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.
Last week I met with one of the newer agents in my office to discuss farming areas. Earlier in the month we talked about the need to actively farm neighbourhoods as part of an overall strategy to build business. He had concerns that by picking a farm area he was actually sending a message to his own contacts that he only worked in one area of the city. I thought he made an interesting point. Is it possible to pigeonhole yourself so much in one neighbourhood that potential clients may overlook you because they want to live somewhere else? If the general understanding is that people list their homes and buy homes with agents who “specialize” in one neighbourhood because they understand unique area idiosyncrasies does that mean you might lose a potential client if they are outside your core area?
Not necessarily. Check out the graphs below. I tried to demonstrate to the new agent that while it is important to have a strong understanding of your farm area, the breadth of your knowledge has to resonate throughout the city. How do you do that? It’s simple. You can learn a lot by being involved. Networking, participating in office meetings, following other agents through social media and getting out there. Nothing beats pounding the pavement, and reporting on market conditions. Going to every open house in your farm area is a good start but to be a real purveyor of knowledge, you have to broaden your horizons. This is a full time job.
So, the question is asked. If we are building our neighbourhood expertise, how much effort do we put into actively farming our area versus the rest of the city? The answer is clear. Devote your time to your core business. Learn everything there is to know about your neighbourhood and make sure people know about you. Door knock, drop flyers and buy billboards. Successful agents know that it is as much about being a smart marketer as it is about networking. Business outside of your farm neighbourhood will come once you have proven that you are knowledgeable in the market as a whole.
Finally, it is important to realize that successful agents are always building their business. Whether it’s your farm area or your network of friends and associates, your daily routine involves giving everyone a little nudge, just a little reminder that you are out there to answer questions or spring into action. Spend your day actively getting business for the Spring or Fall markets but remember to stay in contact with people who will be a source of business to you well into the future.
The views expressed here may or may not represent the views of Bosley Real Estate, Ltd, Brokerage.