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Power Session 15: Price Right and Present Your CMA
Price to Sell
Roger Higle
Table of Contents
Power Session 15: Price Right
and Present Your CMA................................................. 15-1
Checkpoint.................................................................. 15-2
Report on Your Results.. ................................................................... 15-2
The Daily 10/4............................................................. 15-3
Get Your Head in the Game.......................................... 15-4
Today’s Plan of Action. . .................................................................... 15-5
Gear Up.. .......................................................................................... 15-5
Affirmation of the Day..................................................................... 15-5
Make It Happen........................................................... 15-6
Pricing Overview: Art and Science................................................... 15-6
Pricing Principles and Six Strategies.. .............................................. 15-9
Pricing Strategies Checklist. . .......................................................... 15-17
The CMA (Comparative Market Analysis)..................................... 15-18
What a CMA Is. . .............................................................................. 15-18
Presenting Your CMA..................................................................... 15-19
Aim High................................................................... 15-31
Read and Study SHIFT............................................................... 15-31
Hone Your MLS Skills.................................................................... 15-31
Practice CMAs and Price Presentation........................................... 15-31
Know Seller Financing Options..................................................... 15-31
Never Stop Previewing................................................................... 15-32
Learn to Use Tools Like Absorption Rate...................................... 15-32
Customer Service Focus................................................................. 15-33
Recap What You’ve Done............................................................... 15-34
Get to Work............................................................... 15-35
Your Action Plan............................................................................ 15-35
Your Job Aids. ................................................................................. 15-35
Your Daily 10/4 Assignment. .......................................................... 15-36
Aha’s. . ............................................................................................. 15-37
2. Your Database
7. The Buyer
Consultation
Market Center
Topics
15. Price Right
and Present
Your CMA
6. Prepare to
Work with
Buyers
Market Center
Topics
14. Your Prelisting
Packet
and Listing
Consultation
Tuesday
1.Rev Up
Monday
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
18. Accountability
– Check
in on Your
Numbers and
What’s Next
17. Contract-toClose and
Postclose
Systems
16. Market and
Ser vice Your
Listings
13. Accountability
– Check in on
the 4-1-1
12. Find Seller
Leads
11. Negotiate
Win-Win
Agreements
10. Accountability
– Check in on
Time Blocking
5. Accountability
– Check in on
Your Goals
and Big Why
Friday
9. Make and
Receive
Offers
4. Prospecting
Thursday
8. Find and Show
Homes
3. Open Houses
Wednesday
Ignite Power Session Training Calendar
Power Session 15: Price Right
and Present Your CMA
You are here!
15-1
Checkpoint
Report on Your Results
STOP
and DO
Your Daily 10/4
Four Habits
Build and Manage Your
Database
Add 10 people to your
database.
Prospect
Connect
with 10 people.
Follow Up
Write 10 notes.
Know Your Market
Rating:
Results/
Ratings
Daily Goal
Wins and
Opportunities
Preview 10 homes/week.
() Met the goals of 10
() Exceeded the goals of 10
(–) Didn’t quite meet the goals of 10
Time: 1 minute
STOP
and DO
Your Milestones
Milestones
Results
Appointments
Agreements Signed
Contracts Written
Contracts Closed
Time: 1 minute
15-2
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
The Daily 10/4
1. “Power Up” and get a head start on today’s 10/4 goal.
• Watch the KW MAPS Coaching daily Power Up video
with Dianna Kokoszka.
• Shout this affirmation:
My business is growing abundantly!
2. Use the scripts you’ve been practicing from earlier sessions.
• Ask your Mets for referrals—leads as well as business
resources.
• Invite people to your open house.
• Interview potential Allied Resources.
3. Smile and dial!
• Make as many calls and write as many corresponding
note cards as you can in 15 minutes.
4. Your results count toward your Daily 10/4! Be sure to
include them in myTracker.
Real-Play Results
I made _________ calls.
I made _________ connections.
I got _________ referrals.
I got _________ appointments.
What went right?
What were the challenges?
TIP
Find KWConnect on
mykw.kw.com. Search
for “power hour.”
How can you power through the challenges next time?
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-3
Get Your Head in the Game
Win for ...
You:
You win sellers’
agreement on a
list price for their
proper ty that will
get it sold and
generate income for
your business.
Your Customers:
They get a sale
of their home for
the most money
possible in the least
amount of time.
Beginning in Power Session 1: Rev Up, you’ve been learning the
dominant role your mindset plays in success in real estate sales.
Pricing also has a large mindset component, both for you and your
seller.
The first part of your job in pricing is to get into the heads of
buyers and sellers so you understand and empathize with what
both are thinking.
T
ony DiCello, director of KW MAPS
Coaching, describes the pricing tug-ofwar, and its psychological components,
very clearly, “Sellers and buyers are typically
out of sync with the realities of the market. In
a sellers’ market, sellers tend to dwell on the
future—higher prices—and buyers in the past—
lower prices.” To this, he adds, “Sellers want to push prices up and
buyers want to hold the line. In a buyers’ market, buyers want to
place themselves in the future—lower prices—and sellers want to
dwell in the past—higher prices.”
