Two Ways Most Agents Discuss Pricing

By: Sharran Srivatsaa, Author's original work

Today I have a fascinating and practical topic that I think you'll love. In my experience, working with some high profile clients, there’s one topic that comes up non-stop, whether as a problem, a roadblock or just something people feel uncomfortable scripting around...and you guessed it, it’s discussing pricing.

The average agent talks about pricing by doing it one of two ways:

They Feel Like They Know the Neighborhood and Pricing Around It

They walk the home, and because of their natural understanding of market dynamics and the market itself, plus the nuances, and because they have their pulse on the local market and the relationship between them, the average agent is generally able to come up with the range that's ‘good enough’.

And the interesting part about this is that the homeowners and sellers, who have access to modern data resources, have a similar range. So, walking in and saying "Mr. and Mrs. Seller, we think your home is priced between $900,000. and $1,100,000." —Is not good enough anymore, because the average seller has and knows that same information. I think that's where the disconnect starts to happen because it becomes a question of, for the average agent in the room, "What can I do without insulting this client? I don't want to go too low, or too high, so how do I navigate this?"

We end up responding with something like, "It's not about the pricing; it's about pricing strategy."

But eventually, we figure out that our client wants to know roughly what their home is worth, whether we use a pricing strategy or not. It's important to discuss this, because when asked the question, "Hey Mr/Mrs. Agent, what do you think my home is worth?" —We tend to have a lot of deflections. We say things like, "Let's walk you through a couple of pricing strategies instead." Or, "I don't know, what do you think it's worth?" Or, "You've walked through multiple homes in this neighborhood, and have kept track of the pulse; what do you think the home is worth?" Or, "If you have to guess the range, what would it be?" Or we deflect the conversation and say "Let's not worry about what it's worth. Just tell me where you're going, and what you need to get there."

Going Straight to Logic

If you don’t resonate with bucket #1, I have a feeling you may be in the later common response, the logical one.

If we don’t know exactly what to do when it comes to pricing, we often pull out our CMA's and start walking our clients through them and the market dynamics. Then, clients begin to ask questions about things that are active, pending or sold, and eventually, it turns into home comparisons, like "my bathroom is better than theirs, and I've had more renovations done." And we start to have these conversations around the CMA. The CMA is meant to be a resource for establishing the truth that you bring to the table from your experiences, not the other way around. It's supposed to validate the market pulse that you have; Your market pulse is not supposed to validate the CMA; otherwise, why would they need us?

If you have any questions regarding the five perspectives of pricing, please don't be afraid to send me a message and ask - you can find me on Instagram at @SharranSrivatsaa.

These nine steps have been crucial to increase my productivity and overall effectiveness and joy and in my life. I would love to hear about how they have made improvements in yours as well — be sure to reach out and let me know. You can find me on Instagram at @SharranSrivatsaa.

Sharran Srivatsaa is the CEO of Kingston Lane, a push-button technology execution platform for real estate. Most recently, Sharran grew Teles Properties by 10x in 5 years and led its acquisition to Douglas Elliman.

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