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Category: 11. Pricing Psychology

  • Early Spring vs Late Spring

    Early Spring vs Late Spring

    I know it’s been a while. I’ve been concentrating on my real estate business, which is going well.

    The following is taken from my monthly newsletter I send to clients, but it occurred to me that you might find it helpful.

    To be clear, I’m not giving permission to copy my articles word for word! Everything I write is copyrighted. However, if my words help you adjust your mindset, that’s great!

    This is based on my market—Calgary—but the same theory applies to every Canadian market. Even if your market conditions are much more negative, there’s still a certain point where you pass the peak of the spring market. You just need to take the time to analyze your own numbers. (The change may actually be much more severe than it is here. Believe me, I’ve been through every different type of market. But the main point of the article is that one of the keys to success is the ability to quickly adapt.)

    I’ll send another Real Agent Memo soon! In the meantime, I hope you’re having a great year!

    Early Spring vs Late Spring

    Welcome to the Late Spring Market, a significant transition point past the peak of the market in terms of sales volume.

    You may wonder: If the total sales in May were more than in April, how can I say we’ve passed the peak? The answer lies in the trend. 

    Looking at the weekly and daily stats, I can see that sales climbed steadily throughout April until mid-May, and they’ve been declining ever since. A detailed analysis allows me to accurately state that May 15 was the peak of the market for detached homes in Calgary.

    What does this mean in practical terms? It means that sellers need to adjust their expectations. 

    1. The available inventory has risen steadily since February 1st and is now about 50% higher than it was then. 

    2. Sales have steadily declined since mid-May, as mentioned. This trend will continue, with little or no deviation, from now until December or January. I can confidently state this, backed by two decades of diligent market observation and analysis.

    3. Fewer multiple-offer scenarios are occurring now compared to a month or two ago. This trend will also continue, partly due to different market conditions with more listings and fewer sales, as already discussed. But there’s one more important phenomenon: 

    ‘Early Spring Buyers’ are more willing to jump into multiple-offer scenarios and bid much higher than the list price to get a property. They’re early adopters with a different mindset than ‘Late Spring Buyers,’ who tend to be more conservative and less inclined to write much over asking. (This partly explains why they haven’t bought anything yet!)

    Here’s another significant factor that sellers should consider:

    At any given time, only a limited number of buyers might consider buying in your geographical area and price range. For the sake of simplicity, here’s a breakdown of when 50 theoretical buyers might buy a single-family detached home between March and August:

    March – 8

    April – 12

    May – 12

    June – 8

    July – 6

    August – 4

    Based on this, if you wait until July to list your home, 80% of your potential buyers have already bought! AND, the remaining buyers have much more inventory to choose from! AND, these remaining buyers tend to be more conservative!

    Can you see now why sellers need to adopt a different mindset in the late spring?

    Anyone can look back on what happened in March, April, and May and assume it will be the same moving forward. That’s a huge mistake!

    Many other factors also affect the market, but ‘Early Spring vs Late Spring’ is a significant one that must be considered to achieve success. 

    The bottom line is that in ‘Late Spring’ (now) it’s even more critical to:

    1. Price it right from the start (not too low and not too high), and;

    2. Ensure that your property stands out from the crowd.

    A skilled and experienced agent will guide you in accomplishing both objectives. Even more importantly, they will constantly alter their mindset to adjust to changing trends, and always tell their clients precisely what they believe to be true.

    Ted Greenhough

  • The Intelligent Price Reduction Strategy in Two Easy Steps

    The Intelligent Price Reduction Strategy in Two Easy Steps

    (Note This is a rewrite, but it’s been a while and it’s important!)

    We all overprice a listing, occasionally. After all, this real estate thing is an inexact science.

