Being promised a high selling price by your agent, or having your agent nod in silent agreement with your overly ambitious price expectation, feels great, right?
Both you and your agent are on the same page and you are all set to sell for an incredible price outcome because you’ve selected an agent who is as ambitious as you are. That’s why you chose the agent you did … because they gave you the highest price assessment on your home compared to the other agents you interviewed, right?
Unfortunately, over-promising and lies of omission (not correcting a seller’s misguided price expectation) are simply two versions of the same lie and, unless the seller is extremely lucky, or the market catches up to the price lie, the risk on a seller’s time and price premium can be disastrous.
Over-promising on price, or omitting to inform the seller that their price expectation is unrealistic and/or significantly out-of-sync with even emotional buyers, are two examples of inefficient price positioning, but they are a standard practice for real estate agents all over the world.
As many real estate trainers have said, ‘List, Reduce, Sell‘.
Agents are told, “just get the listings and 50% will eventually sell”. However, if YOU were in the 50% that didn’t sell, how happy would you be?
So, if you are looking for a high price, you need to reject agents who make any type of price promise … overt promises or covert promises!
Starting from a realistic price position, and then using negotiation strategies that allow the price to climb in an unshackled way, is the safest way to protect whatever high price may come your way.
The most important piece of information you need from your agent isn’t a price that will tickle your ears.
If you want to sell for a rockstar price, the first thing you will need to understand is the fair market value of your home.
And the reason it is so important to understand the fair market value of your home is …
So you know a good deal when you see it!
It’s so you have a ‘reference point’.
However, this reference point can only be discovered when you are on the market … in your actual campaign, and not before.
More importantly, if you or your agent don’t know how to work out your ‘price floor‘ (the fair market value) in your actual campaign then you will never know how far above the floor the final offer is.
Understanding your price floor, and the offers above the price floor, is what we call ‘The Bouncing Ball Of Buyer Interest‘.
If you have a home with very few impediments the price dynamic will be like bouncing a golf ball on concrete … a huge bounce from the floor level.
If you have a home with a high level of impediments the price dynamic will be like bouncing a squash ball (or even a medicine ball!) on concrete … a low (or sometimes non-existent) bounce from the floor level.
However, in either case all balls react to gravity in the same manner and all balls eventually rest back on the floor. They never bounce higher than their first bounce!
Open home numbers, offer, and prices all obey the same laws of nature.
They all deteriorate over time.
Agents who promise a high price, that is even slightly above the highest bounce of the ball (the highest offer point), will all hear the most dangerous words in real estate. These words will arrive just after their seller rejects the highest offer, that doesn’t quite reach the pre-market price promise where the seller will say … “that’s a good start!”. That’s what sellers say when they receive a cracking offer early in the campaign that doesn’t quite reach the price promise level.
Unfortunately, sellers in this position learn about gravity the hard way, and over time, as they realise they missed the highest offer, they end up chasing the bouncing ball all the way back to the floor.
The bottom line is, if you don’t know your fair market value (your baseline, unemotional price point) then how on earth will you know if the offer on the table is a good one?
If you want to reduce the risk of losing your price premium, start your campaign with price truths, not price lies.
It’s not the promise of a price that gets the price, its the process you use.