What top real estate agents do differently when pricing your home
Most sellers think pricing a home is simple enough – get a few homes that have sold in the area recently, tack on a little cushion for negotiation, and call it a day. But that’s not true – doing this leaves thousands of dollars on the table. Or, it prices the home so high that it sits on the market for months, becomes stale, and sells for much lower than it ever would have.
The agents who consistently get top dollar for their clients are doing something entirely different. It’s not magic. It’s not experience. It’s a process for pricing with an eye toward things that most fail to consider.
They actually pay attention to the market (not the market last month)
An average agent will pull comparable homes sold in the last six months, take a few notes, and call it research. A great agent knows that data from even thirty days ago may not even be relevant.
Real estate is an industry that relies heavily on changing variables – interest rates fluctuate, supply and demand shift, and agents note buyer behavior based on these findings. What sold in February may be irrelevant as to what buyers are willing to pay in April. The best of the best pay attention to active listings and pending sales in real time, taking careful notes of how long homes are on the market before going pending – which often shows how great they were priced – and paying attention to price reductions along the way.
This makes more of a difference than most sellers realize. If the market slows down but an agent is still pricing based on January numbers when things were hot, that means a home is overvalued from day one. By the time a seller recognizes the error and drops the price, the home has been on for too long already. Buyers start to wonder what’s wrong with it.
They think outside the box of comps
It’s easy to pull three homes within a mile of each other, same square footage, and call them comparable to the subject property. That’s where agents get lazy.
An excellent agent digs deeper. They look for lot size differences, layout functionality issues or advantages, levels of condition and updates, even elements that most agents wouldn’t note like if it backs to a busy street or has a poorly photographed floor plan. Two homes can be 1500 square feet and in the same neighborhood, but one may be worth $50,000 more than the other based solely on these nuances.
They’re also factoring if those comparable sales were typical or outliers. Did one go up so high because two competing families drove the price up? Did one go down because the seller had to move for a job? The best agents are dispassionate about what doesn’t represent market realities.
They consider quality of marketing as part of pricing strategy
It’s here that many people don’t realize how much agents impact the price of a home. A poorly marketed home will sell for much less than the same property with good photos, staging and ad copies.
The best South Bend realtors professionals factor this in. They know that real estate photos matter and staging recommendations guide sellers to make their home market-ready. They also know that their ability to market properly adds enough value to bring a home into a new price tier.
For example, Top real estate agents in Cincinnati know that they’ll get great results by providing great marketing. The right price paired with the right marketing creates buyer competition; leaving a home untended and priced lower means even owner-occupant buyers will bypass it when they see how poorly it’s been marketed.
An average agent would price lower because they know they won’t market well. A good agent prices right because they are confident in their marketing abilities.
They recognize psychology of buyers surrounding price
There’s a sweet spot when it comes to pricing that sellers inevitably miss. They price too high, therefore they don’t show up in buyer results (most buyers search in rounded numbers, not numbers with decimal places). They price too low, and buyers question what’s wrong with it.
Experienced agents know psychological triggers like these. Even though it’s only $6,000, $449,000 presents itself differently than $455,000 because they’ll cut off prospective buyers from entering a search at $450,000 but happy to entertain $449,000 only because they see “value.” Also, an effective agent knows that pricing at $450,000 includes a much wider pool of buyers than if it’s $500,000; however for those looking to find a home for below price, they might be quick to jump at $475,000 when they’ve eliminated any homes above $500K.
They also know that “testing the waters” is ineffective. Sellers may want to see if they can get $600K and drop it later if nobody bites. But that’s ineffective because a home gets the maximum exposure when it’s first listed; if it’s overpriced in those two weeks, bona-fide buyers who would have taken action have already passed by. When those buyers finally get to $575K after two months of waiting out every open house to confirm nothing’s wrong with the home (which has started to look stale), the good ones have already found another place.
They take days on market into account as part of pricing assessment
Mediocre agents only think about price. Smart agents think about time and price together. A home priced at $500K after 90 days often sells for less than one priced at $485K that goes under contract within ten days.
Why? Because buyer psychology comes into play. A fresh listing creates excitement. Stale listings come with low-balling efforts because buyers question what may be wrong with it after it’s sat there long enough – maybe it needs so many repairs that they’re able to overlook minor issues to justify their much lower offer while securing it for themselves.
And it’s not fair to sellers to keep them priced high if it’s going to sit there. Top agents push homes through quickly – even within 30 days – to generate buyer competition; getting buyers engaged in a potential bidding war is better than ego-stroking sellers who want to see if anyone will bite at an arbitrary number.
They consider condition and timing
Not every house should be treated as if it’s similar for pricing purposes even if they are similar. A house in good condition may command premium pricing. A house in poor condition needs premium pricing only when factoring time and effort related costs – but not as high as what renovations would cost because many buyers want turn-key properties today more than ever.
Skilled professionals also consider timing – if a property goes on sale in December when no one is buying or going up against other properties in May, it needs to be priced lower regardless because competition will be abundant against properties listed earlier in the year.
They’re also honest about which updates add value; many sellers think their updated kitchen can bump purchase price by $40K when it should/shouldn’t based upon whether those updates are what buyers in that range want or if those updated kitchens are still outdated relative to comparable homes in the area.
They use data but don’t rely on it exclusively
Interestingly enough, best experts use everything from automated valuation models to MLS analytics and market trend reports – but they don’t let those tools decide for them.
They know there are things that cannot be valued – a sense of light in a living room, the amazing backyard that doesn’t photograph well but should wow buyers in person; or a quirky layout where some buyers may love it or hate it – which impacts value but needs empirical consideration first.
An algorithm will tell them what something is worth hypothetically; their experience tells them what it will sell for given circumstances with real buyers.
Bottom line about pricing
There’s a distinct difference between an average agent and a top performer – in addition to some proper marketing skills – it’s what they do differently with pricing strategy. It’s not about overpricing or underpricing – it’s about doing one’s homework and creating a sense of value before opening it up to others.
Agents who consistently see their clients gain the most value do so because they know why they’ve planned well; getting pricing right essentially sets up everything else for positive gain afterward – from serious buyers wanting the immediate gratification of making an offer quickly since their ideal budget has been met – to stressing sellers into believing they won’t get what they want unless it’s above anticipated asking price; it all levels up.
A few thousand dollars isn’t worth cutting corners on when there’s so much more possible later on down the line if people listen!