Buyers want to push prices down and sellers want to hold the line.
The net result is a gap between a buyer and a seller’s perception of
what a home is currently worth. Your job as a listing agent is to close
this gap.
Countdown to Payday
Leads
Price Right and
Present Your CMA
Appointments
Agreements
Contracts
Closings
$
15-4
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Today’s Plan of Action
This Power Session gets you going in five easy steps.
1. Study the fundamentals of how markets work.
2. Discover the top pricing strategies to guide you when you
price any property.
3. Learn to prepare a Comparative Market Analysis (CMA).
4. Learn scripts to present price and handle pricing
objections.
5. Discover standards and techniques that will help you
deliver a great presentation of your CMA and your price
recommendation.
Gear Up
Here are the items you’ll need to complete the exercises in today’s
session:
eEdge Listing Consultation pages
Your instructor will provide a property to price for the pricing
exercise, plus comparable properties data and supporting property
detail pages from the MLS.
Affirmation of the Day
I have a successful business that improves
everyone’s lives, including mine!
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-5
Make It Happen
TRUTH
Pricing is a
competitive skill. Be
better at it than other
agents, consistently,
and you will win more
listings and more sales.
Comparative
Market
Analysis
A process by which a
proper ty to be priced
is evaluated against
other comparable
proper ties (recent
and pending sales,
and active listings)
to determine a
recommended list
price.
Pricing Overview: Art and Science
Grasping the mindsets of buyers and sellers is important. However,
the psychology of markets—what sellers and buyers are thinking
about the market—is just one dimension of pricing.
As SHIFT points out, pricing is a bit like the famous game show
“The Price Is Right.” Sellers want to go as high as they think they
can without losing a sale. Buyers want to go as low as they can
without losing a chance to buy what they want. What buyers and
sellers hope for plays a role, but hope is not a strategy.
The good news is that pricing is also a process. Learning to do
it well also requires knowing pricing strategies based on the
principles that drive markets. It also requires knowing pricing
tactics—comparative market analysis (CMA) building and
presenting, and the scripts that go with it.
Pricing is one of the very few absolutely essential real estate success
skills. To become a pricing expert, you must know:
1. How markets work
2. Local market conditions
3. Pricing criteria and how to apply them
“The ability to
learn faster than
your competitors
may be the only
sustainable competitive
advantage.”
Arie de Geus
Corporate Strategist
15-6
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
1. How markets work
Two principles about markets and value provide a great
foundation for pricing any real estate:
• Market Dynamics: Markets operate on the law of supply
and demand. When supply is high and demand is down,
prices fall. When supply is low and demand is up, prices
increase.
• Determination of Value: Value is established based on an
agreement between a willing seller and a willing buyer.
The tug-of-war is always between what the seller wants and
what the buyer is willing to pay.
2. Local market conditions
To price accurately and price to sell, you must constantly
study the conditions in your local market and in the specific
neighborhoods where you want to specialize. Here are some basic
factors to watch:
• Inventory: How much is for sale, and is inventory rising or
falling
• Days on Market: How long it is taking properties to sell
• Price per Square Foot: A good comparative indicator of
prices—when a group of properties has common qualities
and features
• Changes in the Local Landscape: Monitor changes in
shopping, schools, other services in the community, and
changes in local laws that impact housing
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Buyers’ Market
A market which has
more sellers than
buyers. Lower prices
result from this
excess of supply over
demand.
Sellers’ Market
A market which has
more buyers than
sellers. Higher prices
result from this excess
of demand over
supply.
TRUTH
Moving sellers’ and
buyers’ pricing from
psychology and
emotion onto a factbased playing field is
your challenge as an
agent.
15-7
3. Pricing criteria and how to apply them
Getting to the facts in pricing means evaluating a given property
against other apparently comparable properties—considering these
additional factors:
1. Location
2. Size
3. Amenities
4. Condition
STOP
and DO
Time Block to Preview with Price in Mind
When you preview properties:
TIP
Top listing agents
understand the
impor tance of scarcity,
which is a refinement
of all the criteria.
Proper ties with unique
characteristics may
be very difficult to
find comparables
for anywhere in the
area—and their value
will increase as a
result.
1. Look in the MLS at comparable properties in the area before you
preview a home, or immediately afterward.
2. As you walk through the property, evaluate the home’s list price.
How would you price that property based on location, size,
amenities, and condition? Take notes about what you see.
3. Did the listing agent get it right? Why or why not?
Open your calendar now and time block property previews for the
coming week with pricing in mind—at least 10 property previews per
week as part of your Daily 10/4. Be prepared to discuss your findings at
the next accountability session.
Time: 1 minute
In a smaller
community, an
example might be a
hilltop ranch home
on acreage and in
pristine condition—
with a great view, 5
bedrooms, 4 baths,
and a beautiful pool. It
might be the only such
proper ty in the area.
