The Importance of Pricing Your House Right​​ | #kcmdeepdive

Well, I think we're ready to get started this morning. Happy Monday morning. Glad to have everybody on. I can already see people in with the countdown that we have going there today, Monday, September 30. This morning, we're going to talk about the importance right now of pricing a home right at the listing appointment. I think it's a topic that now more than ever is probably one of the most important things as we go into the fall that we get done. Kate did a phenomenal job last week talking about what's ahead going into next year. And I think taking that into consideration and sort of saying, hey, I can guide you forward to show you what's going to be happening in the next year. But right now, we need to work on pricing things right. And I'll show you a couple of reasons for that. With that as sort of a start, we've got a lot of folks on. And we will get started with this deep dive. And again, the title, Importance of Pricing Your House Right. We do all of these deep dives for this reason right here. Most agents know what's happening. And I want you to remember this, good ones understand what's happening, but only the great agents can explain what's happening. And I want to give you a couple of things today, and maybe even some before we get started, some coaching on today to take your phone out, because I'm going to give you a couple of things that are really interesting that I would highly recommend that you take a picture of just to remind yourself of. You could even share it on social, do whatever it is, tag KCM and say, hey, I'm thinking about this right now. This is what I'm working on in my business, because we're going to talk about what's happening out in the market relative to the importance of pricing a home right now. And one of the sort of leading reasons for that is we have a partnership with John Burns Research and Consulting. If you know John Burns, he's probably one of the leading researchers in real estate today. They do a ton with builders, they do a ton with pricing and just consumer sentiment, and then they sort of do a lot of advising at the enterprise level, publicly traded builders, all of those. But we have a survey that we do with them. Maybe some of you on the Deep Dive have taken that survey. And we asked this question, what is the top issue sellers are finding most challenging in this market? Overwhelmingly setting the right price. You see it right there, over 58%. Understanding market demand, legal requirements, marketing, negotiating, all those things sort of pale in comparison to understanding what is the right price. And I think if I were to sort of set our minds on this, the thing that I would be focused on, and I would be saying, if I was sitting down with somebody, I would say this right here, if the price is not compelling in today's market, it's not selling. Okay, if it's not a compelling price, then the home will not sell. And we have proof of that, right? You can give proof of that. And I think, if you're a KCM member, you can go in and grab KCM local slides for some of this information. But let me hop into a reason that this becomes so apparent. And it's this right here. Active listings across the country are growing as new listings sort of have plateaued. We've talked about new listings coming to market being lower than they've been in the last several years, but we know active listings are growing, which is a sign of velocity in the market, right? It's a sign that things are not selling. But the bottom line is, and Lawrence Yoon said this from NAR, he said, homes priced right are selling very quickly. And I'm sure even in the chat here, I don't have it up anymore, but you can comment in there. In most markets, if something's priced right, it's gonna sell quickly. And he goes on to say, but homes priced too high are deterring prospective buyers. You know, I was in Miami just a few weeks ago and have been out at so many events over the last several weeks and got a chance to see so many of you. It's been wonderful. But Red X, they do a phenomenal job, first of all, in the market of gathering expired listings. If you've never heard of Red X, certainly go check them out. But they did sort of some work that I asked them to do where they went and pulled all of the expired listings that had happened in Miami. And then they looked at when they came back on the market and if there was a price break or not. And they basically came up with this through the data. And I would think it would be the same for just about every other city is if something's not priced right, it's not gonna sell. Soon as the price is lowered, it is much more likely to sell. Over 50% of the time, the home then sells, right? So getting it right in today's market is critically, critically important. You know, another reason that we know this is the number of price reductions has increased. This will look going all the way back to the beginning of the year, January, February, March, April, May, June, July, sort of, you know, kind of dips down slightly in August, but still ahead of, you know, the trajectory is up because folks are like, let's just see what we can get, you know, or maybe think that the home is worth more or we're in a faster traveling market, not the case right now. I think pricing is critically important and being able to have that conversation, the tone of that conversation with the client you're serving is critically important. I think as well, I think talking about price is hard in today's market. You know, Kate gave us last week what forecasters are saying for the 2025 market in home price appreciation. I can tell you, if you missed that, you can go back if you're a KCM member and watch that inside the memory, grab all those slides, but the majority of forecasters going into next year are calling for three to 4% price appreciation, a very healthy, very normal housing market, historically normal, which is a good thing. You know, the last couple of years has been very, very healthy, but how do you talk about that? I'll give you a couple of things that I think are helpful in it. First, the fact that home prices are moderating is something we should be vocal about. You know, this is a look going back to the beginning of 2022, sort of through the dip down of 2023 and coming out to the most recent information from Case Shiller as of July. Now this is same home sales and here's why it's important. This is year over year change in home prices. So let's go back to January of 2022, seeing upwards of the high teens, if not 20% in year over year price appreciation, the red hot market that we experienced. So you come through 2022, mortgage rates start rising. We're coming out of that now two years later, thankfully, but mortgage rate