from Florida Realtor Magazine, May 2007 | page 29

Pricing Tips from a Top Trainer

In a word, sellers are angry. They can’t command the same price for their home that they would have received for it two or three years ago, according to Bill Barrett, of Bill Barrett Seminars in Orlando.

“I know of one condo project in Orlando that started at $240,000, went up to $400,000 and now is down to $320,000. Sellers are ticked off that they didn’t sell earlier,” Barrett says.

Here are his tips to help sellers effectively price their homes:

1. Educate and inform—do not sell and tell. Bring the seller up to speed on relevant statistics. Compile graphic charts to compare numbers from five years ago, three years ago, one year ago, six months ago and today. You can do this with home prices, inventory (buyers have more choices today), interest rates and the average number of days on the market, he says.
2. Don’t let them shoot the messenger. Explain that you’re only the bearer of the bad news—not the one who controls it. “Tell the sellers, ‘I’m just letting you know. I’m trying to show you my years of experience,’” Barrett says.
3. Explain the competition factor. There are three sources of competition: other home sellers, new construction and corporate relocation homes. Of those, the sellers of new construction and corporate homes are unemotional. “That means [they’re marking prices] down 10 to 20 percent,” Barrett says. “They’ll do whatever is necessary [to sell a home].” So, your sellers should be willing to price accordingly.
4. Show the benefits when the tables are turned. If your sellers plan to buy another home, demonstrate how the current market will eventually benefit them. Barrett points to a woman in New Jersey who was trying to sell her home at a $439,000 list price and planning to buy a $950,000 home (new construction). She negotiated to buy the new home for $800,000; then reduced her own home sales price to $399,000. It sold immediately.

“Yes, she lost $70,000 [off] what she would’ve gotten two years ago, but at the same time, she gained $150,000 with the new home purchase,” Barrett says.