Professional Development for Real Estate Agents: Setting an Appropriate Listing Price
First, get yourself ready for the appointment.
The impression you make on the seller is established long before you set foot on the property. I’ll try to explain. You should demonstrate to the seller (rather than tell them) that you are a severe and well-prepared buyer. Your leadership and authority will shine through. When people respect what you have to say and what you’re doing, they appreciate being guided through the decision-making process. This is the first step in building trust between you and another person. Customers are likelier to do business with someone they know, like, and trust. What, then, shall we do? Ask thoughtful questions when you first schedule the consultation. Asking the customer questions about their needs and circumstances demonstrates interest in them and helps establish trust. Here are a few illustrations:
How would you describe the ideal Agent?
Please share your history of shopping for and using
selling (if they’ve ever been sellers)?
-What are the top three factors that will make or break the sale?
The questions you ask will reveal your level of expertise (which has nothing to do with how long you’ve been in the industry). Next, confirm the meeting time and date by sending a letter (and an email, if possible). Your confirmation of the appointment should come with a pre-sell packet. Include anything in this packet that will “pre-sell” you and your business to the client. The client should feel they’ve had a chance to get to know you through the packet before meeting you. Last but not least, confirm by calling the day before. Away you go now.
The next step is to inform the client why you are their best option.
It would be best to inform the seller why you are the best possible realtor to advertise their home at this time. The goal here is to differentiate between demonstrating value. Depending on your level of expertise, you may either directly or indirectly reference your company’s numbers in your discussion. The only thing that matters to the merchant is believing what you’re saying. Spend some time outlining not only the achievements you and your company have made but also the following:
-how many customers you bring in and how you bring them in
-the number of satisfied customers you’ve helped as a buyer’s agent
-how many people do you bring in who end up purchasing your listings
Your strategy for getting other brokers to show your listings
Ultimately, the seller cares about whether or not you can attract purchasers to their property.
Third, inform the seller of the state of the market and your forecasts for its future performance.
It would be best if you made people think you are an expert in all things related to real estate. Real estate agents typically skip this phase believing that the seller is aware of what is happening. The potential cost of this assumption will become apparent in the body of the presentation. Discuss market tendencies and provide evidence to back up your claims. The Multiple Listing Service (MLS), your local newspaper, and articles written by real estate experts are all excellent examples of this type of material. Always bring up:
the ratio of retail to suggested retail price
-The number of unsold listings (those that have expired, been removed, or been canceled)
-the total number of competing listings currently on the market.
-the purchaser’s anticipations (regarding money spent on closing, price haggling, etc.)
-typical forms of funding used to acquire the subject
Fourth, specify your method for determining the asking price of a home.
The term “Market Value” is generally frowned upon by sellers. Thus, it’s best to avoid using it. Put off making the CMA for now. You must complete the seller realize that neither you nor the buyer has any say over the final price. The price of a good or service is always agreed upon between the buyer and the seller. Recent closed comparable sales are used as proof. Completing a transaction shows that the buyer and seller have decided on the property’s price. Closed comparables are an excellent resource for setting a fair price. However, comparables might be deceiving if the market in your area is trending strongly up or down. The seller should be aware that the price they settle on will need constant evaluation to ensure it is fair. This is calculated by inference. The asking price is likely incorrect if there has been a shortage of interest, inquiries, showings, offers, and accepting offers. Depending on the state of your market, this could take anywhere from two weeks to two months. There are four states of being busy:
A) There have been no viewings.
Exhibits and lowball bids (C)
Displays and accepted offers (D).
You are currently just enlightening the vendor about the many possibilities. Don’t be too specific about the price just yet.
Fifth, discuss payment terms with the vendor. Since the seller will be footing the bill, it is OK to broach the subject.
Ensure the seller knows your commission is based on a share of the final sale price. Your goal in being so explicit is to head off any potential rebuttals to the fair price you offer (which will likely be less than the seller hopes for). In practice, the less you charge, the less money you make. It was standard practice for me to joke with the seller that I hoped the property was worth significantly more than it was.
Step 6: Inform the seller about “suspect” methods some real estate agents use to get listings.
Don’t step on any cracks! You should not publicly accuse specific agents or businesses for fear of damaging our industry and your reputation. So, use broad strokes without fear of being too vague. Here are a few examples:
Agents will again list at the seller’s asking price, elevating the seller to “expert.”
-To gain additional listings, some agents may list above market value only to get their sign in the yard.
Agents will set the asking price too high to negotiate a lower one.
Ahead of the seller’s cancellation decision.
Real estate agents will often make up a buyer for a house that doesn’t exist to make a sale.
Because it is their only incentive, agents would cut commissions to attract
This is a zero-sum game for both the buyer and the seller. Because the vendor
does not have to pay a commission unless the property is sold. A 1% cut is possible for the agent.
However, if it doesn’t sell, it’s just a trick.
-Brokers will guarantee sellers a higher price. Yet again, I must inquire as to how. The
Buyers (with the help of their advisors) will settle on an offer price.
Agency), and the seller must also consent.
Agents claim they are experts in their field since they have the greatest
Listings. In actuality, their inventory of unsold homes is always the largest. Brokers boast that they can move properties more quickly. How I ask once more.
Is it possible for them to magically conjure up a buyer? Not in my opinion.
Agents who utilize the strategies above take advantage of the seller’s naivete. Remember that it is your fault if the seller falls for one of these hostile sales techniques since you failed to make the consequences of their conduct obvious. If you list with the wrong agent or set the price too high, you’ll delay the inevitable price drop. Furthermore, the seller will have paid another mortgage payment (or possibly more) and not sold their home.
Seventh, give a talk about the CMA and the financial report.
If you have done an excellent job with stages 1-6, the seller will be more amenable to working with you and will have a better grasp of how to price the property. One piece of advice: rather than saying, “I think the price should be..,” says, “The market is showing us the price should be…” The market determines the price, not us.
In Step 8, you shouldn’t move further with the presentation if you haven’t settled on a listing price by this point.
This is a crucial stage. If you go on, you’ll have to overcome this difficulty as the cost of doing so. After exhausting all avenues of persuasion, including using facts and logic to convince the seller, you should leave. It’s not easy, but you’ll feel better about yourself once you’ve accomplished it. You won’t have to waste time and energy every week pleading with an unrealistic seller to lower their asking price immediately. The bright side is that you can finally unwind or use that extra time searching for even more eager vendors.
After settling on a price, it’s time to start talking about how to get the word out about the home and get the seller to sign a listing. As brokers, we need to appreciate that the sellers’ desire to maximize their profit is natural and understandable. It is our responsibility to teach children using just facts and reason. Remember that the pricing discussion is the most crucial aspect of the listing presentation, and you will get the listing for the right price if the seller likes and understands you.
Daryl Rouse has worked as a realtor for over two decades. He is in the top one percent of the United States. His successes become even more remarkable when you consider his humble beginnings and the obstacles he had to overcome. In some months, Daryl sold more than 30 homes and listed more than 40. His reliability attests to the effectiveness of tried and true methods. His guiding principle is to always prioritize the needs of his customers by streamlining processes whenever possible. Whether you’re a seasoned agent or just starting, you can follow in all of Daryl’s footsteps. Daryl began his coaching and training business, Peak Performance Quest, in 1993. He has conducted more than a thousand seminars online. Daryl bases all he teaches on his personal experience. He admits that his first year in business was a complete failure, during which he averaged six hours of daily prospecting but made only two sales. The typical agent can identify, Daryl says. The good news is that things improved dramatically in year 2. To learn more about coaching and training,
Read also: The way to get More Listings