PRICING YOUR PROPERTY LISTING Early in the listing process we will discuss strategies involved with determining a timely and objective price range based on market realities. The Realtors Property Resource (RPR) provides a good place to start. Here we can look for the Automated Valuation Modal (AVM) where the properties estimate will be based solely upon publicly recorded sold data. Next, we can look for the Realtors Valuation Modal (RVM) where the properties estimate will include on-market and off-market Multiple Listing Service data, plus publicly recorded sold data. Now we can discuss local market conditions- is the area experiencing a buyer's market or a seller's market? Objectively consider the property condition- how does this property compare to others in the nearby area? Identify the properties unique features- define the standout characteristics that can add value. Discuss the owner's timeline for a sale- are you looking for a quick sale or willing to wait for the right offer? Review recent comparable sales- what have similar properties in your area sold for recently? Now we can utilize Paragon's Price Analysis feature that can deliver an estimate of the number of potential buyers per the chosen price point. From the price range we can choose an initial listing price. Here it is important to acknowledge that real estate markets shift and change. Acknowledging real estate markets shift means considering local market cycles that will relate to seasonal trends. The agent and the sellers will plan to monitor new listings and sales in the nearby area. This translates to staying adaptable while being prepared to adjust the price of the listed property when local market feedback is presenting data indicators that would support a price change. Louis Kutzke has earned the Pricing Strategy Advisor (PSA) certification. Are you preparing to sell or buy a house - contact Realtor Louis Kutzke SRES, PSA, SRS, RSPS with eXp Realty at 608-432-4286 to discuss combining our efforts to produce a favorable outcome. Centrally located in Wisconsin Dells and serving the nearby areas in the Counties of Columbia, Sauk, Juneau, Adams, Marquette, and Northern Dane. PRICING THEORY TIME IT TAKES TO FIND BUYER Coming up with a listing price is a collaboration between the seller and the agent. As an agent I want the seller to understand how the current market conditions, the estimated price range for the property, and the expected time involved to complete a closed sale all fit together. An estimate of the price range will be dependent upon the date the analysis was performed because market conditions used to calculate the price range estimate are constantly changing. Fannie Mae defines market value as the most probable price that a property should bring in a competitive and open market under conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgably, and assuming the price is not affected by undue stimulus. The agent's timely analysis of the market conditions to determine an estimated price range is to assist the seller with choosing a listing price that a buyer would pay a seller in an open market. The price the seller chooses to list their house for will have an influence on the time it will take to sell the property. I like to use the diagram of the pricing pyramid to demonstrate how where the chosen price resides in relation to the estimated price range is expected to affect buyer behavior. The pricing pyramid projects that a chosen price 15 percent above the estimated price range will attract about 10 percent of the potential buyers to look at the property. A chosen price 10 percent above the estimated price range will attract about 30 percent of the potential buyers to look at the property. A chosen price within the estimated price range will attract about 60 percent of the potential buyers to look at the property. A chosen price 10 percent below the estimated price range will attract about 75 percent of the potential buyers to look at the property. A chosen price 15 percent below the estimated price range will attract about 90 percent of the potential buyers to look at the property. More potential buyers can mean a shorter length of time to sell- where fewer potential buyers can mean a longer length of time to sell. It will be beneficial for a seller who chooses a listing price above the estimated price range to understand their property can be expected to have fewer viewers online, fewer calls asking about the property, fewer in-person showings, and take a longer period of time to find the right buyer. A seller who chooses a listing price within or below the estimated price range can be expected to have more viewers online, more calls asking about the property, more in-person showings, and take a shorter period of time with finding a buyer. The seller is in the driver's seat when choosing a listing price. The agent's role is to deliver the information and guidance that will enable the seller to understand how the chosen price relates to current market conditions, the estimated price range, and the expected amount of time that will be involved to complete a closed sale for their property.