Keith’s Musings Vol. 2: Pricing

Today I am meditating on the price discussion.

This will be/is paramount as we continue to slow down. I mentioned a bit yesterday that sellers are often slow to accept the new reality.  You’ve got to help them self-discover that new reality.

And I say self-discover for a reason. That is my first mindset piece I think about when approaching this. Look, we don’t know for sure what it is going to sell for. We have a more educated, experienced  and informed idea than the seller but we don’t KNOW know. They don’t either. So this should be an experience where we talk, share and explore what the right marketing price should be together. Since it’s really worth what someone will pay on the day you’re ready to sell it. Prior to that it’s educated (or not so much) guessing.

My three keys to pricing something properly:

1. Know your numbers. COLD. Like Ice Cold. Like Ice Man from TopGun cold. Like you’ve walked the comps, hand selected the best ones and have a deep understanding of the comps and what makes them what they are.  Go the extra mile here to really have knowledge here.

2. Condition matters more now. We didn’t have to really get properties ready to sell in the last few years. Buyers were so squeezed they’d take things in inferior condition. Now (or soon) they will have choice again. Talk to your seller about the importance of paint, carpet, landscaping, decluttering maybe even staging. Get the house as show ready as you can. Explore the NextHome prep program if NextMortgage is in your state already. Or think about lending them the money for “get ready” as part of your service. Just know buyers don’t have vision (in general) so the more you can have it show ready the better.

3. Explore motivation. I talked about this a bit yesterday but this is hyper critical in this market. Why. Are. They. Selling? Dig in there. Be lovingly open to having the conversation “What would you do if you didn’t sell?”. Be ok if that is the result. Some people maybe should wait. Advise them. Consult them. Advocate for them. Be a fiduciary for them. That is the job. Make sure you’re helping them explore all their options and help define their motivation. 

Also we have to think inside and outside the box when it comes to price. 

Inside the box

Pre negotiate a price reduction. “We can try it at your price for one week but if we don’t have significant activity we’re switching to mine. That “Dangers of overpricing” slide should be your gospel. You should talk about it, teach it, think about it all the time. Help them understand and reframe it this way “When you go look at a house… and its been on the market 65 days what do you think?” They always say “What is wrong with that house?” You say “Exactly! I don’t want buyers thinking about your house that way”.

Practice the price discussion. A lot. Like a lot a lot. Like daily if you have to. Get with people in your office and practice. Get with people outside your office and practice. Ask past clients if you can swing by their house and practice. They get a great CMA, you get to practice and look like a pro in front of your past clients. Wherever/however practice your price discussion.

Outside the box

Hire a 3rd party expert to solve price debate. You hire home inspectors because they’re better at that than you. You hire transaction coordinators because they’re better at that than you. Why not talk to an appraiser about an “opinion of price” and if you can’t agree on price with your seller then you pay an appraiser to give you an “opinion of price” and get the seller to agree that you’ll both work with that number initially.

Keith