How do real estate agents determine prices?: 5 strategic considerations
Although a quality and professional real estate agent will assist his client in determining the most appropriate listing price creation, it must be remembered and understood that the final decision rests with the homeowner to sell their home. Since, for most, the financial value of their home is one of their greatest personal assets, an essential agent skill is creating a level of trust and a personal connection between the owner and their agent. Doing this makes it possible, to the greatest extent possible, to build trust and a bond, where a full and thorough discussion, etc. becomes possible! With that in mind, this article will attempt to briefly consider, examine, review and discuss 5 key strategic considerations, when it comes to determining the most appropriate initial listing price, etc.
1. Competitive Market Analysis (CMA): The best and only logical, practical, realistic and well thought out way to determine a suggested price is to prepare a comprehensive Competitive Market Analysis (CMA). This should consider houses, with similar characteristics, in the same general area/region, and measure/evaluate, factors, such as: Time on the Market; the relationship between the initial listing price and the sale price; significant advantages and disadvantages; positive and negative, related to the specific area, local, etc. Professionals should suggest a range, based on this process, and assist, suggest, to the owner, the pros and cons, while answering questions and addressing specific concerns.
2. Marketing strategy / plan: There are a variety of possible strategies, and the best marketing plan should be based on significant teamwork between the agent and the owner. Up front, a thorough discussion of the possibilities and which marketing plan makes the most sense is a valuable step!
3. Target vendors/priorities: Real estate professionals realize, they must carefully, effectively, listen and learn, their seller’s/client’s personal objectives, and personal priorities/goals, etc.! Pricing should be based on the seller’s tolerance, patience, and personal comfort zone, and should be adjusted to the realities of current market conditions.
4. Local market/ type and conditions: Know, understand and determine the existing local real estate market, including nuances, in terms of conditions and types, including factors, based on supply and demand, etc.
5. Time considerations: Whether, the seller, has the patience, ability and mindset to wait, rather than whether there are compelling personal/financial economic factors and considerations often determine the pricing strategy. While someone, who is ready, willing and able to patiently wait, may price the house at the high end of the range, others, who, timing matters, must price it right, right from the start!
When you’re ready to sell your home, carefully interview potential real estate professionals before hiring an individual. Take a hard look at many relevant factors and make sure you’re on the same page from the start.