Proven Pricing Strategies for Scared Sellers

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There’s no doubt about it, the real estate market is different today than it was just a few short months ago. Mortgage rates are up, home prices are down, and while it’s still a seller’s market, buyers feel more empowered to take their time and watch the market. If you’re meeting with potential sellers, chances are that your conversations have a different tone.
Long-time Boca Raton, Florida agent Terry Story recently sat down with James Shaw and discussed the skills and pricing conversations necessary to succeed in today’s current market. It turns out any agent is capable of succeeding in today’s changing market if they master 3 key things: knowing their market, understanding seller motivation, and pricing strategically for where the market is headed.
Necessary Skill #1: Know Your Market
More than likely, your potential seller has been watching what’s been going on in the market. They know what their neighbor sold his house for last year and they expect to sell their home for the same price. When they see the prices declining around them, it’s only natural that they are frustrated and scared. And they often blame their agents when they get less for their homes in the current market than their neighbor did last year.
To succeed in the changing market, James and Terry emphasize the importance of educating sellers so they don’t blame you for the market conditions influencing their home sales. To do this, you must know your local market and speak confidently about the statistics that relate to it so that you can guide your clients with confidence. How many homes are on the market in your local area? How many days do these homes stay on the market? By being a local market expert and sharing facts about where the market has been, where it is currently, and where you believe it’s going, you are able to provide perspective to both educate your seller and set realistic expectations around the sale of their house.
Necessary Skill #2: Understand Your Seller’s Motivation
In a declining market, it’s more important than ever to understand a seller’s motivation for selling. For instance, seek to understand the “why” behind their move. Ask why they are moving and what their timeline is. Terry explains that while we don’t know how long it will take for the market to return to its previous levels, if sellers are motivated, they can still achieve their plans.
However, it’s important to remind sellers that markets can’t go backward in time. If they are simply looking to get a certain dollar value for their home and plan to hold on to it until they reach that particular price point, they are not truly motivated sellers. When this is the case, Terry suggests switching your immediate focus to other, more motivated sellers.
Necessary Skill #3: Set Pricing Strategically
Pricing a home correctly for the current market is both a skill and a science. For sellers to truly understand the reasoning behind pricing a particular way, Terry believes a discussion about the current market is necessary.
Pricing strategies are critical – and they are often counterintuitive. While we think may think asking the highest price will net the highest sale, this isn’t usually the case. As Terry explains, when a home is priced too high, it won’t get as much interest and will sit idle on the market. When a home garners showings but doesn’t receive any offers, it’s likely still priced too high. This can often be misleading for sellers who think that buyers are interested in their home. As a result, a home can sit on the market for a longer period of time, costing sellers money in mortgage payments, taxes, and insurance. On the other hand, homes that are priced lower to meet the current demands of the market appear more valuable to buyers. As a result, these sellers receive more offers in less time, often bidding the sale price up. In today’s current market, the most successful agents employ pricing strategies that put more buyers’ eyes on their sellers’ homes.
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