Help Your Listing Clients Understand the Importance of Setting the Proper Listing Price the First Time
For most of my career I have been constantly reminded that “Price” will cure any real estate listing problem.
It is such an important skill to price your listings right the first time and avoid tarnishing your reputation by having home listings that do not sell.
For decades we have been taught to do a listing presentation and take the time to share with sellers why they should choose “you”…
Why they should choose your real estate company?
This week I want to share with you a strategy that will “move” the sellers to understanding the importance of pricing their home properly, what to say and what to present.
After we finish our listing presentation and we close with the dialog “If we can agree on a price Mr. and Mrs. Seller do you see any reason why you wouldn’t list with me and my company today?”
They say “No, that was exactly what we wanted to see with marketing our home.”
Now Use These Strategies in Your Listing Presentation
The Dilemma Technique – “Before we do, I have a dilemma I want to talk about 1st. May I do that”?
On the phone or in our last measure and inspect I asked lots of questions so I could go to the files and find comparable properties, although no other homes are the same as yours. A home will only sell for the price other homes similar are selling for.
You know I found some that were comparable so we don’t have to guess – “Hit One problem though”.
Remember I asked what you thought your house was worth and you said $500,000.00. That created a snag.
I went to files way back and checked many areas and couldn’t come anywhere close. (What did you come up with?)
First my dilemma, do I tell Mr. and Mrs. Seller what I know they want to hear and let them down later or do I tell them the truth and maybe chance losing the listing.
Leave it up to you?
Do you want me to lie or do you want me to level?
Type of Market – What kind of Market do you think we are in?
Buyer’s Market? (high supply, low demand)
Seller’s Market? (low supply, high demand)
Balanced Market? (equal supply and demand)
Take the time to listen and educate what market they are in and the difference between the 3 markets.
Ideal Buyer – Who do you feel is our ideal buyer and where do you think we will find them?
Take the time to identify their ideal buyer and determine your target marketing strategy to find them.
Buyer Value – How do buyers determine value Mr. and Mrs. Seller?
When you bought this home, how did you determine value?
Did you compare to others for sale at the time?
Buyers still determine the value by comparison shopping so when we choose the price we are choosing our competition.
Market Value Definition – Mr. and Mrs. Seller I want to share with you that Market Value is what a willing buyer at the time is willing to pay for your home and what you the willing seller at that time are willing to let your home sell for… this is truly “Market Value”.
Does this make sense?
Cost is the amount you paid.
Price is the amount you ask.
Value is the worth to someone else.
6 Role of an agent in Pricing – Mr. and Mrs. Seller there is no “exact price” for real estate.
What I think your home is “worth” does not matter.
The market will determine the value but together we will determine the price.
I will show you a range of prices being paid for homes similar to yours in the area.
Wholesale – Retail – Pricing – Choosing pricing we have 2 models to choose from.
Pricing model one is Wholesale pricing like Costco or Walmart, with their pricing one gets a bigger bang for their buck or the lowest price is the law and these are two incredibly successful pricing models… don’t you agree?
Model number two is Retail pricing like Sears or Nordstrom, with their pricing it is what the market will pay and if it does not sell then they put it on sale. Good model but in the end they end up lowering the price for it to sell and takes much more time.
What pricing model do you think we want for your home Mr. and Mrs. Seller?
8 Positioning vs. Pricing – Mr. and Mrs. Seller I am in the positioning business and not in the pricing business.
My job is to position your home properly. For example when you go to the supermarket and you have a full buggy of groceries and you want to check out and pay for the groceries, the first thing you do is look for the shortest line and the people with the fewest items.
All the people in line paying for their groceries are the people trying to sell their home and our competition to check out and pay.
Where do you want to be in the grocery checkout line?
The listing price determines where we are in line. Make sense?
Importance of pricing – The National Association Of Realtors reported, in order to achieve a sale in a reasonable time period that if a house listing price is market value, then it has a 95% chance of selling.
If the house were priced only 5% above market value your chances of selling are reduced to 50%.
If the home is priced only 10% above market value, then your chances are only 35% of selling and if the listing is priced 15% above market value your chances are only 25% of selling.
Can you see how choosing the right starting price is so important?
How to choose your agent – Mr. and Mrs. Seller an agent doesn’t control the market.
The market sometimes is not kind but it does not lie.
Never select your agent based on the higher listing price.
Select the agent that provides world class service and the most extensive marketing plan for you and your home.
The decision is yours.
Be sure to take the time to fully develop your pricing presentation.
Get the seller to understand the importance of pricing their home right the first time.
I hope this will help you get more listings priced right and increase your production in the future.
Strength and Courage,
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