As a top agent, you know how critically important it is to price your listing right in order to get it sold. Overpricing guarantees your listing will languish on the market. Languishing means that the home usually sells for less than it could have, had it been priced correctly from the get-go! That’s why we spend so much time trying to convince our sellers to price their home correctly on day 1.
The two most common hard ways to determine that magical “right” price are:
- Comparative Market Analysis (CMA) – Search the MLS for comparable closed sales. Add or subtract for relative strengths and weaknesses of your listing.
PROS: Scientific and factual.
CONS: Sellers latch onto whatever information gives the highest price.
- Peer Agent Pricing Opinions – Invite other agents to render their opinion of price. Throw out the high and low and take the average.
PROS: Closer to real market value.
CONS: Only as good as the agents you invite. Seller latches onto the highest opinions and dislikes those agents with lower opinions.
And the easiest way to price a listing is? (Drum-roll, please…)
- Ask Seller for his Price, then subtract 10-20% – During the listing presentation ask, “What do you think is the right price?” Depending on property and market, the correct price will be 10-20% below that.
PROS: Super easy and most accurate.
CONS: Requires you to convince the seller that he is unrealistic.
Check it out for yourself. Examine your last few closed sales. Recall what price the seller originally told you they expected and compare that to the closed price. Unless you are in one of those rare, multiple offer markets you’ll find that most of your listings closed for 10-20% below the seller’s stated valuation!