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Pricing a Property to the Market
Today I am directing my training to those of you in the brokerage real estate world versus the developer sales world. First of all, let me clarify that I am an eternal optimist and I think it is a GREAT time to buy real estate! Lowest prices, lowest interest rates, and great selection! Why do many of our listings still not sell? I am confident it is two things: 1)We are not properly managing the expectations of our buyers and sellers. 2)And in many cases our listings are not priced accurately to the market.
Next week I will address the managing expectation issue, and it is HUGE! I witness it firsthand as I am in the trenches with you listing and selling property. As I interact with other realtors many times I am appalled at how inept many are at managing expectations of buyers and sellers. And it truly is a disservice to the buyer and seller as these people really do want to buy and sell but the way information is presented to them, they are fearful of making a wrong decision and consequently do nothing. I will cover this next week. However, this week I am going to talk about pricing.
My son and partner, John Jr. and I were talking recently about the homes we marketed and sold for our sellers last year. A two million dollar home sold in 4 days before it got on MLS, while another sold in less than a week. At the time the sellers wondered if we were pricing the home too low. No, we did not price them too low. We priced them to the market and that’s why they sold. Both of those homes would sell for less money today if they were put on the market. In the two communities where these homes sold there are numerous homes still for sale that were on the market back then and they have since lowered their prices multiple times but they are guilty of “chasing the market down” versus pricing it to the market in the beginning.
Let’s focus on your existing listings. Click Here for a link to a Wall Street Journal article I would encourage you to send to each of your listings. It talks about the market may decrease another 7-10% before it bottoms out. A really negative article but that is what you need to help some of your sellers to accept reality. We all know real estate markets are all “local.” There is no such thing as a “national real estate market” just as there is no such thing as a “national weather forecast.” However, this information can be very helpful in assisting your sellers to price to the market.
Additionally, Click Here for a video overview specific to pricing a property to the market.
Let me know your thoughts on the article and what kind of feedback you receive. Next week I will talk about “managing expectations.” Until then, let me know if I can be of help in any way and if you would like me to come do some training for you. Have a great one!
Posted on 05/23 at 09:35 PM
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