How to Win the House Pricing "Tug of War"... The Battle is Raging and Agents are Not Winning
You may be surprised to learn that lately 60% of homes listed in the OMREB area did not sell.
That equates to more than 6,000 homes in 2012 left unsold.
Who is winning the pricing war?
Seller or agent?
With the numbers above I would say the seller. Why?
Does any seller believe any other home compares to theirs?
NO... of course not!
So why bother using comparables that just build up their defense mechanism?
Do you have a pricing presentation?
If so, does it involve taking the time to really engage the seller on the importance of pricing?
Are you "telling" or "showing and selling"?
Meaning do you use visuals, dialogs and statistics to back your pricing proposition.
My Mentor – Jackie Leavenworth said
We are not in the pricing business but in the property positioning business
Try using a property positioning presentation and stop using a Competitive Market Analysis.
In order to change the outcome you must change the way you present your data.
Don’t use "Actives" in your plan. The word Active gives the seller a false sense of reality. Putting a home on the market doesn’t necessarily guarantee activity or action.
In reality the Actives should be called the competition or the enemy in your pricing plan, shouldn’t it?
Try using something else other than "Expired".
Why not try using the term "Failed Homes"? Isn’t that what they are?
Who would want to be on a list called Failed Homes?
Instead of using "Sold" how about the wording "Successful Sellers". Give your clients a real sense of pride by changing the way you communicate with them.
One of my favorite Property Positioning visuals for your seller is the "Grocery Store Analogy".
Ask your seller... "when you're at the grocery store and are heading to the check out what are the two things you look for?"
Shortest line and buggies with the least number of items... Correct?
It is exactly the same for your sellers.
You need to advise them of the shortest line up and the line with the least amount of items for them to become a successful seller.
Help your client understand the other people in line are the competitors (or enemy) also waiting to check out. Then show them how the price they choose to list their home at will determine where they are in the grocery line.
Then move on to show how many sellers who were in line are now a failed home as well as the fine few who have checked out the last number of months as a successful happy seller.
It is crucial you remind them the positioning changes every day.
When someone reduces their price, they move up and cut in front of them in the line. When another lists at a lower price it pushes your client further back in line.
It is your job as an agent to advise your seller daily of where they are in line. Update them on who has joined the line and who has cut in front of them.
Ask them...
"Mr and Mrs Seller where do you want to be in line?"
"The decision is yours... do you want to sell or want to stay?"
Take the time to present positioning vs. pricing in your real estate business.
Collect a bundle of visuals and materials to build your case on the importance of pricing and start winning the battle with sellers. As a result you will sell more homes and help more sellers achieve their goals.
Strength and courage,
Wade
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