"What Do You Think About the Price?"

I was asked this question two or three times this morning while I was touring new listings in Wilmette, Winnetka and Evanston. I always get a kick out of that question for a few reasons:

1. If an agent asks me that question I wonder if he/she knows what's going on in the market? Or, they could be asking, "How'd I do? This is my first big listing." Either way, I see it as an opportunity for my clients.
2. When another agent has the listing, the only other role I could have is representing a Buyer. Given that role, I'm going to think the price is "too high." (Well, not always, but pretty close to always.) If I represent a buyer who is bidding on the house my obligation to that buyer is to help them get the house at as low a price as we can. No magic there. So almost immediately, we think, "How much do we have to pay?"
3. It may also indicate the agent had a bunch of other agents help price the house and now the listing agent has to live with the price. The days of "group think", getting a posse of agents to price a house, are over. When the market was surging upwards, the trick was to know what the last sale was and price off that transaction. But those days are over. You can rationalize group-pricing all day long but group think does not guarantee an accurate price. To price a house, we try to be much more analytic about it, relying on current market data and our analysis of what the data indicates the market doing. We know a well priced home will sell, quickly and at a good price. (Advice: Sellers, ask for an explanation of the pricing strategy. You're entitled to a statistical explanation that may have a qualitative component. But, please, you need to understand how the price is arrived at.)
4. Last, the very asking of the question implies that the listing agent may have "bought" the listing (meaning, agreed to a price significantly above where it will likely sell). And now the real question is how low will the offers be.

We've worked with a few clients this year who "get it". Their pricing strategy does not begin with, "I need..." or "I have to get ...." Rather, they've asked how to price to get a transaction and how long will it take to sell at that price. (Those deals are already done.)

There is a lot of confusion in the market. If you're a Seller, pricing well is the ticket. Price well and your house will sell and that will be a great story to tell friends. If you're a buyer, get smart about the market direction and you'll see value and be ready to act when it presents itself.

DS