This is the second post in the series “Real Estate Property Marketing Plan To Sell Your Oklahoma City Home”
From our comprehensive marketing plan:
1. Pricing. We have learned that if a home is priced wrong, nothing else we do will make a difference. We study the MLS system extensively, looking at each comparable home to see how it really compares. We want to make sure we get every dollar that we can actually get for the home. By pricing to the current real estate market, we can get the maximum price in the minimum time.
So today we tackle pricing. This is a big one and could be a series all by itself! This one’s important! If a home is priced too high, nothing else we do to market the home will make any difference.
Your Home’s Value
Your home’s value isn’t determined by 1) how much you paid for the home, 2) how much you owe on the home, 3) what you need to get out of the sale to purchase your next home, 4) how much you’ve put into the home, 5) how much your neighbor told you they got for their home (may or may not be true), 6) how much an appraiser says your home is worth, 7) how much a Realtor® says your home is worth, 8) what Zillow says your home is worth, 9) certainly not what the County Assessor says your home is worth.
Your home’s value is simply determined by what a Buyer is willing to pay for your home. Period! And that frequently is a hard pill to swallow!
Change Your Vocabulary
Change your terminology to better grasp this process. Words that are out: comps, actives, and price.
Comps are not really ‘comparables’. The new word should be ‘competition’. Too frequently a Realtor® will use the term comp to talk about a comparable home that sold. When you do that you are validating an appraisal and verifying that, if sold, the property will meet appraisal requirements. When thinking about comps think competition. What homes are on the market, similar to your home, and where are they priced.
Actives may or may not really be ‘active’. They are on the market, but believe me, they may not be receiving any activity. The word you need to think about is ‘unsold’. This is the pool of homes, on the market, within which your home must be placed.
Price. Yes a price is put on your home, but to think about it correctly, think ‘position’. When beginning to market your home is must be positioned with the pool of unsold homes in relation to the competition.
When beginning to market your home, you need to think like a buyer for a moment. In recent years, it’s been well documented that a large percentage of home buyers begin their home search on the internet – 87% in 2008 (NAR Profile of Home Buyers and Sellers). I think it’s safe to say, in 2010, simply buyers (all) begin their home search on the internet. How do they search? They put in a city name and anywhere from a narrow to wide price range. That’s it. There’s just about always a lot of homes on the list.
I’ve recently begun including a ‘long-list’ of homes in my listing presentations to show this effect. Let me use an example of a $160,000 house across the street from our office. If I search for home within a 5 mile radius priced from $150,000 to $170,000, there are 162 active unsold listings Here is that sample report.
Don’t Let a Realtor® ‘Buy’ Your Listing
There’s a practice in this industry known as ‘buying a listing’. An agent will go in and tell a prospective seller some extravagant amount that they can sell their home for. They get the listing by ‘buying’ it for the highest amount. And a lot of sellers fall for it. And there their home sits with all the other ‘unsolds’. And sits. And sits. Typically it will either eventually expire or will sell for an amount much lower that it would have if it had been positioned properly in the first place.
The ‘I Want To Price The Home So I Have Room To Negotiate’ Method
This is another one I hear from time to time and it is a fallacy. Here’s why.
If you put your home at the high end of the range looking to have room to negotiate, then your strategy is hope. You hope a buyer finds it on the internet. You hope they think it’s better than the neighbors house. You hope they make and offer. You hope you can come to terms. If they make an offer, it will be low to see what you may really take. You respond with a high counteroffer to see how much they might pay. This may go back and forth several times before coming to terms somewhere in the middle.
Alternatively you could position your home attractively in the market. In this case a buyer finds it on the internet and feels they have to look. It would not make sense not to look. In this case, it’s not uncommon for several buyers to end up looking and possibly fighting amongst themselves to buy the house and this is where multiple offers come in.
Can I guarantee multiple offers by positioning a home attractively in the market? No, of course not. But I can guarantee that there won’t be multiple buyers fighting for a home if it’s overpriced.
It’s not wise to position your home to have room to negotiate. Don’t go with a strategy of hope!
Part 1 – Introduction
Part 2 – Pricing
Part 3 – Staging
Part 4 – Pre-inspection
Part 5 – Repair/Paint/Clean
Part 6 – Photography
Part 7 – Room Dimensions
Part 8 – Neighborhood Photos
Part 9 – Video
Part 10 – Single-Property Website
Part 11 – MLS
Part 12 – Listing Syndication
Part 13 – Virtual Tour
Part 14 – Property Flyers
Part 15 – Sign & Lockbox
Part 16 – Online Classifieds
Part 17 – Property Blog Post
Part 18 – Featured Listing Websites
Part 19 – YouTube
Part 20 – Trulia Pro
Part 21 – Facebook
Part 22 – Twitter
Part 23 – Open House
Part 24 – Direct Mail
Part 25 – Market Update