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The Trick to Asking for Price Reductions (And Getting Them)

        

Are you doing a weekly call to all your sellers? If you haven't started doing this, this is something you need to be doing. And as you take new listings, you need to just create this expectation that you're going to call them every week.

My preference is on Monday. I want to get the week started off right. And having my Monday morning power hour, where I call sellers, is super important in my business plan.

So why do we make calls to our sellers every Monday?

Because we need to earn the right to be able to ask for price adjustments, condition improvements, or incentives if they're needed in order to get the property sold.

The market's changing and not every single listing you bring to the market is going to sell instantaneously anymore. Often we're going to have to make some adjustments in the condition, price, or incentives we're offering.

Here's how you handle that conversation with the seller:

I'm going to start by saying, "Hey, just want to give you a quick update...

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How Competitive-Based Pricing Helps You Close A Deal Faster

        

As we begin to price property, it's important to understand the difference between comp-based pricing and competitive-based pricing.

Comp-based pricing is what REALTORS typically do when they do a CMA, they do a comp based pricing analysis. What they do is they look at properties that have sold three to six months ago, very similar to what an appraiser does. And normally in a typical market, that's very effective. But we're not in a typical market.

When you're doing that today, you could have an inherent flaw in your data. And here's what it is:

Back in April and May, all indications point to the fact that we probably hit our apex point of the market. Meaning that home sales were indicating at 23-26% appreciation rate compared to the year before. So that was the peak acceleration of our markets.

Since then, we've been moderating. And what that means is that people aren't getting 23-26% compared to a year ago. Now it's down to about 16.9%, still high, no doubt, but that ...

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How to Still Land Multiple Offers as Buyers’ Activity Fades

        

Hey guys, the market is shifting. If you can feel it in your market, you're not alone. One study that's backing this up is a study that's just been done by realtor.com. It shows that of the top 300 Metro markets in the country, 45 are seeing significant price adjustments happening.

I'll give you a couple examples:

Des Moine, Iowa — 32% of the listings have had a price adjustment

Midland, Texas — 28% of listings have had a price adjustment

Toledo, Ohio — 26% of listings have had a price adjustment

Metairie, Louisiana — 24% of listings have had a price adjustment

Where I live, Portland, Oregon — 20% of listings have had a price adjustment.

So not every market's having this yet. But we're certainly seeing sellers starting to be wise to the fact that buyers aren't just going to pay infinity anymore. There is buyer resistance to pricing. We've seen the largest run-up in pricing. Prices have hit an all-time high. And buyers are starting to put the brakes on.

That's why we...

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Why The First 5 Days on The Market are The Most Important

        

Hey guys, when you set a price on a property, how fast do you pivot if you got the price wrong?

And we all get prices wrong, I've gotten prices wrong. Anybody that's been in the industry for any length of time has gotten the price wrong.

So how fast do you pivot? How fast do you reach out to the seller to try to get that price adjustment?

There's a new study done by ShowingTime, which shows that the average across America, in our current market for there to be a massive drop in activity is five days.

After five days, activity goes straight down.

So we have a five day window to try to generate a lot of showings and hopefully multiple offers. If we get past that five days and we don't do an adjustment, we're probably going to have a hard time meeting the market where it's at.

So we have to lay the groundwork with sellers and have a conversation with them about this five day window. It's not two weeks. It's not three weeks. It's not a month. We're not giving it that leng...

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The “Four Price Conversation” That Prevents Your Sellers From Sitting On The Market Without Selling

         

There are a couple of numbers we need to look at to understand where the market's at and what's happening with the market.

Number one is the pending home sell index, which ​had a decrease of 1.9% compared to a year ago. And again, a 1.9% decrease compared to last month. Coincidentally, it was the same number.

But when we combine that with an increase in inventory of 4.1% the month before and a decrease in interest rates because they fell back below 3%.

So we have to look at this as the whole and say:

Why would there be a decrease in sales when we've had an increase in listings and a lower interest rate?

Why aren't buyers saying, "Hey, I have more to choose from and my interest rates are going down. Why don't I own the market?"