    When (not if) it happens to you, it’s crucial that you face up to it, and not use one of these lame excuses:

    1. You’re too busy (chasing after new business rather than taking care of the business you already have).

    2. Your clients are stubborn and won’t listen to you.

    3. You’re terrible with confrontation.

    4. There’s a showing booked for Friday, and you’re hoping for a miracle!

    5. The market is awful, so there’s nothing you can do.

    6. You feel dumb for recommending the price in the first place.

    7. (Insert your ‘unique’ lame excuse here)

    An excuse is simply a challenge that you’ve decided has power over you. – Jen Sincero

    I’ll just cut to the chase right now and tell you the REAL reasons why you’ve still got an overpriced listing. Pick one:

    1. You’re not giving your clients ENOUGH information

    2. You’re not giving them the RIGHT information

    3. You’re not giving them ANY information!

    Remember this: 

    The BETTER the information you provide, the more likely your clients will have the tools they need to make informed, intelligent decisions.

    The name of this article, “The Intelligent Price Reduction Strategy,” is actually a misnomer.  But my original title seemed a bit long:

    “The Easy and Powerful System that Consistently Delivers Compelling Information to Your Clients so They Can Make Intelligent Decisions.”

    Whatever you want to call it, it’s about being proactive and providing your clients with the information they need. Here are the two steps.

    Step 1

    Set up every listing client on an auto-notification to instantly update them about every competing new listing, price reduction, pending sale, firm sale, etc. This way, they’ll always know exactly how they stack up against their competitors.

    Step 2

    Using the information in Step 1, report to your clients once every week at a pre-determined day and time (every Monday at 10:00 a.m., for example). In your report, simply provide your expert commentary on each and every event that occurred over the previous seven days. 

    Here’s what I think about this new listing or this one that just lowered their price, why I think this one sold and yours didn’t, etc.

    This may sound like a lot of work, but it’s not if you set up a proper system and work it consistently. Just respond to this email, and I’ll send you a simple 2-page report with more detailed information on this system to ensure you do it right.

    And let me be very clear about something. The purpose of this system is NOT to harass your clients about price reductions.

    The real purpose is to maintain regular, honest communication with them so they know you are paying attention. This permanently resolves the biggest complaint that consumers have about real estate agents—lack of communication.

    “The agent walked out the door with the signed listing contract, and we never heard from her again until she called demanding a price reduction.”

    Don’t be that person.

    Instead, take a few minutes to learn more about this system. Price reductions are easy if you learn to communicate with your clients regularly and give them the information they need!

    All you have to do is respond to this email, and I’ll send you additional information. It’s only two pages, but it explains this system better than I can in this short RAM.

    Don’t worry! I promise I won’t harass you to buy my course. I just want us all to be a little bit better.

  • The 3 Buyer Types and Why Sellers Need to ‘Price it Right’ from the Start

    The 3 Buyer Types and Why Sellers Need to ‘Price it Right’ from the Start

    When I list a property, I always explain to my sellers that every potential buyer fits into one of these three categories:

    1. Bargain Hunters – These types will wait until your property has been on the market for some time; then they’ll start lobbing low-ball offers. There’s no need to discuss Bargain Hunters any further since they’re the last type of buyer anyone would ever want to attract. So that leaves only two buyer types we actually care about.

    2. New Buyers – They enter the market continuously. Within your area and price range, I estimate there will be one New Buyer starting their search weekly (state whatever number you believe to be true). 

    However, the problem with New Buyers is that they probably have not yet gained the confidence to write an offer. So even if they come back in a week or two, you’ve lost the advantage of urgency and excitement that goes hand in hand with a new listing.

    3. Current Buyers – They’ve already seen most (or all) of your competitors, so what are they waiting for? 

    New listings! 

    This is why there’s always a flurry of showings immediately after you list. However, this rush subsides quickly. Then, you’re waiting for New Buyers to enter the market (see above).

    Of the three groups, Current Buyers are by far the most important. They’re not only the largest group but also the most motivated; ready, willing, and able to write an offer the moment they find the right property. 

    In order to appeal to Current Buyers, it is vital to ‘Price it Right’ from the start.

    These buyers need to like the property, of course; it has to appeal to their wants and needs. But one more critical aspect is required to trigger them to say, “Let’s write an offer!”

    They must perceive that good value is being offered.

    Simply put, here’s what happens when a buyer does not perceive good value:

    They focus on the negatives.

    For example (use something real that the sellers already know), we know that your kitchen cabinets are cheaper and more dated than your competitors. Everything else in the house is good, but this is one of the weaker features.