15-8
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Pricing Principles and Six Strategies
It’s very important to grasp the six critical strategies that set the
stage for using pricing criteria effectively. These strategies are
standards you need to bear in mind as you approach pricing any
property.
With practice, you will absorb and internalize them. They will
become part of you as a real estate agent—and make you an
outstanding adviser to both buyers and sellers.
1. Know what sells
There’s little point in winning a listing if it does not sell. To get a
home sold for the most money in the least amount of time, it must
be priced “in the market.” There are two determining factors:
“Properties that are
appropriately priced
for their market will
always make the best
impression. They’ll be
the first shown, the
most talked about, the
first to receive offers,
and the most likely to
sell.”
SHIFT
• Price
• Condition
To sell, a competitively priced property must also present itself to
buyers in the best possible condition—outside and inside the home.
There is a full discussion of property condition and staging homes in
the next session, Power Session 16: Market and Service Your Listings.
The following graphic appears in the eEdge Listing Consultation
Guide and also in the book SHIFT. It’s a powerful way to capture
for sellers the combined selling power of the right price and great
property condition.
TRUTH
Home sales are both
a price war and a
beauty contest. In
other words, your
listing’s price and
its condition vs.
competing proper ties
will make or break its
chances to sell.
Above 100%
Price vs. Comps
TIP
Out of the
Market
67%
Smart listing agents
know that there are
really only two types
of proper ties on the
market:
No Man’s
Land
33%
Below
1. Those priced right
in good condition.
In the
Market
67%
Great
33%
0%
Condition vs. Comps
Poor
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
2. The rest of the
proper ties; they
help other listings
sell!
15-9
2. Know what the seller can and can’t control
An important part of the pricing process is to help your sellers
understand that agents and sellers do not determine the purchase
price of their home. Instead, the market determines the price.
Pricing to sell is based on understanding what is selling. Use the
simple script below:
Leverage eEdge
The “Pricing
Misconceptions,”
“Weeks on Market,”
“Pricing Triangle,”
and “Price vs. Time
on Market” graphics
that follow all
appear in the eEdge
Listing Consultation
Guide. The guide
is a pre-built listing
presentation you
can use to talk with
sellers about how
markets work, what
sells, and how price is
determined.
Mr./Ms. Seller, some of the things you can control
during the selling process are the condition of your
property, the availability of your home for showings,
and your positioning in the market. In the end, value
is determined solely by what a buyer is willing to pay
in today’s market, based on comparing your home
to others currently on the market for sale. I don’t
determine value and neither do you. The market
determines value. Does this make sense?
Pricing Misconceptions
What
You
Paid
What
You
Need
What
You
Want
What
Your
Neighbor
Says
What
Another
Agent
Says
Cost to
Rebuild
Today
The point is that all these things sellers wish would be true simply
aren’t true. Selling price is an agreement driven by what a qualified
buyer is willing to pay!
15-10
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
3. Understand the window of opportunity:
it doesn’t last long
Sellers need to know that there is a window of opportunity during
which they have the best chance to sell their home—it’s when it
first comes on the market.
New listings get on the radar of active buyer agents and online
consumers quickly. Poorly priced listings, even new ones, fall off
those same radar screens with amazing speed.
How long is the “window” open? Everything depends on your local
market situation; however, a good rule of thumb is 30 days. Most
offers are likely to be received in the first 30–45 days.
TRUTH
The first time a buyer
sees a listing in person
is the single best
chance to create the
impression that will
sell the home.
The following graphic from the eEdge Listing Consultation Guide
shows how interest climbs rapidly when a listing hits the market,
and declines quickly after the first month.
Weeks on Market
Activity
Level
When Most
Offers Are
Received
1
2
3
4
5
6
7
8
9
10 11 12 13
Weeks On Market
Source: eEdge Listing Consultation Guide
TRUTH
Pricing right is about
attracting buyers—
now!
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-11
The percentage of buyers who will look at a property increases and
decreases in direct proportion to the property’s price compared to
market value. Pricing above the market does not get you showings;
pricing at or just below the market does.
Pricing Triangle
Asking Price
15% Above
% of Potential Buyers Who
Will Look At the Property
10%
10% Above
30%
Market
Value
60%
10% Below
75%
15% Below
90%
Source: eEdge Listing Consultation Guide
TRUTH
Time is the enemy of
price when it comes
to listings.
If the market is declining, this is certainly the case. But even in a
market that’s relatively flat, or increasing, the longer a listing sits
on the market, the less demand there will be.
Price vs.Time on Market
Price
Market
Value
Length of Time On Market
Source: eEdge Listing Consultation Guide
15-12
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
4. Price to reflect market movement
If the market is declining, time is definitely the enemy of price.
It is also an art—the art of persuasion. Choosing the right
comparable properties is a big step in the right direction. But
there’s much more to it. Your job as the listing agent is to persuade
your sellers how the right price impacts the marketability and
salability of their home.
TRUTH
Successful pricing
means getting the
maximum price now.
