How you can price your client’s homes right in a changing market.
If you haven’t been seeing the changes in our market, you’re probably living under a rock. I’ve been making a series on how to adapt to our market shift, and today I’ll cover tactic No. 7: seller pricing strategies. The strategies sellers and agents used last year are certainly not the same as the ones they need to use now.
The first thing is that you have to be the local market expert. Know the data on inflation, know what interest rates are doing, and know the unemployment rate. Understand how all those numbers impact your area and pass your knowledge on to your clients. The second tactic is to analyze the MLS. Since March 1, we’ve had over a 60% increase in active properties on the MLS. What a seller priced their home for last year will be different than what it is right now. It’s up to us as agents to have great pricing strategies. You should list homes at market value because finding buyers will be hard if you overprice the home slightly.
The last tactic is to use formulas and graphs that demonstrate your knowledge. One formula I want to present to you is the absorption rate. The absorption rate simply tells buyers and sellers how many months it will take to sell out of homes, assuming no new ones come on the market. Three months or fewer is a seller’s market, four to six months is a balanced market, and anything above six months is a buyer’s market.
You can find the absorption rate by adding the active properties, homes under contract, and ones under backup status and dividing that by how many houses sold over the last 30 days. You can do this calculator by neighborhood, city, zip code, or whatever you want. It’s a great indicator of local trends, and it’ll help you inform your clients.
If you have a copy of “The Shift,” get in touch with me, and I will put a copy in your hands. If you would like a free, no-obligation consultation, call, text, or email me. I would love to help you and your business.