    Therefore, if a Current Buyer does not perceive good value, what might they say?

    “I don’t like the kitchen. Let’s keep looking.”

    On the other hand, if this same buyer does perceive good value, what might they say?

    “This house is excellent! The cabinets are a bit dated, but that’s not a big deal. Let’s write an offer!”

    This is Buyer Psychology 101. It’s not actually the buyer consciously thinking about whether they “perceive good value.” Instead, it’s a subconscious decision, which is far more powerful!

    The bottom line is that everything needs to add up to trigger the “Let’s write an offer!” response, including the property features, the presentation, and the price. But…

    It’s the price that is the most critical component.

    This is why it’s wrong to think, “We can always drop the price later.”

    In the example above, if the buyer doesn’t perceive good value, they remember whatever negative they didn’t like about the house. Therefore, even if you drop the price later, they’ll still think about it as “the one with the dated cabinets.” 

    Once the mind is made up, it’s difficult or impossible to change it, even with a new and much lower price.

    If this happens, and you miss out entirely on the biggest and most motivated group – the Current Buyers – it becomes more and more challenging to achieve the price you want.

    You are probably thinking, “I already know all this stuff.” Of course, you do! 

    But ask yourself these two questions:

    1. Do you have the skills to determine the correct list price (the one that will result in the highest possible sale price), every time?

    2. Do you have the skills needed to convince your client to ‘Price it Right,’ every time?

    If you master these two skills, you’ll make way more money, you’ll get way more referrals, you’ll have far less stress, and you’ll love your job even more than you do now.

    For more information about how to present pricing options, check out this article, ‘Running the Odds on Real Estate Pricing.’

  • How to Become the True Area Expert and Have Fun Doing It

    How to Become the True Area Expert and Have Fun Doing It

    This RAM is intended mainly for newer agents or any REALTOR® with the right mindset, including myself. Sometimes, writing this article every two weeks reminds me of what is important, so I’ve already implemented steps to follow my own advice!

    Have you ever had a buyer client tell you, “We didn’t want to bother you or waste your time looking at that property?”

    When this happens to me, I have to remind my clients that there’s nothing I’d rather do than go out to look at properties! It’s the funnest part of the job for me! I hope it is for you too.

    I also tell my clients to think about looking at properties as ‘homework.’ The more they see, the more they will learn.

    From your perspective, you should think about every viewing as an opportunity to add a little more cement to your relationship and to learn something yourself, whether they buy the property or not.

    Always try to maintain a Beginner’s Mindset.

    Even without your clients, you can learn a lot by previewing properties, especially in your Geo Farm area if you have one, or even if you don’t.

    Simply set yourself up to be notified every time there’s a new listing within the area or specialty you are interested in; then set up a preview as soon as possible after it’s listed.

    When I refer to a ‘specialty,’ it doesn’t need to be a Geo Farm necessarily. Maybe you want to become the known expert at a particular property type within a specific price range. Whatever your interest, set up a search for yourself. 

    To be clear, there’s nothing wrong with previewing listings if you’re up-front about it. Do not pretend that you’re showing the property to clients. Just tell the listing agent it’s a preview, and if the time requested isn’t convenient for the seller, work our a different time. 

    The listing agent will respect your honesty, and almost always, they’ll try to accommodate your request. But if the seller doesn’t want any previews, don’t worry about it. Just skip that one; no big deal.

    If you’re going to be serious about this, I strongly recommend building and maintaining a simple spreadsheet with columns for the MLS number, address, date of preview, price, pros, cons, results, etc. This may seem unnecessary at first, but it will become invaluable later. 

    Also, set up another search in your system for each property you’ve viewed, so you’ll be notified when there is a change in status. Then you can update the ‘results’ column on your spreadsheet. Just set up a search for the specific MLS numbers you’ve viewed. 

    To take it to another level, try predicting what will happen. For example, will it sell close to asking? In what time frame?

    The insight gained from viewing properties in person, thinking about each one, and then tracking the results, can make a massive difference to your knowledge and skills. 

