Used to Price Properties in North America
1. An agent has no control over the market, only the marketing plan.
2. Never select an agent based on price.
3. Pricing in rising and falling markets:
- Overpricing in a rising market may be OK
- Overpricing in a falling market is disastrous.
Market trend is as important as pricing, make sure your agent understands market trends.
4. Four kinds of numbers used to represent your property:
- Cost – What was paid plus capital improvements
- Price – What the seller wants
- Value – What a buyer is willing to pay
- Market Value – What a willing buyer and seller will agree upon.
5. Regression and progression:
The phenomenon of an expensive house being decreased in value because of the lesser desirable homes around it.
The phenomenon of a home selling for more than its worth because of having more expensive property or a more desirable area around it.
6. Substitution The value of an amenity is based upon what it will produce not what it will cost.
7. Reasons for overpricing:
A seller cannot select, add to their lifestyle, enjoy it and expect the buyer to pay the original cost.
The need for money does not increase value.
- Buying in a Higher Priced Area
- Original Purchase Price High
- Lack Factual Comps
- Bargaining Room
- Move isn’t Necessary
- Corporate Buy Out
8. The largest impression and most impact a property makes on the market upon buyers and upon agents is in the first few weeks of the listing. Therefore, it should show the best and be priced the best during those weeks.
9. Benefits to Proper Pricing: Faster Sales which will save carrying costs and surety has value.
- Less Inconvenience
- Exposure to More Prospects
- Increased Sales person Response
- Better Response from Advertising the Sale calls
- Attracts Higher Offers
- Means More Money to Sellers
These pricing strategies were prepared because they may be a roadblock between you and your goals. My job is to identify these potential pitfalls and eliminate them.