how they arrived at ‘their’ price. Learn that information before you arrive at the appointment so you can better strategize, explain the pricing strategy and consider how to ultimately price the home.  <\/p>\n\n\n\n

Try saying the following when the seller requests a list price that is too high: \u201cThat\u2019s interesting, ‘seller.’  How did you arrive at that price?” Listen to their answer, carefully!<\/p>\n\n\n\n

Secret #1<\/strong><\/p>\n\n\n\n

Sellers overprice out of either ignorance or arrogance. Even in a hot seller’s market,<\/a> there is aspirational pricing. You can price too high. Ignorance is when they just don\u2019t know how to price a home. Square feet matters, bedrooms, baths, views and condition are all taken into account. Arrogance is when they won\u2019t listen to comps and have reasons other than real value to try to justify their price. <\/p>\n\n\n\n

Secret #2<\/strong><\/p>\n\n\n\n

Sometimes, especially in a low-inventory market,<\/a> your potential seller client may know about comparable sales you didn’t capture. Private sales, for sale by owner and other sales not found in your MLS <\/a>could be really good comparable homes, so ask good questions and don’t just assume your seller is overpriced.  <\/p>\n\n\n\n

The average days on the market <\/h3>\n\n\n\n

You should know this stat for properties like your subject property. This information helps set both your expectations and the homeowner’s expectations. Not just for your town or even zip code, but for their neighborhood, school district and MLS code. Drill down as best you can to understand the days on the market <\/a>for homes as similar to theirs as possible. Sometimes even the style of the home can make a difference.  <\/p>\n\n\n\n

The list to sell price ratio<\/h3>\n\n\n\n

This data helps you combat the \u2018price it high, let them negotiate\u2019 objection. It can also help you know if you can price it right on the mark and expect to get slightly more. Are homes selling on average for 105% of the list price? Or, are sellers in the subject neighborhood typically settling at about 95% of the list price?  <\/p>\n\n\n\n

Know the number of homes competing with your subject property<\/h3>\n\n\n\n

What are you up against? How would it compare in the eyes of the buyer? If you’re showing your new listing versus its competition, do you look priced right<\/a>, overpriced or priced so well you’d be dying to write an offer and snap it up?  <\/p>\n\n\n\n

Secret: <\/strong>If you’re the only home on the market in the entire zip code or MLS code,  you can price it higher than you could if there were seven other competing homes, all within the same neighborhood. Especially if the competing homes are basically the same size and age. In that case, you need to be staged better and priced better than your competition or you’ll be the  one who’s stuck doing price reduction calls in about 60 days.  <\/p>\n\n\n\n

Secret: <\/strong>The next time you have to do continuing education, take an Appraisal class. This will help you become more confident in your pricing strategy. It will show you multiple ways of arriving at the correct price. Don’t just use ‘cost per square foot’ to arrive at the right price!  <\/p>\n\n\n\n

New construction in the area that competes with your potential listing <\/h3>\n\n\n\n

Remember when builders provide in-house financing, they often can sell a more expensive home for the same payment as your resale. If there are new homes going up, be certain to tour them and understand the builder’s perks and financing before you go to your listing appointment.  <\/p>\n\n\n\n

Secret: <\/strong>A resale home for $350,000 may be competing with new construction as high as $500,000 if the builder has buy-downs and in-house financing with incentives that reduce the mortgage interest rate.<\/a> Know what\u2019s going on with the new construction! Have the new build salespeople explain their different mortgage plans to you. Ask lots of questions like, ‘what happens when they have build clients who need to sell their old  house?’ <\/p>\n\n\n\n

What is the seller’s time frame<\/h3>\n\n\n\n

Ideally, when does the home need to sell and close by?  <\/p>\n\n\n\n

Secret: <\/strong>If they don\u2019t actually have a time frame, you may have a problem! The less motivated they are, the higher they may wish to price the home. That is a recipe for a tough relationship.  <\/p>\n\n\n\n

What is motivating the sale? <\/h3>\n\n\n\n

When you know why they want to or have to move, you can use this to stay on task during the appointment, referring to their needs and making it more about them than about you. This can also greatly affect your pricing strategy. If they are closing on a new home in 60 days, your strategy will be different than if they want to sell first, rent for a while and then decide what to do later. If you don’t find out, you’ll be left guessing, and guessing is not a good strategy. <\/p>\n\n\n\n

Secret: <\/strong>You can actually win a competitive listing situation by simply asking and then focusing on exactly what the seller really needs. Be the one who is their problem solver, not the agent who assumes they know everything. Sellers appreciate the attention to detail and focus on their needs.  <\/p>\n\n\n\n

Are they listing and buying or just listing? <\/h3>\n\n\n\n

Is there a referral needed for where they\u2019re moving to? Are they already in contract on something? Is there more than one transaction for you to help them with?  <\/p>\n\n\n\n

What happens if it doesn\u2019t sell?<\/a><\/h3>\n\n\n\n

Or, if they don\u2019t get their ideal price? Is keeping the house an option? If they’re thinking about  perhaps turning it into a rental property, you should do your research about going rates for a home like this one. Can they break even or make money on the potential lease payment, or would they be losing every month? You can see how it would affect your strategy and pricing. <\/p>\n\n\n\n

How did they happen to call you? <\/h3>\n\n\n\n

Track your sources of business. Tracking where your listing appointments are come from will tell you what’s working. Do more of what’s working and fewer things that are speculative and costly.  <\/p>\n\n\n\n

What’s the bottom Line? <\/h3>\n\n\n\n

Don’t go to any listing appointment without having the answers to the ten points we discussed here. Knowledge equals confidence. Ignorance equals fear. You’ll present more confidently and walk away with not only the listing but also the seller’s trust. Start out the relationship right if you expect to have a great relationship, including repeat and referral business!  <\/p>\n\n\n\n

Tim and Julie Harris host a <\/em>podcast<\/em><\/a> for real estate professionals. Tim and Julie have been real estate coaches for more than two decades, coaching the top agents in the country through different types of markets.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Don’t go to any listing appointment without the\u00a0answers to the 10 points discussed here. These answers will help build your pricing strategy.<\/p>\n","protected":false},"author":39478,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[2825],"class_list":["post-4644","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"\nHome pricing rules: Don\u2019t go if you don\u2019t know - RealTrends - Blog<\/title>\n<meta name=\"description\" content=\"Don't go to any listing appointment without the\u00a0answers to the 10 points discussed here. 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