– Tips for Using My Market Graphs to Position Yourself as a Luxury Home Expert –
(And, to negotiate more effectively with your buyers and sellers)
To be a true luxury home expert, you must understand what’s happening in your local upper-tier market. One of the best ways to do that is by monitoring local market statistics.My Market Graphs is software designed to take the market data you’ve collected and easily create personalized charts and graphs that you can use to:
* Keep your finger on the pulse of the market
* Clearly position YOU as an expert
* Educate your buyers and sellers
* Add to your negotiating power
You probably already know the average stats for your market, but those numbers don’t provide the specific information you need for the luxury market.
How can you use the information shown in My Market Graphs?
Negotiating List Price with Days-on-Market
Assume you have someone whose property you believe should be listed just under $800,000. They, on the other hand, are convinced the home needs to be priced just above $800,000. Assume your Days-On-Market chart shows a two month difference in selling time between the two price ranges. For an expensive home, the costs associated with carrying that property for an extra two months, plus the inconvenience of a slower sale can be substantial -- especially if your seller is transferring or trying to time a sale with the closing of another property. Dollars saved on carrying costs have the same effect as increasing a seller’s net. This statistic gives you the precise information you need to negotiate price more effectively with your seller.
Negotiating Listing Term with Days-on-Market
This data can also help you make better business decisions. If you are listing a million-dollar property and the data shows a 400 days-on-market average in this price range, you wouldn’t be satisfied with a one year listing because that is probably not going to give you sufficient time to sell in that price range. You’ll want a longer listing term in order to have a fair chance to sell the property. Given the marketing costs associated with a million-dollar-plus listing, it’s expensive if your listing term is too short and the seller doesn’t relist with you. Taking the time to analyze the market gives you the information to make good business decisions such as the listing term to request and the ammunition to negotiate the listing term you want.
Creating Realistic Expectations with Days-on-Market
Average days-on-market will tell you the minimum listing term you want based on the probable sales price. Sharing this selling time expectation with the homeowner at the listing stage will also help your seller develop realistic expectations. This also can open a dialogue about the relationship between price and selling time.
Creating Realistic Expectations with Number of Real Buyers
One of the most important bits of information to gather is the number of closed transactions or real buyers by price range. This chart is easy to create and powerful to use. It plots the number of homes sold and closed by price range for the time period you choose.
Notice the terminology; the chart’s title refers to the number of real buyers by price range. The number of sales (closed transactions) in each price range is the same as the number of buyers who actually purchased homes and closed on them. If you list a $750,000 house does your seller believe that there are buyers on every corner? Usually the seller overestimates the demand in the market. If you will track this statistic and make a simple change in terminology, it may help your seller recognize that buyers for high-priced homes may not be waiting on every corner.
Be sure to talk about REAL BUYERS as opposed to closed transactions or homes sold. Using number of real buyers instead of number of sales with your sellers can be a dose of reality. "In the last 90 days, in the price range where you want to list your home, there have been six real buyers or two per month. And it has taken an average of 175 days of marketing to find each of those buyers." That’s powerful information!
Negotiating List Price with Number of Real Buyers
Let’s assume you have a seller who wants to list at just over $750,000 and you think the list price needs to be a bit under $750,000. You can say to that seller, "In the last six months, in the price range where you would like to list your property, there has been one real buyer per month. However, if we keep it under $750,000 we are in a price range where there have been two buyers per month. We’re doubling the odds of selling your home by listing it under $750,000." When you can justify WHY you are recommending a particular list price and show the seller specific statistics regarding the alternate price ranges, you are educating your seller to the reality of the market. You are also more likely to receive a properly priced listing.
Negotiating for Your Buyer with Number of Real Buyers
You can also use this tool when you represent the buyer. It’s very effective when presenting a contract to be able to show the listing agent and/or seller that, "There were only ten real buyers in this price range in the last month. My buyer is qualified, likes the house, and is ready to purchase. With so few buyers out there, doesn’t it make sense to do this deal?"
Complete the My Market Graphs worksheet and the software will create personalized charts and graphs that will become essential tools as you build your expertise and your business in the luxury home market. You’ll discover lots of ways to use this new service from The Institute for Luxury Home Marketing.