The Ultimate Pricing Guide
After weeks of fielding calls from agents and experiencing lots of frustration on every issue surrounding pricing a home, I decided it was time to take a new look at pricing. If someone thought it was simply a matter of looking up a previous sale on MLS, they are sadly mistaken and I’m hoping this blog post will show just how much work goes into nailing the right price. By the way, the price is just one part of the equation because a well priced home needs a solid marketing strategy to go along with it.
In the scenario we assume that “The Call” comes from someone who found you. From that call we work our way down to “The Price”. What happens between the two points is a complicated process. In the first stage the agent is thanking the caller and finding out how they found you. Obviously you want to know what’s working. Is it your flyer? Website? Referral? The initial conversation gives you the opportunity to let the caller lead the conversation and for you to get an appointment.
The next step is to take the basic information about the property and start your preliminary fact finding. The graph below outlines many of the tools we use to develop our first opinion. While you are doing this, you have presumably already sent the caller your PR package so that when you show up, the caller has had an opportunity to get to know you.
Early in the process of drawing out the Ultimate Pricing Guide we talked about the benefits of the one or two step process. In the one step process you are showing up with a price in mind. In the two step process you are showing up to review the property and then going back a second time to present your price and strategy. One agent argued that the two step process gave other agents the opportunity to muscle the caller into signing a listing contract, while others agued that the two step process gave you the opportunity to build a better and more trusted relationship with the caller. It seems that the initial conversation should hint at what approach you should use.
Well, your next step is to meet the caller at the property. The kitchen table seemed to be the number one location to talk shop. This is your opportunity to build rapport, trust, ask some more questions about the property and above all…..listen, listen, listen. Depending on your strategy you may jump into your CMA or you may take lots of notes and book a time for a return appointment.
The last step is to work with the caller (hopefully a client by now) to determine the price of the property by explaining the benefits and pitfalls of different price points. Some agents outline the importance of pricing in their PR package or have a FAQ section on pricing in their website.
Regardless, the Ultimate Pricing Guide drove home a very important point…..getting from A to B is not a simple process. For the more experienced agents the exercise drove home the idea that there is more to working on experience and gut feel. For the newer agent it reminded them that there are several ways to get to the right price.