    Simply reading the listing agent’s description is okay, but it will never give you the whole story. They never tell us the bad stuff, right? 

    But it’s the unspoken negatives that fill in the picture, allowing you to speak knowledgeably and gain a greater understanding of what factors truly affect pricing. 

    This in-depth knowledge will become gold for you later when you’re at an Open House or doing a CMA. After all, it’s one thing to look at the limited information available on listings (the same data available to every one of your competitors). But it’s quite another thing to be the ONLY agent who has previewed every active and recently sold property in the neighbourhood. 

    This gives you a decisive advantage over all your competitors, including those who tout themselves as the “Area Expert,’ but who don’t have anywhere close to the same level of knowledge you’ve accumulated. 

    You might be surprised to find out that the True Area Expert is you!

    When you run into someone who wants to know the ‘scoop’ on what’s happening in the neighbourhood, you’ll be able to paint a detailed picture based on your in-depth first-hand knowledge. The first time this happens, you will understand the power and confidence of being the True Area Expert. 

    And you’ll be surprised at how this simple process will help develop your overall skills as a professional real estate agent. For example, you’ll start to develop a sixth sense about pricing. Based on your first-hand knowledge of a concentrated group of listings, you’ll begin to understand what is important and what isn’t. 

    This knowledge tends to permeate the subconscious and becomes a valuable skill you’ll be able to draw upon, no matter which geographical area you happen to be working in.

    It’s not easy to become a true expert in real estate, but once achieved, this can have a profound positive effect on your confidence, and it’s free! All you need is the right attitude, which includes the willingness to stick to it and establish a system, including keeping impeccable notes.

    You have to stick to it because you won’t notice much difference after viewing 5-10 listings. After 50-100? You will have achieved the status of True Expert. Now, you need to keep it up.

    The next step is to learn how to demonstrate your expertise to as many people as possible. That’s a story for another day. Or perhaps several stories. 

    I’m glad I wrote this because it’s inspired me to get back to doing it myself. I just booked two previews for this afternoon. This is gonna be fun!

  • ‘Running the Odds’ on Real Estate Pricing

    ‘Running the Odds’ on Real Estate Pricing

    ‘Running the Odds’ is a simple technique to help sellers and buyers take some of the mystery out of pricing.

    Here’s an example where my listing clients and I are trying to determine the best list price (somewhere between $799,000-$825,000).

    Option 1: Sale Price Odds with $825000 List Price

    <$800,000 = negligible ~ 0%-1%

    $800,000-$820,000 = 25%

    $820,000-$835,000 = 25%

    $835,000-$850,000 = 25%

    >$850,000 = 25%

    Option 2: Sale Price Odds with $799,000 List Price:

    <$800,000 = 10%

    $800000-$820,000 = 10%

    $820,000-$835,000 = 15%

    $835,000-$850,000 = 30%

    >$850,000 = 35%

    The odds are based on my experience and my property evaluation, accounting for the current market conditions, which are bonkers in my local market (slightly less bonkers than a month ago but still bonkers). So yes, I’m fully expecting multiple offers in both scenarios. But I also know that the higher the list price, the fewer offers are likely to be generated.

    (By the way, if you’re an Analyzer, don’t get hung up on the numbers in my example. You would need far more information to determine if I’m right or not, so just concentrate on learning the basic technique.)

    Here’s the message I want my clients to get: 

    If they choose the lower list price ($799,000), the odds are about 10% that they’ll get less than $800,000 (if they only get one offer). But, conversely, the odds would be higher that they’ll get a sale price of $835,000 or more (65% vs 50%) because a more aggressive list price in our current market increases the odds of more offers. Right?

    Of course, you can break this down further or show alternate scenarios, depending on what the client wants to understand.

    Now, it’s up to the client to choose! 

    For example, if they don’t want to risk even a 10% chance of ending up with a sale price under $800,000, they may choose the “safer” list price of $825,000. 

    On the other hand, if they have a higher tolerance for risk and choose the more aggressive list price ($799,000), I believe they’ll get more offers, and therefore they have a higher chance of hitting a home run. 

    By ‘Running the Odds’ with your clients, you’ll provide options and allow them to make their own decision based on their risk tolerance.

