4 Steps To Pricing Perfection
I recently listed a house where the Seller’s had interviewed 10 agents. When I talked to them, one of the frustrations that they had was when it came to pricing, all of the agents showed up with a print out of the solds in the area and an average price solely based off of that information. Their comment to me was ~I can do that on my own using www.Zillow.com. Hmmm. It’s a rare but interesting moment when you get to truly see how your service is perceived in the eyes of the consumer.
I let them know that I actually use several different methods to evaluate price on a property and then start to look for patterns. Here are the tools that I used which ultimately won me the listing:
~ First is what I call the appraisers method. I take the sold properties that I think are most comparable to the property that I am pricing and start making adjustments. The first thing I do is a square footage adjustment of $100 per square foot. Then I start adding and subtracting money for upgrades, lot size, view, etc. Anything that you feel would affect the price positively or negatively.
~ Second is an average price per square foot of that immediate neighborhood. In this case I don’t worry about how comparable the houses are in terms of size, but I am looking for a close in grouping of the same builder, age, etc to see what the average price per square foot is and how it calculates out on this house. Note: price per square foot does not work well if you are comparing view properties with non view properties since that can have a significant impact on the price. Make sure you are using properties with similar views.
~ Third is to find the ratio of sales price to tax assessed value. Granted the tax assessed value is rarely the same as the sales price, but I find that there is a pattern in the ratios. Take the average of this pattern and apply it to your house. * When you are doing this, make sure that you are using the same tax year for all of the properties.
~ Fourth is to determine the radius that you think a Buyer would search around your house and determine the price per square foot for the entire area so that you know how competitive your property is with those in the immediate neighborhood as well as others that Buyers might be looking at.
In the case of the clients that I mentioned in the beginning of this post, all four methods produced a fairly tight range that we were able to take the average of. Interestingly enough, my price was in line with what all of the other agents had give them. What was different was the way I went about it and articulated it to the client. How you deliver and support your information is important. Try these methods on your next listing appointment and see how they work for you.
Signup to receive Nicole's blog posts via email weekly:
Other Posts
What If Your Income Didn’t Depend On The Market?
There are multiple markets occurring right now – in the same cities, on the same streets. Sellers are experiencing it one way. Buyers are experiencing it another. And agents? All over the board. Same market. Completely different results. So what’s the difference? What you believe. What you look for. And how you show up. Two…
Permission To Fall Apart: The Truth About Resetting Your Energy
What if your next breakthrough is on the other side of your next melt down? There’s a side to energy and mindset work that no one talks about. Most teachings only talk about being positive. As in – ignore whatever you truly feel and pretend everything is amazing in hopes that you eventually believe it.…
I Stopped Waiting For The World To Change… That’s When Everything Did
I cringe when I look back at the things I used to believe about my business. Things like: For a long time, I believed these things were true, and out of my control to change. Until I learned how powerful energy and mindset are when applied to business. Here’s what my business looks like now…
I’m The Agent Who…
How you finish that sentence predicts your year. What you say creates your story, which becomes your belief. It determines your results and your experience of the world. The things you focus on, how you chose to view them – it’s all part of the recipe that creates your life. Some of you are reading…
When The World Gets Noisy
Markets like thismake or break agents. Now, more than ever, your success is determined by – What you believe – How you show up – Owning your value. Are you just trying to make it work with everything going on in the world? Hoping to find clients with the courage to move? Or Are you…
3 No Cost Ways To Attract Clients
This week we are going tactical. Good energy gets you in the right space to work with clients. But how do you actually find them? Here are my top 3: When we are slow, it’s easy for our confidence to dip, and when that happens we hibernate. Just like the flowers in spring, it’s time…
I See Your Doubt, A Message To My Younger Self
The year has officially begun. New listings are popping up everywhere. I haven’t sold anything yet. It’s common for my year to start a little slow. My business typically ramps up in April. In the past, my confidence would tank as I compared myself to others. This year is different. Some of this comes from…
The Neuroscience Behind Proof It’s Working
I’ve been talking a lot about finding Proof That Things Are Working in your daily life. Deliberately looking for moments where things are working out has a powerful effect on your energy, mindset, and the results you achieve. And it is backed by neuroscience. When we look for the good, it trains your brain what…
What To Do When Everyone Else Is Winning – And You Aren’t
First, I’d say – you’re being way too hard on yourself. It’s more likely that you’ve had wins, and missed them. This came up in my Proof It’s Working (PIW) group this week. What do you do when it feels like nothing is working, and you don’t see any wins? Step 1: Redefine what Proof…
Do Something Today Your Future Self With Thank You For
We assume that success comes in big waves. We search endlessly for the one thing that will unlock the door to whatever it is we want. But, that’s not how success works. Success is a series of actions. It’s showing up consistently. It’s doing what needs to be done. It’s taking care of yourself mentally,…