Marketability and salability are also determined by the following:
1. Market Direction: Whether market prices move up or
down
2. Market Speed of Change: How quickly they are changing
and what the rate of change is
Draw and Use the “Best Price Is Today’s Price” Diagram
STOP
and DO
Review the Coaches Corner below and then practice Tony’s suggestion work with
a partner, and draw the diagram as you describe how time will impact the sale
price of their property. Then reverse roles.
Time: 3 minutes
KW MAPS Coaches Corner with Tony DiCello
KW MAPS Coaching Director Tony DiCello teaches a simple
diagram for communicating with sellers in a declining market.
He stresses that creating a simple illustration by drawing it
yourself helps build your credibility with sellers.
Draw a simple chart like the one below by hand as you talk with
your sellers. (This is an example to use in a declining market.)
This Month
Month 2
Month 3
Month 4
The best
price is
today!
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-13
5. Don’t chase the market, price ahead of it
Declining market
AVERAGE HOME PRICE
When prices are falling, sellers make a huge mistake by pricing too
high, hoping to attract the offer they want—and thinking they
will drop the price later if that strategy doesn’t work. The reality is
that most sellers who do this never correct enough to keep up with
price reality. Sellers who price right will get the buyers, and the
listing that’s “chasing the market down” will likely never sell. This
graphic and the one below appear in SHIFT.
$
Price Seller
Wants
Price
Correction
Price
Correction
They
Never
Get It
Home Values
Are Falling
TIME ON MARKET
Rising market
TRUTH
AVERAGE HOME PRICE
Don’t chase the
market, let the market
chase you.
In a rising market, sellers who feel time is on their side may price
above the current market and hope the market will “catch up” and
bring them the price they want—provided the market continues
to rise. Sellers who want to cash in on improving prices in rising
markets are still well advised to price at the market to get a sale
now—and move on with their lives.
$
Price Seller
Wants
When They
Get It
TIME ON MARKET
15-14
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
6. Don’t be afraid to be brutally honest
Pricing right is hard work and it’s not for the faint of heart. But
it’s worth it because it gets your sellers to their goals, and you
make money for your business.
“Brutal honesty” is how SHIFT describes your best approach. Be
considerate, but do not mince words about the market, and price
their property to reflect the market.
Pricing right means telling the truth about what can be tough
topics:
1. Market conditions
2. Property condition, features, amenities, location
3. Buyer and buyer agent feedback
4. Comparable property sales
Be honest
TRUTH
You do not make the
market. Your job is to
show sellers how to
get their home sold
in the market. This is
what they expect.
Here’s a short script to address pricing honestly.
Do you want me to tell you the truth, or do you
want me to tell you what you want to hear?
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-15
STOP
and DO
Pricing Strategies
Work with a partner or partners.
Put the essence of the critical pricing strategies below in your own words.
Take no more than 1 minute of explanation per point and challenge
yourself to communicate only the basic idea. Refer to the preceding pages,
as needed.
1. The four factors that drive price
__________________________________________________________
__________________________________________________________
2. What sells
__________________________________________________________
__________________________________________________________
3. What the seller can and can’t control
__________________________________________________________
__________________________________________________________
4. The window of opportunity
__________________________________________________________
__________________________________________________________
5. Pricing is about market movement
__________________________________________________________
__________________________________________________________
6. Don’t chase the market
__________________________________________________________
__________________________________________________________
Evaluate one another’s presentation of these points. Make suggestions.
How did you do? Did you get the basics across?
Be prepared to share what worked well and what didn’t with the class.
Time: 10 minutes
15-16
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Pricing Strategies Checklist
Use this checklist as you work on pricing a property—whether it’s
a previewed property, for practice, or a property you plan to list. It
will help you learn the disciplines you need to internalize:
Six Pricing Strategies
Yes
1. Know what sells – always evaluate for both
competitive price and marketable condition
Free Download
This checklist is available
in the toolkit on the
Ignite course page at
kwu.kw.com/ignite.
2. Know what sellers can and can’t control –
communicate what does not matter in pricing
(what they paid; what they need; what they want;
what their neighbor sold for ; what another agent
says it’s wor th; cost to rebuild)
3. Understand the window of opportunity – be
persuasive about the impor tance of pricing right
the first time, and being in great condition, to
capture peak interest in the first few weeks on
the market
4. Price to reflect market movement – price to
reflect the direction the market is moving and the
speed of change
5. Price ahead of the market – price so your seller
does not get caught chasing the market down, or
does not miss their maximum oppor tunity in a
rising market

6. Don’t be afraid to be brutally honest – ask, “do
you want me to tell you what you want to hear,
or do you want to hear the truth (about price
and condition)?”
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-17
TRUTH
In addition to price,
what makes a
proper ty comparable
to another falls
in four main
categories: location,
size, amenities, and
condition. Then you
must factor in when a
proper ty sold, when
it became a pending
sale, and active listings.
