Try This Powerful Home Pricing Strategy (with example)

By Craig Forte, Founder - Posted on
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Last Updated on April 7, 2017

Do you ever get price resistance from sellers? Nearly everyone does these days. In today’s fluctuating market, your toughest job is convincing sellers to list at a price lower than their (inflated) expectations. If you want to land the listing and have any chance of selling it before it bleeds your working capital to zero, you’re going to need a powerful strategy to prove your case. Here, agent Brian Healy presents a terrific “3-Approaches to Value” in order to dial in on the correct price for a potential listing. Then he presents his findings in a very simple, yet convincing 1-page presentation (see his example)… “We use a unique method for pricing a home that consists of providing statistical data for recently sold homes that are comparable to the listing at hand. Our 3 approaches to value are “price per square foot”, ratio of assessed to sold approach”, and “straight comparable approach.” What we do is we look back 6 months to find homes with the same amount of beds, baths and reasonably similar style built within 10 years plus or minus of the subject property. We assign a standard value of $40.00 per square foot to below grade sq/ft as is fairly typical in our area and back this value out of the sale price. We then divide the remaining sale price by the above grade sq/ft to get the price per sq/ft for the home. Once we have all sq/ft values for the homes we add them together and take the average. We apply this value to the subject property and that is our “price per sq/ft value. Next we find the assessed value for these same homes and divide the sale price by the assessed value to get the ratio of sold to assessed value. We apply this percentage to the subject property assessed value and that is our “ratio of assessed to sold value”. Finally, we take the most comparable home from this group and apply its price per sq/ft and ratio of assessed to sold value to the subject property to get the “Straight Comparable Value”. We add the 3 values together and this is our exclusive “Blended Market Value.” We always note that this is a value based on averages of sold properties and not actives. We only compare with the homes that have got the job done! Based on our blended market value we provide a suggested list price range. We always have a fall back in that if the home is below average we suggest the low end of the range and if it above average we use the top end. We use this effectively on our first appointment to determine if the sellers have a realistic idea of pricing. Sellers are always impressed with our ability to provide such a unique look at value and we almost always win in competitive situations due to the fact that most agents just walk in with 3 currents, 3 solds & 3 pendings…. Boring! I’m including our summary page (Click Here to See Summary Page) that lays-out our values for the future client. We believe this unique approach has helped us get inside the top 1% of agents in the state for 2007. In this market consumers want valuable differentiators from their agent(s) and we walk through the door with it!”

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Craig Forte
Craig Forte has helped more than 32,000 real estate professionals over the last 22 years, helping them generate more clients, more referrals and repeats, and grow their production with less stress, time and effort – all by using innovative marketing training, systems and tools.
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