Pricing Ahead of the Market

These are notes from the February 2009 Keller Williams Realty Family Reunion. The topic here was addressed by Martin Bouma.

1. Prepare for 2-3 hours prior to a listing appointment.
2. Confess that we don't know where the market is - at best we are guessing. It is what it is for a moment in time.
3. Carpet, paint and caulk around the tub. Condition matters. Condition will NEVER correct a bad price.
4. Correct price represents 80% of marketing.
5. Your value is the knowledge you bring to your seller.
6. Ask what the seller expects and how much he owes.
7. Listing presention is 80% market stats.
8. Track actives, pendings, solds and average price by price per SF - by school district.
9. Preview properties - at least on line - and use googlemap.
10. Print the history of what has sold - show price reductions.
11. Houses are selling - and some for close to full price within a few days IF they are priced right.
12. Broker Metrics - graphs.
13. Buyers are more interested in PRICE than in neighborhood right now.
14. Realtors don't control information - we bring our knowledge.
15. Actives plus pendings divided by pendings equals activity index - which says what the market is doing NOW.
16. Absorption rate is #actives divided by #sold in 12 months divided by 12. If only X are selling and competing against Y other properties, where do we price? If absorption rate is over seven months, you are in a buyer's market.
17. Care enough about the seller to be strong and get the right price. Use graphs.
18. Watch for newspaper articles that support your position.
19. Bring the seller back to motivation. Remember their stress level is high.
20. Sellers are going through five stages of grief (anger, denial, barter, depression, acceptance).
21. Spend time preparing to be confident. Practice scripts - learn new ones - rehearse - change.
22. Send out a thorough CMA in your prelisting package.
23. There is a shortage of houses pried where buyers will buy, not a shortage of buyers. If no offer in two weeks, it is priced too high. People fear loss. Buyers assume something is wrong if it hasn't sold quickly, even after the price has been reduced.
24. Understand supply and demand. Illustrate with a story.
25. Be careful that the sales price will appraise.
26. Don't chase the market - time is NOT on your side.
27. Put together a checklist for buyers about the negatives of purchasing an REO property.
28. Increase customer service - phone calls - keep up with change in activity, showings
29. If you do an open house, do it right.
30. Send sellers regular market updates - ask for questions - ask if there is anything they are not happy with.
31. Trulia.
32. Set up on auto search so they see price changes and new listings.
33. Use survey monkey.
34. #1 complaint is lack of communication.
35. homefeedback.com
36. 10-12 showings and no offer - at least 5% overpriced; more than that, at least 10% overpriced.
37. onlineauction.com/kw
38. Ask: if you were a buyer in this market, what would you pay?
39. Watch your mind space!