5 Principles of Pricing Your Home Accurately - Video Transcription
Pricing your home accurately is so important in getting the right price for the seller. There's five principles in pricing your home accurately. The first principle is called price relevancy. You've got to be relevant to the buyers. If you list it too far above the buyers, with too much wiggle room, you'll be irrelevant. If you are irrelevant you might not get any showings or you might just get showings and no offers. You want to be like baseball. Basically, three showings and one offer at worst. Sometimes a very popular listing might get ten showings and eight offers and in the end the negotiator, if they're smart and they're patient, they're gonna wait until day number eight, nine, ten, eleven, twelve before they start finding out with buyer is the best buyer and then they'll drive the price sometimes way beyond the list price. So, price relevancy number one.
Number two. You gotta trust the market. The market being the buyers. When you price a home you're not pricing the home for one buyer to like you, you're pricing it hopefully so all the buyers like you. Buyers are all the same. If one buyer thinks you're a good deal so will the other five that are coming right behind them, so that's very important.
The next thing is, realize patience is a lot to do with getting money. A lot of Realtors/listing agents will negotiate the first offer that comes up. They'll sell a deal within two days of being listed. Some of them even do those coming soon listings where they don't even get on the MLS. That's the opposite of proving the value of home. To prove the value of the home you want to wait until day number 10 of the listing period. You want to see all the offers. It's really important to getting the right price.
The other thing is you got to know what you're selling. If your home is an "A++" and it's a crazy nice home, you have to price it a little differently than if you're an "A+" or an "A" home. An "A" home is just a common home. "A" is average. So "A" means you're gonna get market value. "A+" means you'll get a little premium to market value and "A++" means premium to premium. If you're less than "A", if you're a "B" home, or a "B+" home that's a home that needs improvements. A "B+" home needs things. A "B" home needs lots of things. An "A" home actually needs some things so anything from an "A" to a "B", know that, because when buyers are going through your home, you know what they're doing? They've got a pad out there and they're taking notes. Floors "B", kitchen "A", bathrooms "A", and they're gonna put a number there like what it's gonna cost them to make it right for them and then their can compare all the deficiencies of your home to the other homes in the marketplace. These buyers are perfect. You've got to trust the buyers. So when you price a home you got to know what you're selling. Are you a "B", "B+", "A", "A+", "A++" etc. It makes a big difference. Also, for us as negotiators, it make a big difference because if you're A++, we might negotiate an appraisal shortfall off to the buyer. That's a little bit of a different topic but it has to do with the quality of what we're selling and the demand for the products.
Anyway, the principles of pricing is really important we understand them well at ADDvantage we'll guide you correctly. Thanks for listening to this video.