Pricing Illustrator, Word



7300 Metro Boulevard, Suite 120Minneapolis, Minnesota 55439952-835-4477david@ ? Get the Listing...Priced RightIntroduction: Five Sections of the Seminar1. The Role of a Real Estate Agent2. Establishing Value3. External Influences4. Advantages of Proper Pricing5. Effects of OverpricingSection A: The Role of a Real Estate AgentA1. Steps of the Listing ProcessPreparation and researchEstablish seller objectivesExamine the marketing planSelect a real estate agentEstablish asking priceExplain the purpose, elements and sequence of the meetingEstablishing an asking price only after they have selected an agentA2. How Will You Select a Real Estate Agent?[ ] Best services and marketing plan[ ] Highest listing priceGreatest mistake homeowners make is to select the agent who will overprice the mostAn agent does not control the marketA3. Avoid This Common MistakeChoosing the highest listing priceWith the agent least competent to get itA4. The Role of a Real Estate Agent in PricingOwners believe your only role is to determine the priceExplain that your primary role is marketing their homeAn agent’s opinion of value doesn’t matterThey must make the pricing decision based on the marketThere is no "exact price" for real estate.What I think your home is "worth" doesn't matter.The market determines valueTogether we determine the price.I will show you a range of prices being paid for homes in your area.A5. Who Controls What?The five factors affecting the sale of a homeOnly one is in the agent’s controlFactorControlLocationGivenFinancingGivenMarketingAgentConditionOwnerPriceOwnerA6. The Pricing StorybookLost listing to overpricingYour CMAOriginal list priceSuccessive price reductionsFinal sale price“Do you want to Sell or be another chapter in this book?Section B: Establishing ValueB1. Principles of Evaluation“We've got a lot of money in our home”Define each term and explain that the amount paid for something does not determine its valueCost: The amount paidPrice: The amount askedValue: Worth to someONEMarket Value: Appeals to many buyers and causes a sale within a reasonable timeB2. Principle of SubstitutionCost IN a property doesn't result in value OUT of a propertyB3. Value of Improvements“We’ve got a lot of money invested in our home”Key questions to ask:When were the improvements made?At that time were you planning to sell or stay?If you had known then that you were going to sell today, would you still havemade the improvements?If the improvements were removed, what percent of today's buyers would put them back and pay what you did?B4. Regression and ProgressionSurrounding properties do influence the value of your subject propertyRegression: Value of a larger home is reduce the influence of the smaller surrounding homes.Progression: Value of a smaller home is increased by the influence of larger surrounding homes.B5. Criteria that Determine ValueLocation and size account for the majority of valueAmenities contribute less to valueB6. How Buyers Determine ValueWhen you bought this home, how did you establish value?By comparing it to others for sale at the time?Buyers still determine the value of a home by comparison shoppingWhen you choose your price, you choose your competitionBuyer exercise: view the three competing homes for saleB7. The Market Determines Value CMAThree outcomes: Expireds, For Sale and SoldYou must first select the outcome you desire...then select the price accordinglyB8. Opinions of ValueEveryone has an opinion of value and a willingness to express itThe market is the only opinion that countsB9. The CMA Field TripCompetition more relevant than solds or pendingsStatistics and data lack powerPlay the game: The Price is RightTour the competing homesHave seller guess the pricesSection C: External InfluencesC1. Buyer’s Market vs. Seller’s MarketMore buyers than sellers = rising pricesMore sellers than buyers = falling prices C2. Absorption RateDynamics of market vs. value of the home.The information for this chart is available in your MLSFirst determine the total competing inventory Then compute average sales per monthDivide the current inventory by the sales per month to determine months of inventory C3. What is the Market Trend?Question the owner's perception of market directionPresent actual market data to establish the actual trendC4. Pricing Strategies for a Changing Market In a rising market, you can overprice and the market will catch upIn a flat market, a high asking price won’t be ‘saved’ by the marketIn a declining market, even a market price may be too high as prices dropC5. Buyer’s Financial RequirementsCompute the buyer’s financial requirements of ownershipShow how high buyer’s payments and required income will be...even at market valueC6. Buying Up in a Down Market Owners may actually gain if they are buying a higher priced homeThe net difference in price is higher at the top of the market than it is in a declining marketC7. Summary of influencesInternal: Location, Size, Amenities, ConditionExternal: Interest rates, New listing, Area competition, Local economy, Builder offerings, Neighbor's priceSection D: Advantages of Proper PricingD1. The benefits of moving must outweigh their desire to overpriceD2. Factors Required for a Marketable ListingPrice ? Financing ? TimeYour mission is to have all three in a favorable statusA deficiency in one element requires overcompensation in the othersD3. The Best Offers are the First OffersDemonstrate that the first offers are usually the highestUse actual MLS statistics to show percentage asking price received in your marketD4. Pinball ListingBuyers ‘bounce’ off an overpriced listing into properly priced homes insteadD5. Considerations of a Relocation OfferTransferred sellers want you to ‘beat’ the buyout offerDon’t try to beat it by too much.Bottom line: The employee is better off listing with you and pricing it reasonably.D6. Search Bracket PricingSelect a price that will appear in multiple searchesAvoid the …900 and consider round numbersSection E: Effects of OverpricingE1. “But we need the money.”Contrast the need for money against their motivation.Owners must balance their need for money against the benefits of movingE2. “They can always make an offer.”The only way a buyer can make an offer is if they see your homeBuyers search for homes within their price rangeOverpricing puts your home out of their sightThe right buyers won’t see the homeThe higher priced buyers won’t want the homeE3. Search Homes to Show by Price RangeComputer database searches are done by price range.Agents don’t determine what buyers buy, but what buyers SEEE4. “We can always come down.” (Normal Market)Show the history of an overpriced homeThe question buyers ask on every showing: “How long has it been on the market?”What do you think would’ve happened if it was priced right on the first night?E5. “We can always come down.” (Declining Market)In a falling market, price reductions may never catch the marketE6. “Couldn’t we just try it for a couple of weeks?”The majority of market activity occurs in the first few weeks on the marketE7. Activity on a ListingOnline activity vs. physical showingsDemonstrate higher showing activity in the early weeksOverpricing early misses the most motivated buyersE8. Price It Right the First TimeEarly activityHigher first offersSuccessive price reductionsE9. “We're moving to a higher priced area.”Their choice of destination did not affect the value of their homeE10. “We’ve had a higher appraisal.”Three factors determine the validity of an appraisal: TimePurposeCompsHave owners request an updated appraisal for a market sale, todayE11. “We want to test the market.”The CMA IS the test of the marketHaving it for sale is the real thingE12. Ongoing Seller CommunicationContact sellers regularlySummarize showing feedbackReturn calls and emailsNew listings at their price pointRecent sales at their price pointDiscuss price changesConsider home improvementsSell or Stay? ................
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