    So how do my clients feel about receiving this type of information?

    They love it! They feel relieved and enlightened, like I’ve completely removed the mystery around pricing. What felt like a crap-shoot before now seems like a simple solvable problem.

    Of course, this isn’t the only information I provide to my clients to help them make informed and intelligent decisions. For example, ‘The Big Picture CMA’ and ‘Pricing Psychology’ are two of the modules in the Agent Skills Master’s Program that help me arrive at the correct price range in the first place.

    (By the way, I’ve just recently updated the module descriptions on our website if you’d like to learn more about these modules. Just click on the link above and scroll down to “module descriptions.”)

    You can ‘Run the Odds’ on the buyer’s side also, using a similar methodology when you’re deciding on a price in a multiple-offer scenario.

    What are the odds of winning with varying prices in a multiple-offer scenario? 

    ‘Run the Odds’ to paint a clear picture and allow your clients to decide how badly they want the property.

    This can be a great way to demonstrate to your buyer clients that they have more control than they think they do. Simply use your skill and experience to determine the different odds.

    I’m curious if any other agents are using this method or something similar. Please let me know! 

    I’m always interested in fine-tuning my systems and procedures, as you should be too!

  • Buyer Psychology – The Perception of Value – Part 2

    Buyer Psychology – The Perception of Value – Part 2

    Click here to read Part 1

    Last week, I wrote about the fundamentals of why buyers buy, and how the brain must perceive good value (consciously or otherwise) to trigger the “let’s write an offer” response.

    So, what if a buyer does not perceive good value?

    Simple: They focus on a negative.

    For example, let’s say your new listing has inferior-quality kitchen cabinets compared to other similar-priced listings in the area. It’s got lots of good stuff going for it too, but the cabinets are one of the negatives.

    Of course, every listing has pros and cons. That said, every factor, good and bad, needs to be taken into account when you set the list price. Otherwise, here’s what can happen:

    During the “initial flurry” immediately after you list, buyers Sam and Suzy view the property, but they do not perceive that good value is being offered. They focus on the inferior kitchen cabinets and decide they don’t like the home.

    Two weeks later, you realize you’ve overpriced the property, and the seller agrees to a $10,000 price reduction. Sam and Suzy notice the price adjustment. Will they now reconsider the property?

    Not a chance. They recall, “Oh, that’s the house with the crappy cabinets”. 

    Sam and Suzy have made up their minds. ‍♀️

    Now, the initial flurry of activity is over, and the showings slow down dramatically. You finally sell the property months later, after two more price reductions. The sellers are not thrilled, and you can be confident they won’t be sending you any referrals. 

    Pricing it Right From the Start

    But what if you had priced the property $10,000 less, to begin with?

    Same scenario: Sam and Suzy view the property shortly after it’s listed. This time they perceive good value. They still notice the kitchen cabinets aren’t great, but now this feels like no big deal, compared to all the positive features being offered. Sam and Suzy agree that they could upgrade the cabinets later.

    Because it’s a new listing, they write a strong offer, and an agreement is reached quickly. 

    Everyone is thrilled, particularly the sellers, who got their home sold quickly, for the highest possible price, and with minimal hassle.

    Who’s the hero?

    You are.

    Why? Because you had the necessary set of skills required to convince your sellers to price their home correctly from the start.

    One more sale in the books! But far more important than any single sale, you’re building a raving fan base and a business that thrives on a never-ending stream of referrals. 

    That’s the foundational theme of the entire Agent Skills Master’s Program. You don’t get referrals by asking; you get them by deserving. 

    This article was inspired by module #11 – Pricing Psychology – part of the Agent Skills Master’s Program. 

    In ‘Pricing Psychology,’ I explain step-by-step how to demonstrate the importance of pricing the property correctly from the start, to sell quickly, for more money, and with the least amount of hassle. Clearly show your clients how making smart choices will positively affect their results.

  • Buyer Psychology – The Perception of Value – Part 1

    Buyer Psychology – The Perception of Value – Part 1

    Why do buyers buy?

