What was your last listing appointment like? Did you successfully get the seller to agree to list their home at the appropriate price based on the market? Or did their emotion get in the way of your expertise?
Moving sellers’ and buyers’ pricing psychology and emotion onto a fact-based playing field are among the biggest challenges agents face. This is because sellers and buyers are typically out of sync with the realities of the market.
In a seller’s market, sellers tend to dwell on the future – higher prices – while buyers tend to value the past, when home prices were lower. This discrepancy creates a situation where sellers want to push prices up and buyers want to hold the line.
In a buyers’ market, buyers want to place themselves in the future – lower prices – while sellers want to dwell in the past, when prices were high. In this scenario, buyers want to push prices down and sellers want to hold the line.
The net result is a gap between a buyer and a seller’s perception of what a home is currently worth. The job of a listing agent is to close the gap – it’s one of the few absolutely essential competitive skills.
Agents who are better at it consistently win more listings and sales. The good news is that pricing is also a process. Learning to do it well requires knowing pricing strategies based on the principles that drive markets. It also requires knowing pricing tactics – comparative market analysis (CMA) building and presenting, and the scripts that go with it.
Ignite, a course from Keller Williams University identifies the six critical real estate pricing strategies you need to bear in mind as you approach pricing any property.
1. Know what sells: always evaluate for both competitive price and marketable condition.
2. Know what sellers can and can’t control: communicate what does not matter in pricing (what they paid; what they need; what they want; what their neighbor sold for; what another agent says it’s worth; cost to rebuild).
3. Understand the window of opportunity: be persuasive about the importance of pricing right the first time, and being in great condition, to capture peak interest in the first few weeks on the market.
4. Price to reflect market movement: price to reflect the direction the market is moving and the speed of change .
5. Price ahead of the market: price so your seller does not get caught chasing the market down, or does not miss their maximum opportunity in a rising market .
6. Don’t be afraid to be brutally honest: ask, “do you want me to tell you what you want to hear, or do you want to hear the truth (about price and condition)?”
With practice, you will absorb and internalize them. They will become part of you as a real estate agent and make you an outstanding advisor to both buyers and sellers.
Ignite develops the habits, and delivers the activities, models and systems, that create momentum for a productive real estate career. Each session will have you engaged in real estate activities – you’ll be getting leads, working your business in class and learning to service buyers and sellers, from setting the first appointment to closing the deal. Learn more at Keller Williams University (http://kwu.kw.com/kwu/ignite)
Source: KW Blog