starts rising, slows down the market, slows down appreciation, exactly what the Fed wanted to have happen. They've got their eye on inflation and price and housing's a massive component of that. Prices start to bottom out around, you can see it here in this graphic, try to use my cursor right here, middle of 2023 and then come back to this sort of, you know, sort of healthier perspective of pricing. I think being able to sit down and maybe even having this on your phone or an iPad or printed out, when you sit down at a listing appointment, and we'll keep this updated for you, but to be able to articulate, this is what's happened nationally with price. Oh, by the way, here's what's happening with the listings that I have or in our market or however you want to say that, I think is critically important. And oh, by the way, going back to the fact of, if we don't get the price right, it's not going to sell. So I want to talk for just a minute about the way to navigate that. And we've got so many resources for you as a KCM member to leverage in that, but I think there are two critical things that you have to understand right now. First of all, motivation from the seller. What do they want? You know, sure, I think everybody wants to sell their home for as much money as possible, but what is motivating them? Are they trying to get closer to family and friends? Are they, you know, maybe moving because they now only have to go in the office a few days a week and can live a little bit further away, getting closer to grandkids, all of the motivating factors that, you know, from a life event or whatever the case is, cause somebody to say, we want to sell. Here's why this is so important in today's market. If we don't know the motivation, then I don't know if we have a motivated seller. I don't know if we have somebody that's really, really ready to do it. And what's their timeframe? When do they need to make this happen by? Do they need to sell it as quickly as possible? Can they wait forever? Are they going, hey, let's just see what we'll get. And, you know, if perspective is, let's see what we'll get. Gosh, I think in many of you on the call, certainly maybe most of you are better qualified even than I am to talk about that, right? If somebody just saying, hey, let's just put it out there and see what happens, right? In this market, I don't believe that works. I believe having a motivated seller with a timeframe or an understandable timeframe is critically important. You know, inside of our expired listing e-guide, there's five things every seller needs to know. And I had the team pull these. They need the house sold. This is, you know, what everybody's, you know, sitting down thinking about selling their home. They need it sold. They need the most money for that sale. That's certainly true. They need it to occur in a certain amount of time. We talked about that just a minute ago. They want the least amount of hassles and problems. And they want you to help them with their relocation to their new home. Now, I want to talk for just a minute about the least amount of problems. I think in today's market with the NARS settlement, with everything happening, being able to articulate here is how I'm going to navigate this process. Even saying, here are five things that I know every seller wants to have happen. They want it sold. They want the most money. They want it to occur by a certain time. They want no problems. They may need help even moving to their next home, right? This is how I make that happen. In today's world, there's so many, in today's real estate world, there's so many things out there happening. Markets starting to shift, mortgage rates, the NARS settlement, things coming in to be able to isolate and say, okay, this is how I'm going to guide you forward. I think it's critically important. I would argue maybe more important than it's been in quite some time. The other thing that, again, this might be one that you want to grab when you go in and grab the slides after the deep dive, why pricing matters. I think when it comes to pricing your home, setting it at market value will increase the visibility of the listing. It'll drive more buyers your way. And the strategy actually increases the number of buyers who will get to see your home in the search process. So price it over market value. It's going to sit on the market longer. It's going to deter potential buyers. And price drops can send the wrong message, right? Like, hey, what's up with that? Well, price it under market, we lose value. There's decreased buying power and it deters potential buyers because they then think something's wrong. We want to be in market value. This is a great sort of visual to sit down with somebody and say, this is why it's so important that we choose the right price in today's market. This is certainly a shifting market. This is a volatile market right now. And we want to help you get the right price. You know, I think is more critical than ever. US News said this, they said, a home that's overpriced in the beginning tends to stay on the market longer even after the price is cut because buyers think there must be something wrong with it. We've all seen that, I'm sure. There are many, many stories on the Deep Dive on everybody that's joined this morning that could talk about that. And that's the reality. You know, as we sit here at September 30th, you know, between October, November, December, we have sort of 90 days till the end of the year. I'll say this, I had a quote from Steve Harney, the founder of Keeping Current Matters this morning. He would always say, the character you show over the next 90 days will play a huge part in the reputation you enjoy over the next 10 years. I'll say this too. I believe the character, the work ethic and the way that you show up over the next 90 days will pay tremendous dividends in 2025. We're really talking about finishing this year strong and starting next year stronger. I believe a key to that in this market will be pricing the home right at the listing appointment. You know, we always want to give you so many ways to articulate how to do that. A blog that you can use, a social graphic, a real talk script, all the things that you need to be able to communicate that. Being able to communicate what's important in as many channels as possible right now, I think will make a difference. Listen, I'm gonna wrap the deep dive up on that. Go in and grab these slides if you're a KCM member. If you're not a KCM member, you can go to trykcm.com. You see it right there on the screen. Listen, have a great rest of this Monday. Great to start the week off together talking about the most important thing. We'll see you back again. Kate will be on next week, and I look forward to seeing you soon. Take care.