Pricing It Right--Objectivity is Crucial
With an incredible supply of homes for sale in today's Buyer's Market, it is crucial to position your home to sell in the shortest amount of time possible, bringing the best price possible. Begin by looking at your home through the eyes of a potential buyer.
There are five basic factors that ultimately determine whether a home is going to sell, or simply be one of many homes on the market with very few showings and no offers:
Buyers have many choices in today’s market. In order for a seller to maximize the selling price of a home, the home must be “Showroom Ready” and priced right! PRICE is determined by: CONDITION, LOCATION, SIZE, and FEATURES. A home that can rate a score of 10 in CONDITION, LOCATION, SIZE, and FEATURES can be more aggressively priced compared to a home that is deficient in any of the categories.
A seller CAN control CONDITION, FEATURES, and PRICE. LOCATION and SIZE are not features that a seller can control. So, let me show you how being objective in your VALUE rating... There are currently 25,657 condos, townhomes and single family homes on the market, and over the past three months only 5,176 homes have sold. To add your home to the 5,176 homes that have sold in the last three months, your home must be Valued as a 10 in: CONDITION, LOCATION, SIZE, FEATURES, and that will allow a 10 in PRICE. If your home is not rated a 10 in all these categories, then your PRICE will need to be adjusted for these deficiencies--again, remember location and size cannot be controlled so, adjust accordingly.
The Pond - Where is YOUR home in the pond?
The flow of sales activity in any real estate market is comprised of three categories of the homes that are currently on the market:
1. Homes that FLOW. Homes that are considered to be the best Value and Price flow into the market, leave the market SOLD in less than 45 days. 2. Homes that SHOW. Homes that are deficient in Value and/or Price may be shown, but they are not receiving any offers. Adjustments must be made in the areas that you DO have control - PRICE, Condition or Features in order to get the listing sold. Ask yourself where you want to position your house in this competitive Buyer’s market. Remember, any deficiency in the five categories of: CONDITION, LOCATION, SIZE, FEATURES or PRICE will remove your listing from the “Flow” of the market and place it in the “Show but no offer” category or worst yet, in the “Stagnant Mass” with no showings.
Here's a recent Market Absorption Trend which is another evaluation tool to use when listing your property: If positioned properly, your home will “Flow” right off the market! It will attract a buyer.
3. Homes that become the STAGNANT MASS. Homes that are greatly deficient in both Value and Price do not even attract showings. There is virtually no activity, and these listings will simply never sell. 
The Pond graphic courtesy of Zan Monroe, CRS Senior Instructor and NINJA coach: www.ZanMonroe.com
Thanks for the blog. I learn a lot of new information from Active Rain blogs. Best Regards
Hi Debe, Excellent review and graphic of this market and pricing. Still like the idea of putting a potential seller in the car and previewing the competition prior to listing. Have a pleasasnt Sunday !
Thanks
What do you have to sell..what is the timing, motivation are the first step that graduates in to what are buyers purchasing, how many other frogs like yours in the pond you speak of. Great detailed post that took way way more than 5 minutes to tap out. Good job and effort!
Debe, LOL, love the stagnant mass category! Ohh what a graphic to show a seller!
Debe loved the pond analogy that is a great listing tool for future or present sellers.
Debe: Great post. How can I send this to a seller that I'm working with? Oh this web we weave ourselves into!
Thoughtful post...you said it all, and very well, indeed! Thank you.
Debe,
Great analysis and detail in this post. When the sellers get this, it will indeed flow right out the door. No one really wants to be the stagnant mass at the bottom of the pond.
All the best, Michelle
Debe ---- once again, you have written an awesome post -- I love the pond analysis -- this is an excellent post to use in training new agents on obtaining and pricing listings. Thanks.
Debe, If we could figure out a way to bottle objectivity...we could sell that and the properties would take care of themselves. But I'm afraid there is little chance the average seller is going to size up their place against others...with out the dreaded thoughts "But we paid X for it when" come in to all conversations.
Debe, Love your pond analogy. Now if only we can get our sellers to view themselves realistically, none of them would be the sludge at the bottom of the pond
Great post Debe. Love the dead fish bones at the bottom of the pond :)
Debe, another great post, I love the idea of touring with the potential seller beforehand, I will steal that. I have often said a Realtor is not "seasoned" until they understand that they need to walk away from some potential clients, as in those that want to list their house at a ridiculous price, Thanks
Debe-terrific post. In our area we are low on inventory and houses are flying off the market (again). I firmly believe in pricing homes correctly and if you do a lot of problems can be avoided. Listed a home today for slightly below the appraisal and it was under contract in less than 24 hours.
What an awesome post and a lot of useful information. Thank you ma'am/
This is great information to go into my new listing presentation. Thanks, Debe.
Debe - This is a powerful graphic that I will use from now on in my listing presentations. Wow! That's all I can say. I've been thinking about how to explain this concept to my clients and you've done it. Thank you!
Very informative post. This is amazing work, and very well done. Your momma should be proud!! I bookmarked and will revisit often. Thanks.
Debe, You do such an incredible job on your blogs. Thank you so much for sharing your knowledge with everyone. I'm anxious to get my Facebook page looking as good as yours!
Nancy
Explaining to sellers that the many many choices are what demands that the home is taken to the best point it can go....the shiniest penny.... at the best price and it will be picked up quickly !
Debe, very well presented. I've used this flow analogy before, but I like breaking down the pricing into simple easy to understand categories.
Love the "Flow" graphic and the idea behind it.
Debe...outstanding about how you simplified this for the buyer and the seller...location still remains key...good points for the seller and understanding stagnant inventory...well-done...Cherise
I have flagged this one for feature! I have been encouraging my buyers to fish VERY deep in the pond since we turned into a seller's market in April/May!
Debe, excellent analogy on pricing. It's true and I wish sellers would take our advice. I also recently did a post on the 'Absorption Rate' and tried to throw some humor into the mix. Can't have all those boring graphs and numbers only. You've done a great job.
Excellent post Debe, and so insightful. You hit the nail on the head in everyone's market!! Love your graphic - there's no misunderstanding the value of pricing!
Debe, Excellent information and beautiful presentation.
Hi Everyone! Thank you so much for your comments! I have been a bit slammed since I posted this--sorry I had to DASH!
The pond graphic is very powerful in a presentation! Taking them to preview the homes is quite helpful too--it truly opens up the eyes of the sellers.
Have a wonderful day everyone!
Excellent post, Debe as always! I love the pond analysis. Thanks!
Congratulations on being a featured member of ActiveRain! Well deserved and great choice!
Debe,
Excellent post and not only for the consumers but for real estate professionals. Very simple way to present an important point.
Pricing right is critically important, and you show why.
Excellent post Debe. I too like the pond graphics...
Helping you help others live their American dream...
Love the pond graphis-great job as usual!
Great info. I do like the graphic. Famous last words..in my opinion I am being objective!
You will not get a second chance to make a good first impression. This includes price and condition.
Great post. Love the chart.
You get a gold star on this one! I think it is an excellent visual and learning tool for seller to PRICE IT RIGHT! chasing the market only gets you to the bottom of the "pond" !
Ha ! priceless guide for listing agents !! Well done Big Sis !!!!