Helping Your Sellers Choose the Right Price

01/31/17 • -1 min

We're heading toward a market shift, so pricing a home properly is going to be a more important skill now that it has been in the last 10 years. How do you help your sellers do this?

Thinking about a career in San Diego real estate sales?
Email me today for a private San Diego real estate career consultation.

I wanted to give you some advice on helping your sellers choose the right price for their homes.

As we go into this shifting market, pricing a home is going to be a more in-demand skill than it has been in the last 10 years. As we come into the fourth quarter of 2016, we’re starting to see that the homes that aren't priced exactly right are sitting on the market. In fact, a lot of them end up having multiple price reductions and selling for less than they probably should have right out of the gate.

When you're helping your seller choose the right price, here's the simple formula for me: I want to get real about the condition of the property I'm about to bring to market. Is it a two or is it a 10? From there, I want to get real about the condition of the other properties on the market. Are they nicer, or is your seller's property nicer?

Once I've identified that, then I'm going to look at the competition and the way they are priced. I intend to be the best, highest quality home on the market for the price. What I'm saying is that if you're the best value on the market, you'll always be the first to sell.

As somebody who has sold dozens of properties of my own and thousands for other people, I can tell you unequivocally that the market does not let properties sell too cheaply. Here's what I mean by that–if you think a property is worth somewhere between $450,000 and $500,000, I'm listing it at $450,000 every time. If I list at that price and it was supposed to be $500,000, I'm going to get multiple offers in a short time and it's going to sell for $500,000 or maybe even more.

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The free market will always help you find the right price.

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That's the beauty of the free market system; the market always helps you get the pricing right. It also punishes you when you get greedy on the front end.

If the property is worth $500,000 and you price it at $510,000, the property begins to stagnate on the market, you have a low number of showings, and buyers start to wonder what's wrong with the property. Other agents may not show it, and it eventually sells for far less than it should.

Do the right thing by helping your sellers pick the right price out of the gate and get the home sold quickly. If you have any more questions about pricing homes or I can help you in any way with your real estate career, give me a call or send me an email. I'd love to help you out!

We're heading toward a market shift, so pricing a home properly is going to be a more important skill now that it has been in the last 10 years. How do you help your sellers do this?

Thinking about a career in San Diego real estate sales?
Email me today for a private San Diego real estate career consultation.

“

The free market will always help you find the right price.

”

Previous Episode

How to Handle Multiple Offers as a Listing Agent

With inventory as low as it is, your sellers should be receiving multiple offers. You need to be prepared to help them pick the best offer for their unique situation.

Thinking about a career in San Diego real estate sales?
Email me today for a private San Diego real estate career consultation.

Inventory is at an all-time low, and if you have a property that is priced right, you should be concerned if you’re not getting multiple offers. As a listing agent, it is your job to help your sellers choose the best offer.

Is the best offer always the highest price? Or is a cash offer the best offer? Should you go with a buyer with conventional financing or a buyer with a VA loan?

The best offer can actually be any of the above. Ultimately, the best offer is the one that makes the most sense for your seller and is the most likely to close in the time frame your seller wants.

Let me give you an example. One of our agents recently sold a great house. An offer came in over asking price — in fact, it was so far over asking that we knew there would be an issue with the appraisal. The agent asked the buyer to add a clause that stated if the appraisal came in up to $25,000 under the offer price, the buyer would write a check for the difference.

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As a listing agent, it is your job to help your sellers choose the best offer in a multiple offer situation.

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The buyer agreed to the clause up front and we went to get the okay from the lender. We needed to verify that the buyer had the funds to cover the difference and that the loan program would allow them to do so. In this instance, the buyer didn’t have the funds, so we took an offer that was a little bit less money but more able to close.

As the listing agent, our job is to fully educate the seller and help them see the upcoming bumps in the road that they might otherwise miss.

If you have any questions about dealing with multiple offers or if there is anything else you want to know about, give me a call or send me an email. I would be happy to help you!

Next Episode

When Are Price Reductions Necessary?

Price reductions are never ideal. However, we have a good strategy to share for how to approach them.

Thinking about a career in San Diego real estate sales?
Email me today for a private San Diego real estate career consultation.

No seller likes to have to make price reductions, but sometimes they are necessary. How do you determine when your seller needs a price reduction?

Today, there are fewer than 5,000 homes on the market in San Diego and in any typical month we sell between 3,000 and 4,000 homes. If your home has been on the market for weeks or months without accepting an offer, it’s time for a price reduction. Homes priced correctly are selling very quickly in today’s market, within days and weeks.

The best time to set the stage for this is during the listing consultation with the seller. This way, they can clearly understand the dynamics of today’s market. If we are on the market for more than two weeks and have had fewer than 10 showings and no offers in that time frame, we need to start entertaining the idea of a price reduction.

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The best time to set the stage for this is during the listing consultation.

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The key to getting the highest price when reducing your price will be to cut fast and cut hard so you get the property under contract quickly.

The longer a home sits on the market, the lower the seller’s net is. Sometimes getting the highest possible price for a property requires being brutally honest. If a home has been on the market and is not receiving offers, we call our sellers and let them know the situation.

If the market has spoken and the price is too high, we have two options for a reduction. One is a big 10% price reduction to sell quickly or a 5% reduction to test the waters further.

At this point, it’s not even an opinion that the home is overpriced, it’s a fact. If you have any questions for us about price reductions or anything else, give us a call or send us an email. We look forward to hearing from you soon.