The sale of any home invariably comes down the root of all evil: money. While the right ZIP code and a litany of add-ons and green features can help sell a house, the price is the bottom line.
Considering how vital pricing is to the sale of a listing, I wonder: Do you use a pricing strategy? Or do you go with your gut?
I’d like to brag for a moment: I have an uncanny feel for market value. We can drive through this town and while you point at houses, I can call out the numbers. Nine times out of ten, I’m right on the money. I chalk it up to years of experience, building knowledge, and female intuition.
You believe that? C’mon now.
While it’s true that I have a knack for the numbers, it’s all about my research and preparation.
Pricing strategies begin long before any client shows up. Knowing your local market is the single most important tool in your possession.
Take a long to short view of your sales area. Start at the county level, and then divide the geography up into North, South, East, and West regions. Once you’ve done that, look at sales data by neighborhood.
Calculate the sales data for each price range of home in these areas. In the Santa Clara area, for example, 36 homes went pending this month in the $100,000 to $200,000 category. Average days on market: 46. Total homes on market: 150. And so on.
Keep these figures for reference. After a few months, it won’t take you long to do these calculations, and you’ll be surprised how confident you are in talking price with both clients and consumers.
Most real estate agents wing it when it comes to "The Talk." Just like sitting down with a pre-teen and talking STDs, Realtors start sweating and getting jittery when the topic of listing price comes up.
Plenty of formerly confident agents break down, pushing the listing paperwork across the table, "Just put whatever price you want there, and we’ll work on it later."
Ah-ha! Wrong answer. What you need is more preparation. You already know the key to the listing is the price, right? So answer that question first.
You should have a price range in mind beforehand. Price should not be a computer-generated average of anything. Know your own comps, people.
Also be aware of supply and demand, and consider the seller’s urgency.
The push back
In most cases the seller is going to blanch at the idea that their home is not worth the three trillion dollars that they have lovingly invested in it over the past 287 years. Pass them a tissue and repeat: A home is only worth what the market is willing to pay for it. Things that do not affect value include:
1. Original cost.
2. What it would cost to rebuild it today.
3. All the Home Depot receipts saved from the deck overhaul and pony wall addition.
4. Personal attachment.
5. The idea that it is the perfect home for anyone, anywhere, anytime.