Here are the slides for the presentation I gave at the 13th Annual Spring Home and Garden Show at the Woodlands Waterway Marriott. For those in attendance at the seminar and want a free home valuation report, you can sign up at RREA.com/value.

1. Fundamentals
of
Pricing
Strategy:
Selling
Homes
for
Top
$
Shannon
Register
Broker
/
Owner,
Register
Real
Estate
Advisors
Owner,
RREA
Media
Host,
“Houston
Real
Estate
Radio”
on
NewsRadio
740
KTRH
13th
Annual
Spring
Home
&
Garden
Show
March
7-­‐8,
2015

2. Agenda
• Which
Market
Value?
• Fundamentals
of
Pricing
Strategy
• MulXple
Offers
To
Get
Top
Dollar
• AccounXng
for
the
Upgrades
• Free
Home
Value
Reports
• Pricing
in
a
Changing
Market
&
Appraisers
• Resources

3. Which
Market
Value?
• Tax
Value
• Insurance
Value/Replacement
Cost
• Zillow’s
ZesXmate
• Appraisal
Value/Lender’s
Value
• Market
Value
to
Re-­‐Sell
• Demand…

4. Tax
Value
• The
Annual
Fight
– Yourself
or
Hired
Out?
– Realtors
have
the
ammo
you
need!
• Lower
is
Beeer
• Homestead
ExempXon

5. Insurance
Value
• Based
on
Replacement
Costs
– Cost
to
Reconstruct
– Based
on
Labor/Materials
• Cost
MORE
or
LESS
than
sales
price?
– Buying
a
view
-­‐
replacement
may
be
low
– Buying
a
foreclosure
–
replacement
may
be
high
• Past
Incidents

6. Zillow
ZesXmate
• Understanding
AVM’s
– Hundreds
of
Automated
ValuaXon
Models
• RREA’s
Free
Home
Value
Report
• Value
of
a
Realtor

7. Appraisal
Value
• Why
Does
A
Lender
Require
An
Appraisal?
• Best
Time
of
Year
for
an
Appraisal
• Appraiser’s
Look
Back
–
Don’t
See
Demand
• Management
Companies
• Can
You
Fight
An
Appraisal?

8. Market
Value
• Value
=
What
Buyers
will
pay
for
similar
homes
• NEED
is
not
an
acceptable
excuse
for
Overpricing
• CMA
–
there’s
NO
standard

9. Market
Value
Loca%on
+
Condi%on
+
Market
+
Price
=
Your
home
will
sell
@highest
profit
&
quickly
when
all
these
ingredients
are
combined
perfectly!
• LocaXon
–
Schools,
traffic,
commute
• CondiXon
–
Maintenance,
Smell,
Staging
• Market
–
Recession,
InflaXon,
interest
rates,
mortgage
terms,
compeXXon,
DOM
• #1
Price
–
too
low
you
lose,
too
high
you
sit
on
the
market.
(Ways
to
ensure
it’s
priced
right)

10. CMA
–
There
is
NO
Standard
There’s
a
standard
for
what
it
is
&
what
it
means,
but
not
for
how
you
get
it!
• HAR.com
– Tempo
– Fusion
– Stats
• Realist
• Realtor.com
• RPR
Report
• Company
Specific
• No
Realtors
Use
Zillow
• CombinaXon
of
All
• Knowledge
is
KEY

11. CMA
Info
• Prices
of
Similar
Homes
that
Have
Sold
Recently
• StaXsXcs
(Price
Per
Sq
Ft/Sq
Ft
of
Homes)
• CompeXXon
• Pending/Expired
• 3
Prices
–
List,
Sales,
Your
Net
• AbsorpXon
Rates
**Sellers
typically
sold
their
homes
for
97%
of
the
lis%ng
price,
and
47%
reported
reducing
the
asking
price
at
least
once**

12. Demand
• Prices
Increase
• Appraisals
May
Not
Increase
• MulXple
Offers
• Quick
Sale
• Choice
on
the
financing
&
other
points
• Fewer
Seller
Concessions
• Back
Up
Offers

13. Fundamentals
of
Pricing
Strategy
• Pricing
Your
Home
• Pricing
Guidelines
• Choosing
a
Realtor
• EvaluaXng
Your
Property
• Pricing
Pyramid

14. PRICING
YOUR
HOME
• Sesng
the
proper
asking
price
for
your
home
is
the
single
most
important
factor
that
will
determine
the
success
or
failure
of
your
home
sales.
• The
consequences
of
making
the
wrong
decision
are
painful.
If
your
home
is
priced
too
low,
you
will
literally
be
giving
away
thousands
of
dollars
that
could
have
been
in
your
pocket.
• Price
it
too
high,
and
your
home
will
sit
unsold
for
months,
developing
the
reputaXon
of
a
problem
property.
• Failure
to
understand
market
condiXons
and
properly
pricing
your
home
can
cost
you
thousands
of
dollars
and
cause
your
home
not
to
sell
…
fouling
up
all
of
your
plans.

