Pricing 101

Pricing can be an issue in a demanding market. These take-away tips will make it easier for you to work with sellers on setting a realistic price tag.

Setting the right price is the key to turning a listing into a timely sale, especially in today's market.

Here's our list of the best pricing tips:

  • Do your Homework before the Listing Appointment.

Make a competitive market analysis to present to sellers. This compilation of market data shows what homes similar to the prospective listing have sold for and how long those sales took. It's absolutely vital for educating sellers about pricing and days on market.

  • Check out Home-valuation Sites.

Your sellers have probably visited sites like Zillow.com to see what their home is worth. You need to know what those Web sites say about your listing before you arrive at the appointment. If the value stated on the Web site is incorrect, you need to be prepared to explain to sellers how the Website works and where the numbers are coming from.

  • Consider the Sellers’ Urgency.

If sellers need to move in 30 days because of a job transfer, getting the highest price may not be a top priority. A lower price may help move the house more quickly. Find out how important it is for the home to sell quickly.

  • Weigh the Home’s Condition.

Explain that a stale, worn look will negatively affect pricing and the ability to sell. Somehow you have to dig up the nerve to tell them that buyers will expect a coat of fresh paint and new carpeting. If they won’t update, you have to consider that in the pricing of the house.

  • Don't be Demeaning.

Point out pluses and minuses of the home’s location and condition compared to other homes that sold and didn’t sell recently. But do it in a polite, professional manner. Sellers are often sensitive to comments made about their home.

  • Show the Risks.

Show examples from the MLS of overpriced listings. Illustrate the number of times the price was reduced and how long it ended up taking to sell the house. Look for listings initially overpriced that eventually sold for less than their worth. Provide information on expired listings to remind sellers that if they’re not realistic about pricing, they could end up on that list.

  • Don't be wishy washy.

When you get to the pricing discussion, it's a must to be professional and firm. You may use this dialogue as guide: “I know you told me you think your house is worth $500,000. With your permission, I’m going to show you some data to help us determine an accurate price for your home.” / “This house is two blocks over with your same floor plan, and it recently closed for $405,000. Do you see that house?”

  • Price-Reduction Plan.

Get sellers to agree to a price reduction plan upfront in case you agreed on an unrealistic price. For example, tell them that after a set period if you aren’t getting traffic and offers, it's time to revisit the pricing issue.

  • Walk away if Sellers are Unrealistic.

If sellers are uncompromising about going with a price you know is too high, walk away. You’d rather turn down the listing than disappoint them by not being able to sell the house for what you think is an unrealistic price.

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