How do you avoid overpricing your next listing…
…in a changing marketplace?
We have a problem. We have a big problem.
Prices in our marketplace are going up 1%, even 2% a month!
Every seller we meet with, they’re telling us,
“We’re hearing all the stories. Homes are selling quickly. There’s low inventory, low-interest rates.
Homes are flying off the shelf.”
“Isn’t it true that inventory is really low? Isn’t it true by there’s still a lot of buyers?”
Yes, yes, yes.
And before you know it, you do a market analysis and you give them a price that overshot the market.
Imagine you recommend 400k and they ask you,
“What should we start out?
We want to start high so we can come down, right? You can always come down. You can’t come up. Isn’t that right, Nick?”
Here’s how you handle this by saying…
Yes, normally people price things higher expecting to come down. But, this isn’t a normal marketplace.
When prices are going up, the inverse is true.
You want to price things lower so you can go up.
You want to start pricing things lower, Mr. and Mrs. Seller expecting to go high, instead of pricing them high, expecting to go low.
There are many reasons why you should do that.
Number one, when you price high, expecting to come low, you’re giving up power. You’re giving up leverage.
Mr. and Mrs. Seller you would agree you want to negotiate from a position of strength, not weakness?
And Mr. and Mrs. Seller, you’ve been hearing about these bidding wars.
You’ve been hearing about multiple offer situations.
That is an auction-like effect.
That’s because it was an auction.
When was the last time you had an auction or when was the last time you went to an auction, right?
Are you familiar with how auctions work?
Do they price high? Do they start high and work their way down?
Or do they price low and work their way up?
If you want to have the most buyers, the most activity, you’re going to want to think about how you can price your home strategically…
It’s true that you may only want one buyer.
It’s true that you may only need one buyer and that’s all it takes.
What we know to be true is that it takes two to have multiple offers.
This is the advice that we need to be giving our sellers right now…
That you don’t add 5%, 10% onto your price because it can be detrimental.
This is a challenging marketplace.
I am seeing homes overpriced.
Happens every year, every fall, every winter.
We see massive appreciations over the summer and sellers become overconfident.
Avoid that frustrated seller that will get mad at you for not selling their home.
Here is a story on why you must include pending sales in your market analysis.
And I remember sitting doing a market analysis for a house in Wenatchee on Brandy lane. And I found all the comps. I did the research and I was sitting in her living room going over the market analysis.
She had these Bay windows overlooking the street and it was a beautiful day. As I went over the market analysis I said that I found all the very best comparable sales in the last six months. I made all the necessary adjustments to them to give you the most accurate report possible.
As I finished she looked at me and she goes, “That’s interesting.” As I recommended $255,000.
She goes, “That’s interesting, Nick.
That’s great but, how do you explain to me my neighbor’s house across the street that’s under contract at $269,000?
Exact same builder, exact same square footage, exact same beds, exact same baths?”
I didn’t get the listing!
I didn’t do the research on what was currently happening in the neighborhood.
That was the last time I would overlook pending sales.
As a principle location can override similarity.
If you have any questions on how to value properties and how to present to sellers…
…I’m here as a resource.
If you have any questions reach out to me, send me a private message.
Nick McLean | 509-255-8070 | firstname.lastname@example.org