15. PRICING
GUIDELINES
• What
you
originally
paid
for
the
property
does
not
affect
its
value.
• The
amount
of
money
you
need
to
get
from
the
sale
of
your
property
does
not
affect
its
value.
• What
you
think
it
should
be
worth
has
no
effect
on
value.
• An
appraisal
does
not
always
indicate
what
your
property
is
worth
on
the
open
market.
• The
value
of
your
property
is
determined
by
what
a
ready,
willing,
and
able
buyer
will
pay
for
it
on
the
open
market,
which
will
be
based
upon
the
value
of
other
recent
closed
sales.
BUYERS
DETERMINE
MARKET
VALUE!!!

16. Choosing
A
Realtor
• A
REALTOR®
has
no
control
over
the
market
condiXons,
only
their
MarkeXng
Plan
• Never
select
a
REALTOR®
based
on
the
price
they
promise
• Select
a
REALTOR®
based
on
criteria
about
their
company,
the
experience
of
the
salesperson,
services
provided,
and
ability
to
negoXate.
• It
would
be
smarter
to
select
a
REALTOR®
first,
then
agree
on
price.
• Don’t
allow
agents
to
‘bump
up’
the
price
to
obtain
your
lisXng.
True
professionals
will
give
you
truthful
feedback
and
accurate
informaXon
so
you
can
price
to
sell
• How
was
their
CMA?
• Professors
=
Doctorates,
Physicians
=
Medical
Degrees,
REALTORS
HAVE
DESIGNATIONS!

17. EvaluaXng
Your
Property
PRICE
-­‐
Stated
amount
an
owner
is
willing
to
accept
for
a
property
COST
-­‐
The
amount
plus
any
capital
improvements
made
since
the
purchase
VALUE - The
amount
a
buyer
is
willing
to
pay
REGRESSION
&
PROGRESSION
–
Effect
surrounding
home
sizes
have
on
the
value
of
your
property.
Regression
is
the
decrease
in
value
when
surrounded
by
smaller
homes;
Progression
is
the
increase
when
surrounded
by
larger
homes.

18. EvaluaXng
Your
Property
MARKET
VALUE
-­‐
The
amount
that
will
bring
a
sale
between
a
willing
buyer
and
a
willing
seller.
It
is
based
on
the
history
of
similar
properties
recently
sold
in
the
area
(CMA).
SUBSTITUTION
-­‐
Substitution
refers
to
the
actual
value
of
an
amenity.
Value
is
determined
not
by
the
cost
invested
in
a
property,
but
by
the
value
derived
from
it.
Example:
Home
with
more
expensive
well
is
worth
no
more
because
the
value
is
in
the
water,
not
the
cost
of
obtaining
it.

19. **SPOILER**
Value
is
determined
by
what
a
buyer
gets
OUT
of
a
feature…not
what
an
owner
has
IN
it.

21. Benefits
of
Proper
Pricing
• Fast
Sale
–
save
on
carrying
costs
• Less
Inconvenience
• Exposed
to
More
Prospects
–
Pyramid
60%
Buyers
• Higher,
more
compeXXve
offers
–
buyers
are
less
likely
to
make
a
low
ball
offer
for
fear
of
losing
out
on
a
good
deal
• More
Money
to
Sellers
-­‐
net
more
due
to
higher
price
and
fewer
carrying
costs

22. Drawbacks
of
Over
Pricing
• Reduced
AcXvity
–
Agents
won’t
show
if
they
feel
it’s
overpriced
• Lower
Ad
Response
–
Buyers
will
move
on
to
beeer
priced
homes
• Loss
of
Buyers
–
Home
will
seem
inferior
compared
to
other
properXes
at
that
price
point
• Helps
your
compeXXon
–
your
high
price
makes
other
homes
look
like
a
good
deal
• Causes
Appraisal
Issues
• Lower
Net
Proceeds
–
Increases
carrying
costs

23. MulXple
Offers
for
Top
Dollar
$
• If
pricing
is
15%
below
market
value,
we
know
from
the
pyramid
that
90%
of
Buyers
will
be
looking
at
it.
• Benefit
of
MulXple
Offers
– More
OpXons
– Choose
Price
– Choose
Financing

24. AccounXng
for
the
Upgrades
• Law
of
diminishing
returns
on
Improvements
• Well
Example
–
Top
Dollar
Top
Return
• Upgrade
for
your
own
enjoyment,
but
Repair
based
on
what
buyers
want
• RPR
Report
–
FREE
Home
Value
Report
• Plug
in
your
upgrades
before
you
do
them!
• Not
all
Realtors
can
do
this
for
you

25. Pricing
in
a
Changing
Market
&
Appraisals
• For
Appraisal
Purposes,
best
Xme
to
sell
is…
• For
Demand
Purposes,
best
Xme
to
sell
is…
• Best
Xme
to
buy
a
new
construcXon
inventory
home
is
usually…
• Best
Xme
to
sell
your
home
is…when
your
neighbor’s
home
IS
NOT
for
sale.

26.
• Realtor.com
• HAR.com
• RREA.com/value
=
Free
Home
Value
Report
• REALTORS

27. QUESTIONS?

28. Shannon
Register
s@rrea.com
For
a
copy
of
the
slides,
please
visit
RREA.us/Woodlands