Buyers aren't doing that. In fact, they're pulling back a little bit from the market.

The reason is...

Buyer price resistance

Buyers are saying, "Hey, it's been 112 straight months of home price increases. We've had a 23% increase in what we...

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The “Per Square Foot” Secret To Becoming The Expert In Your Market

       

What are the most expensive per square foot homes in America?

According to a recent study recently done by REALTOR.com San Jose Santa Clara had the most expensive per square foot averages across the country.

Drum roll — $1,500 a square foot, not far behind are San Francisco and Oakland with $1,200 a square foot.

Now what's the least expensive in the country? Least expensive is Decatur, Illinois at $102 and Youngstown, Ohio at $120 a square foot.

There's a big discrepancy between the two.

The reason I bring this up is because we need to know what our average per square foots are in our local market. And it's going to change by subdivision. It's going to change by micro markets. But overall, you need to know what your county averages are and then your subcategories in different market segments. That way you can speak to this as an expert.

The other thing you need to be able to do is bring these into a conversation with buyers and sellers. And show them what our homes are ...

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Why Buyers (And Sellers) Who Wait Will Spend More Money in 2021

        

"Should I wait to buy a house?"

The real question behind that is, do they think prices are going to go down or are they going to go up?

Buyers are always debating this in their mind. They think that there's going to be some kind of dip. But statistically, according to every model we're looking at today, that's not likely because this isn't a "housing bubble." This is a "housing shortage" that we're in.

This is a supply versus demand issue more than anything else. And actually, the experts in the industry have just upgraded their projections for what they anticipate sales prices to do in 2021.

Here's the latest update:

I'm going to compare this to what they said in January. In January, Mortgage Bankers Association, Fannie Mae, Freddie Mac, Zelman & Associates, and the National Association of REALTORS consensus was that home prices during 2021 would go up 5.3%. Somewhere higher, somewhere lower, but the consensus was 5.3%.

Now, what is it today? They just updated these n...

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Why Homes are More Affordable than They’ve Been in 4 Years (even with house prices rising)

        

The National Association of REALTORS® shows that home affordability is better than it's been in the last four years.

So what does that mean?

It means that they measure what it would take for the median family in the country and their median income versus the median sales price and the interest rates that you would have to pay in this market. And they come up with how affordable it is to own a home.

The baseline number is 100. In other words, families have 100% of the median income needed to buy the median priced home in the marketplace.

Now guess what that number is today.

It's 187!

So homeowners on the median scale have 187% of what it would take for them to own a home in their marketplace.

Not only is this an amazing number, but it's much better than it was a year ago.

When we look at home prices going up, sometimes we can get in the trap of thinking that things are getting less affordable.

But the offset to this is interest rates going down and people making more...

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The Power of Demand Based Pricing

 

Have we hit a hard ceiling on pricing in the country?

According to a recent study the number of homes receiving over full price has fallen dramatically. In addition the appreciation rate has slowed to 3-4% in many areas of the country. Here are some numbers that provide some insight:

  • The share of U.S. homes that sold for more than their list price in 2019 fell to 19.9%, the lowest annually since 2016.
  • Homes that sold above list last year typically brought in $5,100 more than the asking price, down from $5,500 the year before.

Even with record low inventory and strong demand buyers are now resisting higher prices. Why? One reason is income, over the past twenty years incomes have been relatively stable with very little growth. 

So how can we help sellers navigate the changing market landscape? One way is to explain demand based pricing. Watch the video to learn how identifying and explaining buyer demand to a seller can help them position their home to attract more showings...

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Overpriced Seller? Try the One in a Million Script

 

I want to test the market...

I want to start high and work our way down...

I want some wiggle room...

Have you heard these comments from a seller during a listing presentation? Agents can often fall into the trap of allowing a seller to talk them into listing a home for far above what they know it will sell for and what the comparable properties in the market are receiving. 

To avoid this fate trying using the One in a Million Script.

Watch as Jim demonstrates how to present the seller with three different pricing strategies that will motivate sellers to think about a strategy rather than just the asking price. 


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About Jim Remley

Jim Remley is a nationally r...

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