When I list a property, I always explain to my sellers that every potential buyer fits into one of these three categories:<\/p>\n\n\n\n
1. Bargain Hunters<\/strong> – These types will wait until your property has been on the market for some time; then they\u2019ll start lobbing low-ball offers. There\u2019s no need to discuss Bargain Hunters any further since they\u2019re the last type of buyer anyone would ever want to attract. So that leaves only two buyer types we actually care about.<\/p>\n\n\n\n 2. New Buyers<\/strong> – 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). <\/p>\n\n\n\n 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\u2019ve lost the advantage of urgency and excitement that goes hand in hand with a new listing.<\/p>\n\n\n\n 3. Current Buyers<\/strong> – They\u2019ve already seen most (or all) of your competitors, so what are they waiting for? <\/p>\n\n\n\n New listings! <\/p>\n\n\n\n This is why there\u2019s always <\/em>a flurry of showings immediately after you list. However, this rush subsides quickly. Then, you\u2019re waiting for New Buyers to enter the market (see above).<\/p>\n\n\n\n Of the three groups, Current Buyers are by far<\/em> the most important. They\u2019re 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. <\/p>\n\n\n\n In order to appeal to Current Buyers, it is vital to \u2018Price it Right\u2019 from the start.<\/strong><\/p>\n\n\n\n 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, \u201cLet\u2019s write an offer!\u201d<\/p>\n\n\n\n They must perceive that good value is being offered.<\/strong><\/p>\n\n\n\n Simply put, here\u2019s what happens when a buyer does not perceive good value:<\/p>\n\n\n\n They focus on the negatives.<\/strong><\/p>\n\n\n\n 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.<\/p>\n\n\n\n Therefore, if a Current Buyer does not perceive good value, what might they say?<\/p>\n\n\n\n \u201cI don\u2019t like the kitchen. Let\u2019s keep looking.\u201d<\/strong><\/p>\n\n\n\n On the other hand, if this same buyer does perceive good value, what might they say?<\/p>\n\n\n\n \u201cThis house is excellent! The cabinets are a bit dated, but that\u2019s not a big deal. Let\u2019s write an offer!\u201d<\/strong><\/p>\n\n\n\n This is Buyer Psychology 101. It\u2019s not actually the buyer consciously thinking about whether they \u201cperceive good value.\u201d Instead, it\u2019s a subconscious decision, which is far more powerful!<\/p>\n\n\n\n The bottom line is that everything needs to add up to trigger the \u201cLet\u2019s write an offer!\u201d response, including the property features, the presentation, and the price. But\u2026<\/p>\n\n\n\n It\u2019s the price that is the most critical component.<\/strong><\/p>\n\n\n\n This is why it\u2019s wrong to think, \u201cWe can always drop the price later.\u201d<\/p>\n\n\n\n In the example above, if the buyer doesn\u2019t perceive good value, they remember whatever negative they didn\u2019t like about the house. Therefore, even if you drop the price later, they\u2019ll still think about it as \u201cthe one with the dated cabinets.\u201d <\/p>\n\n\n\n Once the mind is made up, it\u2019s difficult or impossible to change it, even with a new and much lower price.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n You are probably thinking, \u201cI already know all this stuff.\u201d Of course, you do!\u00a0<\/p>\n\n\n\n But ask yourself these two questions:<\/p>\n\n\n\n 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?<\/p>\n\n\n\n 2. Do you have the skills needed to convince your client to \u2018Price it Right,\u2019 every time?<\/p>\n\n\n\n If you master these two skills, you\u2019ll make way more money, you\u2019ll get way more referrals, you\u2019ll have far less stress, and you\u2019ll love your job even more than you do now.<\/p>\n\n\n\n