TIP
Comparable
proper ties will be
more or less easy to
find, depending on
overall supply. When
comparables are in
short supply, you may
have the challenge of
extending your search
area, or modifying
other criteria, to get a
better handle on price.
The CMA (Comparative Market
Analysis)
You’ve seen that pricing property is both science and art. The
science of it happens in the CMA—a comparison of a property to
other similar properties.
What a CMA Is
Your CMA is where you dig into the relevant market facts and
put the principles, strategies, and criteria to work. The result is a
package of information you present to help sellers understand and
accept the right price for their home. The CMA process includes
the following:
1. Search: Search the MLS for properties that correspond to
the property you are pricing using the four main criteria—
location, size, amenities, and condition.
2. Select: Select a small number of recently sold properties,
and properties pending sale, that you believe represent the
closest comparisons to your seller’s property. The number
of comparables available will be impacted by market
conditions.
3. Decide: Decide on a price to recommend to your seller that
takes into account:
a. The comparables
b. Your seller’s motivation and goals
4. Display: Display the most relevant data in a simple,
readable format for your seller—so you can review with
them why you’ve chosen the price you are recommending.
What is a CMA physically? It can be pages in a binder, or a flipbook, or a series of presentation screens in your laptop or tablet.
These pages or screens are designed to help you walk the seller
through the comparative process you went through—to arrive at
your recommended list. What you can show can include:
• A larger sample of possible comparables
• A narrowed-down version of that list, helping you
explain how you chose the final set of the most relevant
comparables to price with
15-18
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
• Detail pages from the MLS for the final set of comparables,
to help you talk through why you valued specific features
of the sellers’s home as you did.
• A summary page with your recommended list price, as a
total price and as a price per square foot, shown alongside
the current competing listings addresses and their list
prices.
Presenting Your CMA
Your CMA is really a summary of your research process, displayed
in a format to be presented easily and clearly to support your price
recommendation. Your presentation should be supported by:
1. Visuals: Clear and proven visuals that explain how
markets and pricing work
2. Scripts: Scripts that help sellers understand what the
CMA is and what it is saying
Leverage eEdge
Most of the graphics
used in this Power
Session appear in
the eEdge Listing
Consultation Guide.
Be sure to go through
it and become familiar
with ever y page. It has
been created to help
you build your own
listing consultation
template—one
you will modify as
your pricing and
presentation skills
develop.
Scripts for presenting price
Here are some proven scripts for presenting price:
Positioning your expertise
If you went to a doctor and the doctor told you that
you had a terrible disease, would you want to be told
the truth, or would you rather be told, “Go home and
enjoy.” Of course, you would want them to tell you
what you had and what to do to get better. Well, I am
the professional, like a doctor, and I am telling you the
market shows we need to price it right. Otherwise,
you are going to have a terrible disease called “no
showings.” And when you have no showings in a
market that is going down every month, you are losing
money daily. You want the most money, don’t you?
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-19
Explaining CMA
Mr./Ms. Seller, would you like to obtain the highest
price possible for your property?
If “no,” dig deeper. If “yes,” continue.
To achieve the highest price possible, you must have
maximum exposure to the marketplace. The most
important decision you will make in this respect is
where you decide to price your property. The way
most sellers establish their listing price is with a
Comparative Market Analysis, what we call a CMA.
(take out your CMA pages)
As you can see from this CMA, the average market
time in our area is 60 days*. This means that if you
want to sell your property in less than 60 days, you
have to be in the top 50 percent in terms of price
and property condition. To sell in 30 days, you’ll have
to be in the top 10–15 percent in terms of your
price and property condition.
*You will need to find out the correct numbers for your
marketplace and customize this script.
Explaining the concept of percentage of buyers viewing
home vs. asking price
This graphic (show them the triangle graphic) shows
the percentage of buyers who will see your house
based on whether your home is priced at fair
market value, below market value, or over market
value. As you can see, if you price your home at
fair market value, 60 percent of qualified buyers
will see it. However, if you price it just 10 percent
over market value, you cut that number in half—
only 30 percent of the qualified buyers will see it.
That means that 70 percent of the buyers who are
qualified in terms of criteria and price range will not
see your home!
15-20
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Determining the list price
Mr./Ms. Seller, the most important decision you will
make is where you will price your property. Pricing
your home at fair market value will attract more
buyers. Attracting more buyers normally results in
a higher purchase price. Overpricing your home
results in a longer market time and possibly a lower
price.
Would you like to price your property to sell quickly,
or will you price your property where it could take
longer to sell? The choice is yours. What would you
like to do?
Role-play the preceding scripts for presenting price.
Time: 5 minutes
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Role
Play
15-21
Scripts like these will help pave the way for a pricing discussion.
However, sellers are still likely to raise questions or have objections—
as they get their heads into what you are sharing with them.
Seller Objections – Pricing
Watch the video of pricing objection-handling scripts.
Time: 5 minutes
Objection 1:
We need a certain amount from this sale to buy our next home.
Will you as a buyer pay what the seller wants because
that’s the price they need? No, you’ll pay what it’s
worth, right? That’s what your buyers will do too.
