1. Start with a guesstimate. Before your listing presentation, have a price range in mind. A quick chat or two with your colleagues and your own understanding of the neighborhood can help you come up with an informed guesstimate.
2. Firm up with comps. A search through recent comps as you work up your competitive market analysis will help firm up the price range.
3. Look for price trends. Bring to your presentation a summary of price trends in the neighborhood. Be prepared to share it – even leave it – with the sellers. That can help ground sellers who may be reaching for pie in the sky.
4. Case the community. As you drive up to the house and walk in, size up the neighborhood and the condition of the house. How does the home visually compare with the homes around it? How will that affect the price?
5. Take the economic pulse. Review your cities general economic forecast for the next several months. If economics makes your eyes glaze over, you need keep only one key factor in mind, say economists: local employment. Local employment – not national – is the key to housing turnover in communities and an indication of how long houses stay on the market in your area. Is employment high in your community? Or has a major company just laid off a significant number of workers?
6. Are there new houses? Check out the kind and quantity of new housing construction. That could change the balance of supply and demand and give you a clue as to how long your listing will stay on the market.
7. Consider the sellers urgency. Sellers anxious to get out of Dodge may be willing to come down or even start low. Ask the sellers why they’re selling; listen to their answers and watch their body language for hints on what your follow-up questions should be.
8. Ask for a built-in price reduction up front. Get an agreement from the seller up front that if the house hasn’t sold in X weeks or months, you may lower the asking price to a preset figure.
9. Know when to say no. An unrealistic selling price can strangle the transaction or get so time consuming you don’t have a moment to develop new business. The homework you’ve done in steps 1-8 above has prepared you to make this vital call. If the sellers refuse to set a listing price you consider realistic, be prepared to walk away from the listing.
And thank you for making me Your Orange County Real Estate Connection.
Michael Caruso, Broker ABR ABRM CLHMS CRB CRS GREEN GRI
Past President, Orange County Association of Realtors (949) 753-7900