Bryan Vogt: Welcome back everyone to Ready Set Sold. I am your host Bryan Vogt, and I’ve been talking here. Mark Dill of U.S. Bank, he’s joined me today and I appreciate that, Mark. What I left you with was kind of a tease, I’ll admit it, but it was about what are the three things that you need to focus on when pricing your home? And the first one, and once I say the first word, I think Mark, you’ll be able to finish it, and the first word is the biggest, it’s the most well-known real estate line there is: location-
Mark Dill: Location, location.
Bryan Vogt: There you go. That is the number one thing that you as a seller need to focus on, is your location, your location, your location. Once you’ve established your location … and what I mean by that is what is going on on your street? What has happened in your maybe subdivision, but ideally if it’s your next-door neighbor and they’ve sold their home, what is going on there? Understanding location is going to be the factor.
It’s going to be the main drawing point of what is the pricing and what’s going to be happened with your home? And that’s a good thing. Again, you’ve got a good location, you should get top dollar. You should get a fast sale.
It also gives you the ability of … it has so many other advantages to it. Not only does it have the school, so it’s going to be the same school district, it’s also going to have, again, the same HOA. It’s going to have the same different things that maybe people don’t think about, insurance … things like that can be very, very similar, so the pricing, taxes, can be very similar in those properties. They can vary on occasion. Look, don’t ask me to explain how taxes work. I do not know, okay? I don’t know. So, I wish I did. Mark, do you know how the taxes work?
Mark Dill: I wish I did. Yeah.
Bryan Vogt: Yeah. I mean, it’s the mysteries of the universe, but I do know you have to pay them, otherwise bad things happen. But location is the first thing, so once you have a location, what your agent is going to have is he’s going to CMA, which is a cost market analysis. What that really means is, and what you should be focused on, there’s two things. There’s actives and there are solds. What you really want to focus on is the solds. Those are the winners. Those are the success patterns that you want to follow.
So, to kind of give you an example is … And you want to use that three month rule. Go back three months. You can go back further if you have to, but try not to. Again, market change in three months. After six months, they’re useless. If your agent is going back for a year or seven months or eight months, what they’re showing you can do more harm than good. It’ll give you a false impression of what may or may not be going on, and that works both ways.
If the market’s going up, and they’re showing you something seven or eight months down the road, that might not be the price point that you need to be at. The same way is if you’re showing something that the market has shifted, and it does shift in the course of the year, even as you’re moving up.
So, what you want to be looking at is … And ideally get 2-3 solds. Once you have those three solds, or two solds, it’s going to give you range. So, that’s the second thing. So, let’s just say, for the sake of argument, that we have a home in a particular subdivision, and the activity is houses have sold between 225 and 250. It’s very common to have a range. That’s exactly what you’re looking for. So, now you have a range of what top dollar is, because your location is going to dictate that.
Again, square footage is a factor, but it’s not the main thing. The location, location is what’s going to happen, because remember, not only do you have your location, but you have to consider, once you hit the market, you’re going to be spread out to everyone, everywhere. In O’Fallon, and Shiloh, and Bellville, [inaudible 00:04:08], everywhere where the market is, where the buyers are at. So, you want to make sure that you have the right location, because buyers are going to be attracted to that.
So, the third thing, and the only thing you have to do then is decide what pricing that you want. We like to look at it as three different levels. So, let’s just use this example, the 225 and 250. 250 would be at the highest top dollar mark. You can down, most people will split it kind of in the middle, so let’s just say around $237,000 would be another top dollar, but it would be more the middle of the road. Then, the final one would be $225,000, would be the lowest but top dollar.
So now, you as a seller have to make a decision on where you think your house falls into. That then becomes a situation of putting your house on the market for whatever price you have, and again, getting top dollar and also getting a fast sale. It’s as simple as that.
Now, here’s the one thing that comes into play, though. You don’t always have closed properties, and sometimes sellers want to use active properties. I can tell you story after story, one situation particular. That situation, houses were selling between, oh, 175-195. However, there was an active house in the subdivision at 235, and it just hit the market, probably like in a week. Well, the seller’s saying, “Hey, 235, yeah, I know what is selling but they’re asking 235. I match up well. I’ll just do 225. I mean, my goodness, that’s $10,000 difference.”
Long story short, six months later nobody sold the house. Okay? What actually happened was is somebody came in at the pricing that they had, sold the home, and sold their home, and the other two people actually got to be a competition. They started trying to lower the price. So, one would lower their price and the other one lowered their price, okay? Again, I mean, it’s humorous on the one side, unless you’re involved with it and you get locked into that. That’s a good way to not only lose money, because time on the market … Again, the true cost of selling your home.
Again, average 1,500, maybe this situation, 2,000 a month when you put taxes and insurance and HOAs involved, and maintenance and lawn care and utilities. All of a sudden, you’re six months in, you’re $12,000 in the hole, okay? You’re still at the same point where you’re at. You also fall in the problem of being six months on the market. That’s 180 days on the market, and buyers do look at that. Even in hot markets, they do pay attention to that and that can affect your pricing of actually selling it.
So again, if you use those same basic things and if you don’t have it, and it does happen if you don’t have those closed, this is winter again. Experience is so important with then choosing your realtor. Have they seen a home that matches up well to your home? Maybe in another subdivision, even a different town, but it matches up well. The square footage, the school districts match up well and they have sold, and they can kind of give you some idea of where that value is. Not just in idea, but a professional opinion of where they think your house is.
The one thing that you don’t want to do is go off … don’t go off your area. Don’t go off the plantation. Don’t go off the ranch. Whatever you want to call it, that is bad news. You’re going to wind yourself into some serious problems. Stay local, stay very close to where you’re at. I can tell you time and time again, people … Again, most sellers get really confused when the agent does it, but if you’re the seller, don’t try to move your house into a location it’s not. It just doesn’t work that way for a price that you think might work better. Your location is great where it’s at. That’s the direction you want to have. It’s just that simple.
Again, having your agent talk with you, but you have the basic principles, that doesn’t mean there isn’t other items that go into it. I don’t want to make it say it’s completely that simple, but that’s the basis of what you’re looking at. You’re going to have success after you’ve done the updates, and after you’ve done the things that you were going to do anyway and you’re going to have fantastic success. With that being said, I’m going to be talking with Mark Dill. We’ll be talking about the pre-approval process, again, in the next segment. Stay tuned to that. You going to be surprised what you hear about that.
Also, get the book. Go to readysetsold.org, not .com, readysetsold.org, not .com. Get the book. There’s a bunch of other information that’s in there also. Again, you’re listening to Ready Set Sold. I’m your host Bryan Vogt.
Ready Set Sold with Bryan Vogt #05-02: Mark Dill of US Bank: Creating top dollar price range
June 24, 2017