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Stage 2 Defined : Market Awareness

Stage 2 Snapshot

The Scenario








Your Market Awareness is pivotal to your success. Collaborate with your Agent to come up to speed quickly.
As a Seller, focus on your Home Value Profile (below).
As a Buyer, focus on your Client Value Profile (below).

The more prepared you are in this stage, the more success you can expect.
 
MARKET AWARENESS

The Strategy

Whether you're buying or selling, strategically position yourself/your home to maximize your market value  before entering the market.

Maximize your Home Value Profile to maximize your home's perceived market value or Market Price.


Maximize your Client Value Profile to maximize your leverage before negotiating to purchase.

The Tools

As a Seller, Stage 2 focuses on  the Home Value Profile (below). Use HomeToHome’s MarketPrice and RateThisHome to set a realistic List Price.

  



As a Buyer, Stage 2 focuses on  the Client Value Profile (below). Use HomeToHome’s Finance Plan and Lender Profile to establish a strong negotiating position.

The Art

Preparation is key to your success when entering the market. Focus on the 6 Key Factors that affect your Home's Price.

When selling, your agent will help you prepare your home to optimize it's market appeal, creating the best option for your most likely pool of buyers.

As a buyer, your appeal to your seller increases with the strength of your Client Value Profile. Optimize it to gain leverage and beat out the competition.

The Science

Our natural ability to judge value by comparison is extremely good. Without comparison, we are inconsistent and inaccurate. That's why HomeToHome has comparative tools that enable us to play to our strengths.

When you know the market value more accurately and understand what influences market price, you have the advantage.

The Formula

Sellers use MarketPrice in Stage 2 to understand "For Sale" and "Sold" pricing of their home. These are the starting points.

MarketPrice applies (your) human ranking of similar properties. By statistically weighting these rankings of similar homes together with a home's size, MarketPrice creates 2 price ranges.

Computer generated estimates of home values are unreliable. Instead use MarketPrice as your guide. With correct samples of market history, reliably quantify value.

Contents

Search Price Negotiator

Search Powerful Strategies & Tactics to Maximize your Dollars

Price Negotiator* : The Art & Science of Influencing a Home's Price

Strategies & Tactics: Select by Stage

Stage 2: Market Awareness

Dollar Value

Price Impact Range -10% to + 10% of home’s market value (Seller)

Price Impact Range -5% to + 5% for Client Value Profile (Buyer)

Summary

Welcome to Stage 2 of HomeToHome’s Price Negotiator.

Whether you’re buying or selling, in this stage, strategically position yourself (or your home) to maximize your market value before entering the market. Here, you will take a fork in the road as either a buyer or a seller. Even so, it’s a good idea to know and understand your counterpart.

Market Awareness as a Buyer requires preparing and strengthening your Client Profile. As a Seller, focus on your Home’s Value Profile. Both profiles have 6 key factors to help you. The stronger these factors are, the better your negotiating position.

Your Agent’s primary job now is to work on these for you. As a Buyer, your Lender helps you to put financing into place.

Stage 2 gets more interesting as we delve deeper into the art and science of negotiation. Here, we leave our notions of fixed pricing behind as we enter the world of variable-priced commodities where negotiation begins in earnest.

To better understand both our rational and emotional decision making minds, we have devised a system of strategies. It’s intended to guide you through a critical series of choices in a way that will make you most successful and profitable by the end.

Buyer

As a Buyer, your strong Client Value Profile (below)  strengthens your Agent’s negotiating position when the time comes. Follow your Lender’s Finance Plan and use the Finance Tools to get your loan application completed so that you are better prepared than other competing buyers.

Seller

As a Seller, focus on your Home’s Value Profile (see below). Your Agent prepares your home and marketing to gain the highest appeal to the most likely buyers. Use your Home Tools with your Agent to evaluate your home’s List Price while analyzing the competition on the market. