As a listing agent, one of the toughest jobs is to come up with the correct listing price. My team goes above and beyond to get our clients homes sold quickly and for top dollar. How do we do it? Take a look at an email exchange from a listing that our team just landed:
SOLD!! (pun intended!! :))
Thank you for the very informative and thorough email! We're ready to proceed w/ you over all the other realtors we interviewed -- just let us know what the next step is!!
Thanks again,
Lisa
Hello Kevin & Lisa -
We really enjoyed meeting both of you today. You had great questions and concerns.
Lisa, since we spoke this afternoon, I've been thinking about your question about pricing and the strategies involved in selling your home.
First let me say that, "most" realtors want to price homes in the "mid to low" range so that they can look good when they get offers right off the bat. What I have found is that sellers tend to think after that happens, "Oh shoot, we should have asked more!" Then they get angry at their realtors for pricing it too low! "Most" realtors do the 3 P's of selling real estate: 1) PUT a sign in the yard, 2) PUT it in the MLS and 3) PRAY that someone else sells it! "Most" realtors are simply not trained very well. "Most" realtors tend to look for the next commission rather than how to serve their clients with the best fiduciary duty possible and without the intent of receiving referrals. They tend to be too busy or stretched too thin to handle selling homes in an efficient, effective or profitable manner. "Most" cannot afford to market properties effectively. It's very expensive AND time consuming.
Pricing homes (whether buying or selling) is as much an ART as it is a SCIENCE. "Most" agents only look at what has recently sold and then they multiply out the square footage by the price per sq. ft. and poof - there is their price. There are so many more things that our team looks at when considering a listing strategy:
1) What did other homes in my neighborhood sell for?
 A |
 |
|
3,729 | 116.65 | 435,000 | 117.99 / 116.65 | 93 |
| B |
 |
|
3,603 | 134.61 | 485,000 | 138.75 / 134.61 | 43 |
| C |
 |
|
3,599 | 126.42 | 455,000 | 131.95 / 126.42 | 109 |
| D |
 |
|
3,281 | 131.04 | 429,950 | 137.15 / 131.04 | 59 |
| E |
 |
|
2,231 | 156.88 | 350,000 | 156.84 / 156.88 | 4 |
2) What are the differences between those homes and your home?
Home "A" above: listed at $133.82/sq ft. - sold $116.65/sq. ft. 2 stories are usually (but not always) less desirable than single level homes. They are certainly cheaper to construct. This home had granite in the kitchen, beautiful pool. It showed nicely - especially because of the flowers (cheap) that were adorning the landscaping. It was a traditional sale - not sure why it took 93 days to sell at such a low price - although it was several months ago and our market has been trending up since then. I'm guessing that the sellers needed out quickly. It was priced at 499,000 - which lost all the people who may have looked at it if they would have been searching for $500,000+.
Home "B" above: It was priced at 499,900 - which lost all the people who may have looked at it if they would have been searching for $500,000+. It is a single story home with nice finishes (pretty comparable to yours), but does not have a pool. Simple gravel backyard - which will probably require money to upgrade the yard - unless that's what attracted the buyer.
Home "C" above: ditto to #7 above - 3 different realtors all pricing $499k - I have proven with my success and my dual agency ratio that that is really dumb. This home had some crazy angles cutting rooms in choppy sections. (Side note: I'm worried about the layout of yours where you have to walk thru the living room - that could be a negative).
Home "D" above: home is probably 20% less in quality inside, but the backyard is quite beautiful. Oversized lot. Originally priced at $459k.
Home "E" above: home is 1/2 as big so the lot seems very large because of that. The paint colors are hideous - so I honestly don't know how they got $156.88/sf out of it unless that buyer a) loved the neighborhood and could ride the shirttails of the larger homes, b) if the buyer liked the large trees that lined the walkway up to the front door, c) buyer probably loved the size of the lot.
3) What is the market trend? Is it going up/down? By how much?
When we analyze the number of New Listings, New Contracts and Closed Sales, it's good and bad news. We won't take too much time discussing this - the fact is that the number of listings is considerably lower than what we have had over the last 10 years. That means that your competition to sell is significantly lower. It's easier to get offers; however there are far fewer buyers this year than last. So our goal is to get you the best offer, and negotiate the best contract possible and then continue to work it to a successful close of escrow.
4) How many homes are on the market?
In your neighborhood - 3 homes are available - not counting the $2m property. 6 homes are available in gated communities in your zip code outside of your neighborhood between 3000-4000 sq. ft. The median Sold Price has gone from $250k to $325k in the last 3 months. But look at the number of new contracts from a year ago - they are down significantly. In my opinion, the difference has been in the number of out of state or out of country buyers has gone down dramatically this last year. Perhaps because they were here investing and purchasing when we were at all time lows - and now that we have had increases as much as 29%, there are a lot fewer buyers. We are witnessing that by only 1-5 offers per property instead of 30-40 offers that we were getting a year ago on our listings. I suppose that is a result of the law of supply and demand. Sellers wanted the prices to go up, but the number of buyers has gone down as a result. That is one more reason that we need to market massively to get the number of offers up as much as possible. I believe that it is IMPORTANT TO TRY AND GET THE HIGHEST PRICE POSSIBLE IN THE SHORT TERM AND THEN REDUCE IF WE ARE SHOWING MORE THAN 10 TIMES w/ no offers or 10 DAYS with no offers. We are racing against the clock before it gets too hot, or before we are into the school season.
