A Wise Pricing Strategy. Your Choice.

With a lifetime of home value pricing conversations behind me, I can say homeowners are likely to expect one of two outcomes. One is to feel good about the price, and the other desires to have a strategy that gets them from here to there safely. The majority of people we talk with hope to be part of the conversation and are receptive to relevant facts. Most home sellers are sincere about their intentions, and they’re eager to choose a wise pricing strategy. These are the people who have real opportunities to make this seller’s market work for them. 

Gathering Facts

Home sellers who win know they are selling because they want the equity from their current home to do the next thing in their lives. Until a person is committed to the next thing, testing the market will be tempting. It’s a lot easier to trust facts when those facts appear to contribute to a plan to accomplish the objective. When the aim is not defined, testing is a way to stall and buy time. We set out to gather relevant facts and separate them from the irrelevant. The process looks like this: Four homes sold in the neighborhood in the last six months. Two are on the same street. They are all similar in age, size, amenities to the subject home. The prices range from $320,000 to $350,000. A few blocks over, the road leads to a new subdivision. One person sold a drastically different, yet relatively close-in-size home for $625,000. Even if the homeowner likes their home and location better, the six hundred thousand dollar home sale is irrelevant to the subject home’s value. The homeowner who wants to use the expensive house to calculate relative value will hamper the opportunity to negotiate price and terms.  

What Someone Thinks or Wants are Facts…but not relevant.

We all want something sometime. We all think some things are better than others. No one wants to leave money on the table. Those are facts. They are not relevant to determining a wise pricing strategy, except that they are facts to disregard. We might as well acknowledge these facts, and then agree to set them aside. Keeping them in the conversation keeps us from our goal of creating a strategy that accomplishes your intentions. 

Opinions. Everyone’s got one. 

Neighbors are great at hindering your sale. Tell your neighbor your REALTOR recommended a specific price for your home and watch what happens. They’re going to tell you the price is low. “For your house? No way. Your house is worth a lot more than that!” I’m confident of this too: Talk to three REALTORS. Tell them the price another agent suggested, and might get a similar response from one or two. The same way the neighbor wants to avoid offending you, the agent hopes they can impress you by enticing you with the opportunity for more money. Now, the REALTOR might be more likely than the neighbor to have relevant facts to arrive at their opinion. Ask to see those facts. 

Agree on the facts. Put them on the table. Decide what matches your objective.

After stating my opinion and showing the facts I used, restating the objective of the seller as I understand it, sometimes owners want to see if an opinion or irrelevant fact will change my opinion to better align with their hope. My answer is always the same. If this is still your objective, the facts I presented are still the relevant facts, then my opinion can’t change. It’s not my place to be agreeable or disagreeable. The question I set out to answer doesn’t change with more information unless the information corrects what I thought was a fact. I’m not concerned with offending you. I’m concerned with presenting you with a strategy based on facts to accomplish your intention. If a person is offended, it’s because their intention has not been stated.

Author: Tom Meyer, Owner-Broker, Essential Real Estate, LLC Madison, WI

The real estate transaction, disclosure, and confidentiality are the business of a Wisconsin licensee. It's in the transaction where the skill of the licensee, and their commitment to the law where the public is protected or placed at risk. Essential real estate services are specified in real estate license law. Those services are worth professional fees. Paying professional fee rates for administrative services is a choice when an alternative exists. We are that alternative. Old business model commission rates are taxing the home equity of American home sellers. Essential Real Estate LLC was created so our clients keep more of their home equity, spend less on broker fees, and receive skilled representation in negotiating purchase agreements.

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