Objection 2:
Can we price a little higher and come down later?
Option 1: Here’s what frightens me about pricing
higher. People who have seen many houses will find
yours and think it’s right, but they won’t look at it
because of the price. We don’t want to drive buyers
away; we want to attract buyers. We want them to
make offers. Does that make sense?
Option 2: The greatest number of showings comes
in the first three weeks. If they see the house is
overpriced, they walk away and we don’t get them
back. Let’s get one or more people to make an offer
right away. If more than one likes your price, they
might even compete and drive it higher. Wouldn’t
that be great?
Objection 3:
How can we be sure the price you’re recommending is the right price?
Have you ever bought a stock? How do you know
what it’s worth? When you’re selling a stock, you
check the market prices. You know what you paid
for it, but the market doesn’t care. Real estate is a
commodity today. The market says what your home
is worth. Why would a buyer reach into their own
pocket and pay more than the market says it’s worth?
15-22
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Objection 4:
We were hoping to get more for our home.
Do you understand the law of supply and demand?
When supply is up and demand is down, which way
do prices go? What supply do we have now? Right,
that’s why prices have gone down. It’s a law, not an
idea. Do you defy the law of gravity? We can’t defy
this law either. Let’s price it right and get it sold now.
Seller Objections – Pricing
After the video, role-play with a partner each of the pricing objectionhandling scripts.
Time: 7 minutes
Price recommendation:
a joint conclusion with the seller
Presenting your price recommendation is the end of a process.
Show the sellers the following data pages that illustrate your
conclusion:
1. Longer list of recent listings and sales: Listings sold,
pending, and active from their immediate neighborhood,
covering a recent time period, usually the last 30 days
(depending on the market)
Tip:Use actual MLS printouts.
2. Properties you have selected from the larger group: A
shorter list of the most comparable properties to their own
that you’ve selected from that list
Tip:Print a separate list, or use a yellow highlighter on
the original list.
3. Property details for each of your selections: Detail sheets
(usually one page each) for the handful of most comparable
properties
Tip:Print these from the MLS.
4. Conclusion: A summary page (see sample in the eEdge
Listing Consultation Guide on the following page) that
pulls your conclusions together supporting your price
recommendation
Role
Play
TIP
When sellers want
to go above your
recommended price,
be sure they know that
any offer they accept
must meet the test of
the buyer’s professional
appraisal. A price that
won’t appraise is a
price that won’t be
paid in most cases!
TIP
Price per square foot
can be a valuable
tool, but only when
comparables are
very close together
(homogeneous) in
terms of features,
age, condition, and
location—proper ties
in a newer subdivision
would be a good
example.
Tip:Create a custom page following this model in the
eEdge Listing Presentation.
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-23
TRUTH
For the seller, your
price recommendation
should feel to the
seller like a conclusion
you have reached
together, after looking
at comparable home
data.
You have walked the sellers through your pricing analysis by
sharing data about comparable properties, and considerations that
you used to reach your conclusion—including facts about their
own home.
Enter Client Name
Pricing Your Property
This is about strategy.
I have based your recommended price on:
• A detailed, custom market analysis
• The unique characteristics of your home and its setting
• My expertise in the real estate market
My primary goal is to net you the most money possible.
I believe this pricing plan, matched with my 14-step marketing plan, will draw agents and buyers to
your home and position it as a highly appealing, highly competitive property.
Average Sales Price: $
Average Sales Price ($ / sq ft): $
Recommended List Price: $
Recommended Sales Price ($ / sq ft): $
Keller Williams Realty International
1221 S. Mopac Expy Ste 400
Austin, TX 78746
Each Office is Independently Owned and Operated
15-24
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Valuing features of a property
Certain features of a home may add to or detract from its value
alongside other comparables.
However, this is a very local matter and an advanced pricing skill.
The best way to understand these valuation issues is to do the
following:
• Get the input of experienced listing agents in your Market
Center or from your Productivity Coach.
• Develop your own valuation skills though an ongoing
commitment to previewing homes and watching sales
activity closely—especially in any area or property type you
want to specialize in, or in your chosen farm area.
• Consult online resources. Many metro areas or regions
have housing blog sites that share information about the
approximate value of improvements or property features.
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
TIP
The appeal and
value of green
improvements is
growing. The Keller
Williams Realty
publication KW Market
Navigator repor ts that
70 percent of buyers
surveyed say they are
at least somewhat
familiar with green
aspects of real estate,
and 9 in 10 perceive
that environmentally
friendly homes offer
more value than the
same homes without
green features.
15-25
STOP
and DO
Price a Property
The goal of this exercise is for you to determine a recommended price on a
property—a property your instructor has chosen for the exercise.
You will use:
• Details of the “subject property” to be priced
• Line-item data on a short list of comparably priced properties from the
MLS
• Details sheets on the comparable properties from the MLS
Work with a partner and take turns. Follow the CMA approach outlined in
this session.