    The reasoning is not much different in real estate compared to anything else. Buyers are comparison shoppers. They review all the available “goods” on the market and then choose the item that gives them all the features they want. And most importantly…

    The one that is offering the best value.

    Obvious, right? So why are there always so many over-priced listings on the market?

    It’s not the seller’s fault. It’s the fault of their agent who lacks one or both of the following skills:

    1. The ability to determine the list price with the highest probability of maximizing the sale price
    2. The ability to explain this in simple, straightforward language

    It’s the second skill that most agents struggle with. They get frustrated and blame the sellers for “not listening to their simple logic.”

    So, why did I never have this problem? Did I just get lucky and always got the smartest sellers who figured out the best price all on their own?

    I’m not bragging. I’m just pointing out that there’s a skill to educating your clients on choosing the correct price. And, as with all skills in real estate, there’s a direct correlation between skill level and income.

    All you need are the right tools. 

    I teach how to use the right pricing tools within three full modules of the Master’s Program (Setting the Stage, The Big Picture CMA, and Pricing Psychology).

    Wait. Is this a blatant self-promotional attempt to sell my online course?

    Why, yes. Also, I genuinely want you to be more successful.

    If you want to be one of those agents who are sought after, you need to understand that this business is not about completing one transaction at a time.

    It’s about creating a reputation as an expert.

    Being a pricing expert in real estate is not about merely knowing the right price. Most experienced agents are at least reasonably good at that.

    It’s the agents who are the best at educating, who achieve the greatest success.

    This is one of the most important skills needed to create a raving fan base and a business that thrives on a never-ending stream of incoming referrals. 

    That happens to be the foundational doctrine of the Agent Skills Master’s Program.

    This article was inspired by module #11 – Pricing Psychology – part of the Agent Skills Master’s Program. 

    In ‘Pricing Psychology,’ I explain step-by-step how to demonstrate the importance of pricing the property correctly from the start, to sell quickly, for more money, and with the least amount of hassle. Clearly show your clients how making smart choices will positively affect their results.

    Here’s another article inspired by the same module: The Only Three Stats You Need.

  • The Perception of Value

    The Perception of Value

    Great REALTORS® understand Buyer Psychology.

    The biggest, most motivated category of buyers for your new listing are ‘Current Buyers’, They’ve already viewed most or all of your competitors, but they’re not satisfied, for whatever reason. So, what are they doing?

    They’re waiting for new listings.

    As soon as you pull the trigger on your HOT new listing, notifications are going off all over town.

    It’s not hard to understand why most of the activity on your listing always occurs at the very start, and why this ‘Flurry of Activity’ tends to die off, quickly.

    Once the Current Buyers have come and gone, you’ll be left waiting for New Buyers to enter the market. But New Buyers are not as motivated as Current Buyers. They need more time to see more listings before they’ll be ready to write an offer.

    Ideally, you want to take full advantage of the Flurry of Activity from the Current Buyers, and sell quickly for the highest possible price with the least amount of hassle.

    But there’s an important caveat with ALL buyers that you must understand if you want to be a successful Listing Agent:

    Buyers MUST perceive good value in the property. If they don’t, they will focus on a negative. 

    This is the way our brains work. If we don’t subconsciously perceive good value (“this seems like a good deal”), we focus on a negative (“I don’t like this”).

    Now, the flurry is over. Two weeks later, the showings have dried up, and you drop the price $20K.

    Does the potential buyer think, “I hated this negative thing about that property, but perhaps I should now re-evaluate my feelings, based on this new price?”

    That’s a hard NO.

    Here’s the lesson:

    If a buyer perceives good value, they will OVERLOOK the negatives. If they DON’T perceive good value, they will FOCUS on the negatives.

    If you want to take advantage of the biggest and most motivated group of buyers – the Current Buyers – getting the price right from the start is critical.

    If your seller says, “We can always lower the price, later!” you need to logically explain WHY that’s a bad idea. 

     

  • Your Price or Their Price?

    Your Price or Their Price?

    “Is it your price or their price?”

    Every experienced REALTOR® has heard this question and knows precisely what it means, “Is this the price you recommended to your clients?

    Or, the one they insisted on, despite the evidence that clearly shows it makes no sense?”

