It is time to tell you that there is one essential ingredient when it comes to marketing a house.
Back when they first sent me to real estate agent boot camp in the days of telephone cold-calling, the sales gurus talked about condition, location, motivation and pricing before we were shown the Criss-Cross directory and told to make 50 calls.
Every “No” is a step closer to a “Yes”, Floyd barked at us.
The telephone bit wasn’t my style, but, I learned some golden nuggets during that old-school training. Understanding how to market a house is essential today especially with super informed home buyers who often have more data than their agent. You know what I am talking about because you have probably looked at the “comps” before looking at any home.
The interesting x-factor is that every home is unique (even in a Toll Brothers Community) determined by the particular lot and refined by the individual home owner.
Some home owners suck at maintaining a home — and some are amazing.
The problem is that home buyers who are looking at the “comps” miss that subtle differentiation because they are so focused on the numbers. And here is a new problem: so are many of the agents. Looking at the comps, some agents are recommending to their clients to price just below the market to capture home buyers who are looking for a deal… assuming that they will bid-up the deal-of-the-week.
Last week I saw this strategy backfire on an agent in a community where I was marketing a home. I had changed the status to “Under Contract”, and about two hours later she left me a panicky voice mail about her new listing and her possible need to “modify her pricing”… (up).
Leaving cash on the table
To undercut my clients, she recommended her clients price their home $25,000 less than my client’s. In her defense based on the comps, it looked like a reasonable price. But the strategy was flawed because the current market was much more active than the previous few months. National real estate sites like Zillow can give you give you good insight into past activity, but they aren’t good at showing you what’s been going on in your market over the last two weeks.
When I told her that she was priced too low, she responded that they hoped to get it “bid up by eager buyers”. The reality was that she didn’t expect me to help my clients be successful.
So, do today’s buyers like to be “gamed” like that?
Over the years I have seen this strategy actually work in all price ranges. Getting a buyer’s interest is essential, but if you are a home seller with a superior home in an active real estate market then you have to at least try to get the market value of your home.
If you don’t want your money, then donate it to Habitat for Humanity
The essential ingredient when deciding how to market a house is determining the right price for today’s market. Too high and the buyers walk, and if it’s too low then the seller leaves money on the table.
Yes, homes still need to get appraised. Yes, some agents will over-price listing.
But, all home sellers should know that establishing a realistic asking price is the essential element in how to market a house. After that, the market will determine the real value.