Be A Better Agent

TIPS FOR PRICING A HOME

Posted on 12/21/2021 by Greg Eckler

Pricing a home might be considered one of our primary duties as a real estate agent. Here are some examples of when pricing is important and how to prep for each step:  

CLIENTS

This is the most obvious on the list. Clients rely on us to look at a home and determine a price for marketing, or determine if a listed price is too high, too low or just right.  

  • Buyers
    • When determining the best offer price for a home, we start with someone else’s opinion (the seller) and see if we are able to gather enough information to agree or disagree and convey that information to our buyers who will decide on the best offer price. When presenting an offer, if we can explain our price and back it up with data, we have a better chance of being heard and understood as the negotiations progress.  
  • Sellers
    • Determining the best price for a seller can be a little harder. In this scenario, we aren’t reacting to someone else’s price. We are looking at sales history to come up with a price that others will react to. The more we can support our price, the more information we can present to a buyer’s agent to help guide them in making an offer that the seller will accept.  

CO-OP AGENTS

The first step in negotiation is to let other agents know there was valid logic to determining the price. The goal here is to provide information in a way that convinces the other agent we are correct, and we can get them on board with our price so their client can also get on board with accepting our price.

APPRAISERS

There are several factors that go into communication with an appraiser. The following are recommendations for helping to improve that communication so the closing goes smoother for your client:  

  • Help the Appraiser
    • This is simple. Appraisers have a big job and their paychecks seem to get smaller every year. Providing comparable properties and support for our price is just helping them do their job and a great way to partner with other professionals in our industry.
  • Be Realistic
    • If we made it far enough to have an appraisal, then we have a contract, and are most likely past inspection. When presenting information to an appraiser, give them realistic information. They are not dumb and can see past those “stretch” homes that could easily justify our price. Give them some comps that are similar in price, but also give them comps that are higher but need to be adjusted down as well as comps that are lower and need to be adjusted up to properly match the subject property.  
  • Implied Potential of a Dispute
    • When the appraiser is asked to value a property, there has typically been a buyer, seller and in most cases 2 agents all agreeing to a price. When you send comparable data to an appraiser, you’ll want them to see the effort you’ve taken, and the intelligence you have put into the process in combination with the other agent and buyer/seller. In the most subtle way, you’ll want the appraiser to realize if they come in low on the value, they will be getting pushback. This implied “potential” of a dispute will hopefully be enough for them to 2nd guess any attempt to submit an appraisal below the contract price. This is never stated or even implied, you’re just hoping they make the connection between your efforts and your price, and thus see things your way.

Taking the above steps has been a proven method for reducing the risk of an appraisal coming in below the contract price for agents at CHR. In the end, our job is to provide an expert opinion and be able to communicate that opinion with others. The more skilled we are in this process, the more successful we will be. 

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