    As a general rule, EVERYONE on the planet believes their home is worth more than it is.  There are several reasons for this:

    1. In the owner’s eyes, their home was the best one available within their budget and within their search criteria, at the time when they purchased it.
    2. Buyers subconsciously justify the price they paid, and tend to believe they got a “good deal.”
    3. Owners tend to focus on the best features of their property, either ignoring or justifying negative elements, “Oh, the sound of the train is quite soothing once you get used to it!”
    4. For competing properties, they tend to do the opposite; focusing on the worst elements and ignoring the best features.

    Having an emotional connection to your own home and believing it’s worth more than it is, is a perfectly natural human tendency. I’m no exception.  When I sell my house, I will undoubtedly ask for an opinion on the price of another trusted agent.

    I doubt very much that I’ll be happy about it!

    But a skilled REALTOR® is trained to look at your home through the eyes of current potential buyers and from a completely unbiased perspective.

    Accepting a listing at “their” price almost always means one of the following scenarios occurred, listed in order of the most likely to the least likely.

    1. The REALTOR® is unskilled and doesn’t know how to price a home accurately. This is WAY more common than what the public realizes because let’s face it; accurate pricing is BY FAR the most challenging part of being a REALTOR®.
    2. The REALTOR® is afraid to lose the listing if they push too hard on the price, so they acquiesce to the sellers, with the idea that “I can always work on reducing the price later.”
    3. The REALTOR® doesn’t care if the property is overpriced, because they will “use” the listing as a lead generator, and then they’ll work on reducing the price later. (This is a rare occurrence, but there are bad apples in every profession, and Real Estate is no exception.)

    The overwhelming most likely result of all three scenarios is this:

    After a very long time on the market, and having the price adjusted multiple times, the property finally sells at a much lower price than it would have if it were priced correctly in the first place.

    This is the opposite of what the public seems to believe about pricing, which is, if they are patient enough and “not in a hurry,” they’ll get their price eventually! But every professional REALTOR® knows that the opposite is true.

    The quicker a property sells, the more money a seller is likely to get.

    A new listing always generates the most excitement and interest. If priced correctly, buyers are fearful that someone else might buy “their” new home, and therefore, they’re more likely to put forward a strong offer.

    But pricing is tricky!  In fact, in my opinion, accurate pricing is hands-down, the most challenging part about being a REALTOR®. 

    Not only is it the most challenging part, but there is virtually NO training available anywhere to teach REALTORS® how to strengthen their skills in this critically important area.

    Why?  Because the truth is that hardly any REALTORS® are highly skilled at pricing. And if they are, they don’t want to teach their hard-earned skills to their competitors.

    But who else are you going to learn from? Someone who’s never even been a REALTOR®?  Ya, right.

    Confession time:  After several years of experience and having listed and successfully sold HUNDREDS of properties, I still felt very unsure of myself when it came to pricing.

    Do you feel this way?

    If so, this proves you are a high-integrity agent; one who takes your responsibilities seriously and one who doesn’t want your clients to have to pay for your costly mistake.

    I used to agonize for hours over pricing, long into the night, preparing for a listing appointment the next day.  I didn’t want to get it wrong!

    The opposite of this is the agent who spends a quick 15 minutes looking at comparables and thinks he can produce an accurate price. Or worse, the agent who pulls a price out of thin air, with ZERO homework. This happens far more often than the public realizes, often with slick “celebrity” agents who spend more time worrying about their public “image” than actually doing a good job.

    These types are the exception to the rule, thankfully.

    Most REALTORS® try their best when it comes to pricing, but it’s still the toughest part of the job, with virtually no proper training available.

    Think about it. You want training on how to make cold calls, and recite scripts on how to GET listing appointments? No problem!  There are a hundred trainers to teach you those “skills.” (Not me).

    But beyond the most basic text-book stuff they taught you in Real Estate School, which is entirely unrealistic in the real world, training on being a pricing expert is practically non-existent.

    Until now.

    The Big picture CMA and Pricing Psychology are two of the most eye-opening and in-depth modules in the entire Agent Skills Master’s Program.