We’ve all been there. A guy is talking to another guy at a party and it turns out that the first guy is a doctor. The second guy asks him about a pain he is having. What is the usual response? “It’s most likely nothing but if the pain persists then go see your doctor”. I get the feeling that it’s part of medical school training. Deflect the question….don’t answer the question…under any circumstances. Actually, there are variations of this inquiry from a member of the public to someone in any profession whether it be lawyer, accountant or dentist. The responses are often non-committal thus proving the point that free advice is worth exactly what you pay for it.
So why don’t we have a canned responses to the millions of questions everyone asks a Realtor? “What’s my house worth”?, “What did that house sell for”?, “Any good deals out there”?. The list goes on. The truth is…we probably think we have to. I mean if I don’t give it them, they’ll just get the answer from someone else. Does that essentially mean that we don’t see value in what we do for a living? No, I don’t think so. I would look at it differently. Part of the reason I sell real estate is to help people buy or sell a home. It’s the perfect job. The satisfaction, when you do a good job, is off the charts. I like to help people. The problem is that some of us don’t know when to stop.
A few agents I talked to said that they are happy to give advice but it is important to recognize the signs that you are being mined for information and act accordingly. You have to ask yourself if that casual curiosity turned into something more? If it has then it’s time to move on to the next phase of the conversation… “lets meet early next week, it will give me some time to do a bit of research so I can give you the RIGHT answers”. In this conversation the execution is everything. Stopping them in their tracks and postponing it to a later time and day makes the encounter serious. The truth is that there is value in giving free advice. Helping people is in our DNA, just don’t let someone take advantage of your knowledge.
mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.
Check out the latest guest post from my good friend and stellar Real Estate coach Suze Cumming. If you haven’t already, please check her out and subscribe to her blog because it is awesome. Suze has trained many top agents in Canada and is responsible for my of the successful agents at Bosley Real Estate. You can check out her website http://www.thenatureofrealestate.com/
How do you get good at pricing homes? Twice now I’ve lost a listing because my price was wrong. Once it was too high and the other time it was too low and the house ended up selling for $40k more than I thought. I am not only losing the listings, I’m starting to second guess myself all the time. Is there a course or something that I can take?
Pricing matters in real estate and unfortunately, it’s not an exact science. By definition, market value is uncertain as it estimates the value based on what we think buyers and sellers will agree on. To make this estimate, we look at what different buyers were willing to pay for different properties in the recent past. There are a lot of variables in this process and this creates a large margin for error.
Let’s look at the formal definition of market value:
“The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue influence”
I recommend that you keep a copy of this definition with your listing presentation material. It will help you focus on what you are trying to estimate when you are pricing homes and it will help your potential clients understand that your price is an estimate based on factors that we cannot always determine accurately.
The most difficult thing about market value is that it can change very quickly. It can jump up if there are several buyers desperate to get a home in a certain neighbourhood and there is nothing for sale. It can drop significantly due to changes in the economy, world news, threats, rumours, and such. Many of these things are beyond our ability to predict.
I had several listings when the World Trade Center Disaster occurred and their value changed significantly in an instant.
To get good at pricing, understand the definition and then practice. Inspect as many homes as you can in your market place. Estimate what you feel they will sell for. Think deeply about how buyers will perceive this product in this market at this time. Make notes about what you think the home will sell for and why you think that. Then go back when these homes sell and see how accurate you were. If you are way off, speak with your broker or other agents in your marketplace to uncover what information you are missing when estimating values.
I use to underestimate home prices on busy streets. It was my own personal bias because I really value quiet and couldn’t imagine living with the traffic noise. As a result, I only ever sold one home on a busy street in 28 years in the business and I felt guilty about it. (They are still living happily on Mt. Pleasant Avenue in Toronto after 16 years). It’s challenging to keep our biases out of the process but awareness and practice will get you there.
A course on pricing? Good idea. I’ll work on it.
Columnist, The Nature of Real Estate