1. Evaluate your chosen property against the comparables based on the
four major determining factors for price:
a. Location
b. Size
c. Amenities
d. Condition
2. Note at least one factor in each category that impacted your evaluation
against the competing properties. Did you assign a dollar value to any
of these factors? If so, what was it?
3. Form your price conclusion and be prepared to defend it to the class,
including factors you and your partners agreed about or disagreed
about as you chose a price.
Time: 15 minutes
15-26
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Property Pricing Worksheet
Proper ty
Location
Bedrooms,
Baths, Sq. Ft.
Amenities
Condition
Price
Subject Property
Comparable Properties
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-27
Use a seller’s net sheet
TIP
Your CMA has
competitive value—
to other agents. The
best listing agents
advise that you not
leave your CMA at
the seller’s home.
Instead leave your
price recommendation
and a copy of the net
sheet you prepared
for them.
Sellers want to know the price their home will list and sell for, but
they also want to know what they will walk away from the sale
with—in their pocket.
To do this, always prepare a seller’s net sheet. It shows them:
• Selling price
• Closing costs deducted
• Commission deducted
• Other fees deducted (as estimated by the title company)
• Any other costs agreed to be paid from the proceeds of the
sale at closing
Seeing the bottom line in black and white—although it is only an
estimate—helps sellers realistically look at how the transaction will
benefit them. It helps them plan realistically for their next steps.
Here’s a seller’s net sheet provided for Ignite by Chris Heller:
15-28
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
A note on overpriced listings
To build your listing business, you must, of course, take listings.
One of your bigger challenges will be dealing with sellers who are
difficult to persuade about the right price for their home.
This is a common problem, based in human nature. We all want
the most money we can get when we sell something, especially
when it’s probably our biggest asset. Even when their personal
needs and goals dictate they should sell in a given time period, it
can be tough for sellers to let go on price.
Some agents take the listing even when sellers have refused to
accept the right list price. These agents argue that:
• Marketing listings attracts buyer leads anyway
• Sign exposure creates the perception that you, the agent,
have market share in listings in that town or neighborhood
This may well be true, but there is a downside—you do not want
to be perceived as the agent whose listings do not sell!
Overpriced Listings – Pros and Cons
Pros
Cons
A marketing exposure
A liability in terms of your
oppor tunity for the agent that
time, money, and reputation
should not be ignored
Overpriced listing will still
generate some buyer leads
You are better off focusing on
listings that do sell while also
generating buyer leads
Chris Heller says, on balance, these arguments weigh toward
avoiding overpriced listings.
Pros
Cons
Avoid this listing when the cons outweigh the pros.
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-29
A note on short sales
and bank-owned properties (REOs)
TRUTH
Where shor t sales
and REOs are a
majority of the
market, they may set
market prices for
most homes. Where
they are a small
percentage, their
prices may represent
a discount for buyers
compared to other
listings.
FURTHER
STUDY
The downward market movement of recent years created what
SHIFT calls “market of the moment” conditions with special
circumstances and seller situations. Most of these involve
distressed sellers trying to avoid foreclosure, or bank-owned
foreclosures (REOs) on the market.
Both types of properties may well be priced below other
comparable homes in the market.
The extent of the price discount in these properties depends on
how predominant they are in your area, or in a neighborhood.
Listing short sale properties or REO properties are specialties
requiring special skills and resources. Either can be the foundation
for a great business, if your market includes a significant
percentage of distressed properties.
Consult your Team Leader and Productivity Coach, as well as any
short sale and REO specialists in your Market Center, to learn
more.
KWU Listing Short
Sales Course
This course is a free
download online. It’s
called “SHIFT Tactic 11:
Distressed Proper ties:
Listing Shor t Sales.” It
includes a shor t sale
listing checklist that is
a great over view of
what is involved in a
shor t sale transaction,
for both the listing and
buyer side agents.
There is also an
accompanying course
called “SHIFT Tactic 11
Distressed Proper ties:
Listing REOs.”
15-30
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Aim High
How do you move your skills in pricing and presenting price to
higher and higher levels?
Read and Study SHIFT
Read SHIFT cover to cover, and then read it again. It
was written for the major market downturn of 2005
and beyond, but it is recognized as a great pricing
primer for any market. The chapters “Tactic #7: Price
Ahead of the Market” and “Tactic #8: Stand Out from
the Competition” are especially helpful on pricing and
property condition.
Hone Your MLS Skills
Block time to get on your local MLS system and become swift and
skilled in using it to analyze prices and the factors that drive them.
Practice CMAs and Price Presentation
Produce and deliver practice CMAs with an accountability partner.
Pick a home in a subdivision that’s already listed—perhaps
one you’ve recently previewed. Be sure your partner previews it
too—then price it and compare prices, rationales, and key price
presentation points. Do lots of these practice sessions.
Know Seller Financing Options
TRUTH
Practice your pricing
and price presentation
skills regularly with an
accountability par tner.
You do not want to
practice your skills
with sellers!
