Pricing Strategies and Philosophies

1. A REALTOR cannot control the market conditions, only the marketing plan.


2. Never select an agent based on price.


3. Understanding market conditions are crucial to pricing.

..a. Are we in a rising or falling market?
..b. Are we in a buyers or sellers market?
..c. Do you have the “law of supply and demand” on your side?


4. There are 4 kinds of numbers used to represent the price of the property:

..a. Cost – What was paid + capital improvements.
..b. Price – What the sellers want.
..c. Value - what the buyer is willing to pay.
..d. Market value- what a willing buyer and seller will agree upon.


5. Substitution is the value of an amenity in a home that is based upon the amount it will enhance the selling price, not what it would cost to add it to a home.


6. Reasons for not overpricing:

..a. Over-improvement – a seller cannot selectively add to their lifestyle and enjoy it and expect the buyer to pay for the original cost.
..b. Need – the need for money does not increase market value.
..c. Original purchase price was too high.
..d. Desire to “break-even.”
..e. To leave bargaining room.
..f. Move isn't necessary.
..g. Corporate buy-out is available.


7. A property should show the best and be priced properly right from the start. The buyers looking at the property in the first couple weeks are your ‘best' buyers. These buyers have already be looking and have seen the competition and are waiting for the right house to come along.


8. Benefits from proper pricing.

..a. Faster sale
..b. Less inconvenience
..c. Exposure to more prospects
..d. Increased REALTOR response
..e. Better response from buyers
..f. Attracts high offers
..g. Means more money to seller
..h. Home will appraise and sale will close