It’s no secret that real estate agents often suggest pricing a property a little higher than it may actually be worth. This is what’s called “price anchoring,” and it’s a technique used to help sellers get the most money for their home. However, sometimes sellers take this too far and price their home way above market value, thinking they can always lower the price if there’s no interest. Unfortunately, by then it’s often too late—the house has been on the market for months and buyers have already started looking elsewhere. So how do you stop the seller from overpricing? Here are three things you can do to help sellers understand their accurate value:
Show them the comparables
When recent sales happen that are similar to the subject property, we use these to compare. The idea is that if a buyer was willing to pay X for property A, then they should be willing to pay a similar price for our new listing, if it’s similar. Make sure you are using good comparables that are similar. Things to look that are similar include:
- Gross Living Area
- Land Size
- Bedroom Count
- Bathroom Count
- Year Built and Style
Make sure you point out both the similar features and the differences to your sellers when reviewing these comps.
Show them the competition
By looking through the eyes of the buyer, the seller can understand why a buyer would or would not choose their house. To do this, show them the other properties on the market currently for sale and how they compare to the subject property. Are they bigger, newer, have better amenities? If so, expect the price to reflect that. Don’t let the seller pick a price similar if the competition is better. A buyer will usually pick the property that’s the best value for the money in their eyes.
Make them acknowledge their mistake
If the seller is adamant about pricing the property above what you’ve suggested, get them to sign on the dotted line. By signing a hold harmless and acknowledgement form, they’re acknowledging that they picked their price and ignored what you suggested. This makes them rethink everything including looking at comps again which may cause them to change course on their pricing – making this a win-win situation for everyone! If you don’t have a form like this for your sellers to sign, you can find one here.
When a new listing opportunity comes your way, don’t blow it by allowing the seller to overprice the property. Be sure to follow these steps for an accurate price every time.
Other forms you may want to check out include a Competition Cover Sheet and How to Prepare for a Showing in Less than 10 Minutes.
On another note, do you find yourself frustrated with your real estate career, but don’t know where to start or have a solid plan in place? You might want to check out my 90 days to Success Coaching Series. There are tons of great tips in this coaching on how to better serve your customers and build the real estate business you’ve been striving for.
If you’re looking for more ideas to implement into your real estate business to achieve success, be sure to read The Standout Agent, available on Amazon and everywhere books are sold. There’s a reason why it quickly became a #1 seller!
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Until next time…