3 Ways to price a home | Pricing Strategy

I was talking to a seller today about pricing strategy and a concept came up about what we call the ebay game. So basically, there are three⁣
ways to price a home. You can do the endowment effect, where you’re trying to endow upon your marketplace the things worth more than it really is.⁣
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You can use the ebay game, which is, where you undermine what you actually think you’re going to land at to create some negotiation fever or you can put it right around where you think it might end up landing out,⁣
and say, go get it.⁣
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So, the auction game came up and he was like, hey man, as the seller,⁣
what’s my advantage?⁣
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I’m like, bro just close your eyes right now and imagine the classic auctioneer. What they’re trying to create the negotiation fever, and it’s emotional and you get caught up in it. There is a concept called emotional vestige and then there’s consistency. The emotional vestige is the concept of moving in emotionally or buying the furniture before you⁣
get your offer accepted. Consistency is if you write your first offer, you’re ten times more likely to write a second offer in line with the one that you already made. All Provident wins to try to get more money for the home than it’s actually worth. So, it’s a no-brainer for a seller to try to employ⁣
that, take some sand take some salt to play that game. But as long as you know where you’re going to end up, and you understand market velocity and you understand the absorption rates and the pace of what you can expect. You can do that methodically and formulaically.⁣
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Now, the challenge is not on the list side, the challenge is on the buy-side. So you got to have, like, a price negotiation fever-resistant approach that is very tenured.⁣
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You got to be able to have a number in mind, a walkway number if you will. And even though you make some offers and the vestige kicks in and the consistency kicks in, you have the ability to say no, walk grab your chips before they’re all gone or what’s worse, of course, buyers remorse.⁣
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So, gang, that’s the game right now, it’ll always be the game, but it’s definitely exacerbated with the conditions of the market. So, if you have a strategy right now that employs all of that on either side, good job, high five.⁣
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If not, give us a ring or DM us, let’s get you one.⁣
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