AgentMarketing

Pricing mistake No. 3: Emphasizing unsold properties

Four mistakes agents make in pricing a home and the one big mistake they make after
  • Words matter -- never call an unsold property an “active.”
  • When you review your CMA, start with the solds, not the unsolds.
  • Anchor the seller: if you want to sell, price to the solds.

Why do we even include unsold properties on a CMA?

After all, the goal in any pricing analysis is pretty simple: show the seller why he or she should price his or her home according to what has actually sold. Pull up properties that have sold, explain why they’re comparable enough to be reliable, and price accordingly.

But sellers never want to hear about the sold properties, do they? They want to price according to all the homes that are on the market. After all, those prices are a lot better.

Now, we know that most of those properties on the market are in “dreamland,” and they’re never going to sell anywhere near that price. So why do we even include them in the CMA?

Even worse, why does almost every CMA program I’ve ever seen put them first? That’s virtually malpractice!

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As we’ve discussed before, whatever number goes on the table first becomes an “anchor” for later discussions.

If you discuss the listed properties first, you’re framing the rest of the discussion based on that price point and setting yourself up for objections when you eventually get to the actual sold properties that are much more reliable indicators of market conditions.

OK, I understand that we need to include listed properties in the CMA. After all, they’re going to provide the competition for your listing.

But we don’t need to put them first.

And we definitely don’t need to call them “actives.” That’s another bit of malpractice.

What is so “active” about an unsold property? It’s just sitting there on the market like a big lump.

Seriously. Words matter. “Active” is a good thing: it means vigorous, energic, sprightly and mobile. Calling an unsold home an “active” implies that something is actually going on with that listing. That it has a pulse, that it’s breathing, that it’s doing a little jig or something.

But it’s not. It’s not active at all. It’s just laying there.

And yet we use a word to describe these listings that elevates them in the seller’s mind and makes them seem attractive and desirable.

We have to stop that. Unsold listings are misfit toys, the wallflowers at the dance, the “Best of Starland Vocal Band” 8-tracks at the bottom of the discount bin. (OK, that last one might be dating me a bit, but you probably get the idea.)

Call the listed properties what they are: the unsolds.

Unloved. Unwanted. Undesirable. Unsuccessful. Untouched. Unpopular. Unclean. The undead of the real estate market, still shambling around but not going anywhere.

That’s the imagery you want to convey: “Here are the solds, and here are the unsolds.”

Again, words matter. Sellers like the idea of being “active.” They don’t like the idea of being “unsold.” And that’s what you want: them recoiling at the concept of pricing to the properties that haven’t sold.

So stop putting them first, and stop calling them “actives.” It’s unhelpful and unnecessary.

Read “Pricing mistake No. 1: Asking sellers what the home should go for,” “Pricing mistake No. 2: Telling rather than showing,” “Pricing mistake No. 4: Being ashamed of taking an overpriced listing” and “Pricing mistake No. 5: The big price-drop fumble.”

Joseph Rand is one of the managing partners of Better Homes and Gardens Real Estate – Rand Realty in New York and New Jersey and blogs about his local markets at the Rand Country Blog and about the industry atClientOrientedRealEstate.com.

Email Joseph Rand.