There are a lot of things sellers can do with financing offers to
make their listing more attractive to buyers. Get a referral from
your Team Leader or Productivity Coach to a great local lender.
Block time with them to learn about seller opportunities like
these:
• Seller concessions or contributions
• Seller buy-downs
• Owner financing
• Lease option and lease purchase agreements
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-31
TIP
Absorption rate is a
picture of the rate at
which homes are selling
at a point in time. It’s
to compare market
activity in time periods
—to show which way
the market is trending
in a particular area,
or across the entire
market.
Never Stop Previewing
When Ignite ends, you will have developed a number of great
habits. One of them should be previewing property—never stop
previewing! To price competitively and successfully, you must know
your inventory. It’s tempting to revert just to scouring the MLS.
Don’t fall into that trap. You want sellers—and buyers—to know
you can answer at least some of their questions by referencing
details of properties currently or recently on the market.
Learn to Use Tools Like Absorption Rate
Remember—market conditions are created by supply and demand.
As you progress, you will learn some tools for communicating
with sellers about market activity in their area.
A great starting point is to talk about “absorption rate” in the
market. Absorption rate is based on a simple formula. It relates
how many homes are actively listed on the market to the number
of sales in a recent time period:
Number of active homes on the market
Number of sales in the last 30 days
= Absorption Rate
(months of inventory
at current sales rate)
Here’s an example that shows how absorption rate might show a
market trend:
TIP
The absorption rate
can be used to show
a seller how long, at
minimum, your listing
agreement with them
should run. You should
be given at least
the average amount
of time it takes a
home to sell in your
market—or more.
15-32
In May, there were this many months of inventory:
44 active homes on the market
27 listings sold in the last 30 days
= 1.6 Months
In July, there were this many months of inventory:
59 active homes on the market
21 listings sold in the last 30 days
= 2.8 Months
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
In September, there were this many months of inventory:
74 active homes on the market
17 listings sold in the last 30 days
= 4.3 Months
Conclusion: In just five months, absorption of inventory tells us
there has been a considerable slowdown in the market.
Customer Service Focus
Sellers need your services to arrive at a list price for their property
that will get it sold. Making a persuasive presentation of the price
you know will get it sold is your most important job within the
overall listing consultation.
Master your pricing and price presentation skills. Listings that
attract offers and produce contracts that close are what puts that
“Sold” sign in the yard (and online). A “Sold” sign is your proof to
the world that you are an agent who gets the job done for sellers.
It’s the best testimonial you can have!
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-33
Recap What You’ve Done
With the information and exercises in today’s session, you have
accomplished the following:
Well
Done
15-34

Completed Lessons and Tasks

Discovered the principles of how
markets work and how to price
proper ty—including what it means to
“price right” and how doing it is the best
assurance of getting your listing sold.

Learned what a CMA is and how to put
one together.

Learned techniques and scripts for
presenting your CMA, including your
price recommendation, to the seller.
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Get to Work
Your Action Plan
Time block and complete the following activities before the next
Power Session.
Done
My Action Plan
By
When
Time block your calendar.
• Preview homes in your area(s) of
specialization on a weekly basis.
• Practice your CMA with an
accountability par tner.
Identify people from your Mets A+ group
with whom you can practice presenting a
CMA on their home. Also practice CMAs
with an accountability par tner.
Practice pricing with a script par tner.
Remember to have lead sheets handy at all
times, for when you get into conversations
with potential sellers.
Prepare for Power Session 16: Market and
Ser vice Your Listings
As always, also bring the following items:
• A copy of the Four teen-Point Marketing
Plan from the eEdge Listing Consultation
Guide
• Your database
• Your phone
• Your daily planner
• Your Daily 10/4 tracking and results
Your Job Aids
• eEdge Listing Consultation Guide
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-35
Your Daily 10/4 Assignment
In your calendar, time block and then complete the following
activities before the next Power Session.
15-36
Four Habits
Daily Goal
Build and
Manage Your
Database
Add 10 people to your database.
Prospect
Connect with 10 people.
Follow Up
Write 10 notes.
Know Your
Market
Preview 10 homes this week.
Done
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
Aha’s
STOP
and DO
My Aha’s
1. Write down your three most powerful aha’s from this Power Session.
1.
2.
3.
2. Share one aha with the class.
Time: 5 minutes
Ignite Power Session 15: Price Right and Present Your CMA – v3.3 © 2011 Keller Williams Realty, Inc.
15-37
Ignite Correction and Suggestion Log
Instructor Name: ________________________________________________ Date: ________________
Market Center: _________________________________________________
Content Type
(instructor manual, student
manual, job aid)
Page
Type of Correction
(misspelling,
wrong reference to
Number
resource, etc.)
Power Session #: _______
Description of
Correction or Suggestion
Suggestions for this Power Session:
__________________________________________________________________________________________
Please send this completed form to KWU
email: [email protected], attn: KWU Ignite
fax: 512-328-1433
mail: 1221 South Mopac Expressway, Suite 400 Austin, TX 78746