5) What are the homes that are for sale priced at in your neighborhood?
$439,500 - 2,995 sq. ft, $146.74 sq. ft
$475,000 - 3,212 sq. ft, $147.88 sq. ft
$399,900 - 2,973 sq. ft, $134.51 sq. ft
6) So how do we justify listing at $600,000?
We are in an Olympic race and our competitors in the race are in much smaller homes. If we list at $151.48 - it calculates to $600,000. If we use the $147.88 like the listings above, it would be a $585,752 sales price. Like I said a few times today, this isn't about what "I" want to list it at. It's about me educating you and then we decide together what to list it at. I suggest we list at $600,000 for 7-10 days, and then lower to $585,000 (like your competition per sq. ft) if necessary.
6) Of the homes that have been sold or those that are listed, how many days have the homes been on the market?
(See the righthand column above).
7) What time of year am I going to be most successful at selling?
(see blue and purple chart above) - historically - it goes down over the summer in AZ - so we need to rush.
8) How do interest rates affect the price of my home?
Even though buyers are not happy that the prices are going up, they are still buying because the interest rates are at historically low prices - they dipped below 3% two weeks ago. I think you too ought to hurry and sell and take advantage of the low interest rates - who knows when they will start jumping up.
9) Because 92 % of all home buyers search on the internet, what do we need to do to bee seen on the internet? And, how do we entice people to come look?
As we discussed, we market massively on the internet and we post on craigslist approximately every 48 hours from multiple accounts. We also market to neighbors and we do open houses galore - based on your schedules and availability.
10) How do we price it so we get the most "looks" on the internet and the most visits to the home from those looks?
Although not a must, we have found it to be very wise to list at an incremental price that people will look at in search criteria on the internet. ex: If we price it at $600k, you will get all those people looking from $500 - $600 AND all those looking for $600 - $700k! Would I rather price it at $500,000 than $600,000? YES! It would be so much easier to sell! It all depends on how much cash you two are willing to spend/lose to close the deal.
11) Am I better off to price low and get people to bid up, or price high (knowing that we can still get it bid up OR that buyers are typically offering considerably lower)?
It depends on what you can afford to do.
12) What do we do if the comps are in the $135/sq ft range (sales prices of prior homes) instead of what we get an offer for/or list it at?
Those are some of the things we will discuss with each other when we get an offer or offers. We need to look at the pro's and cons of the offers - whether they are conventional with 5%, 10% or 20% or more down or whether they are cash. We will find out what the cash position of the buyers is and determine how to negotiate it when we get to that point. Keep in mind, that we will do everything we can to get the appraiser to look at and consider the same things above we have discussed. You may have to make some concessions depending on the cash position of the buyer and willingness of buyer to pay over market value. We have to jump on the bus and see where it takes us.
We need to do everything we can do to NOT get you into a short sale situation. My team has successfully negotiated over 300 short sales, so I'm not worried about that, I'm just worried about the time and expense for you if we get down in that range. Not everyone can qualify for a short sale. My team believes that we should do everything possible to help you not short sale if possible.
I'm glad you got to meet our buyers agent today as well. Now that you have signed a "Buyer Broker Agreement" with our team, we're off to the races to help you find, negotiate and close on your next dream home. We will work simultaneously with you in the sale and purchase of your home(s) to make it as smooth and painless as possible.
Keep in mind that when we represent you as a buyer, we have an extensive list of 34 strategies of how to get your offer accepted and we specialize in negotiations. For our sellers, we concentrate on getting you the most money. For our buyers, we are unlike "most" realtors. We are not trying to get our buyers to offer the most so we can get the most commission, we are working on behalf of our clients and working for our clients interests. We work for referrals and not just for commissions. We concentrate on methods and strategies to get the home for the best price and to get our offers accepted, and then we negotiate our way thru inspections until close of escrow. It's not easy in this economy! In fact, many agents are simply falling out of the business because it is so hard.
The way we have been so successful is by thinking outside the box and going above and beyond what the typical realtors do. I've been in real estate developing high end subdivisions or luxury homes since 1998 and I've been selling real estate for Keller Williams since 2009 and each year I have been in the top 2% of all all realtors in our MLS system (43,000 last year - 29,000 this year).
Think of this: If you had cancer, would you go to a family doctor because it would be cheaper? If you needed legal representation, would you go to the cheapest guy on the block and pray for luck or would you find the best guy that specializes in your issues so you would win?
Simple enough right? Hire the right person/team for the job and you will get results.
After you have had time to read and digest this information, let's discuss what price YOU would like to list it at.
We are here to help you.
Kindest regards,
Shanna
Shanna Day, REALTOR, Mega Team Leader/Rainmaker
Shanna Day's Team, PLLC
ARIZONA:
Keller Williams Realty East Valley
480-415-7616 - cell
info@ShannaDay.com
http://www.FindAZHomesFast.com
UTAH
Keller Williams Salt Lake City
801-251-6416 - cell
ShannaDay@kw.com
http://www.FindUTHomesFast.com
How do you come up with your listing price?
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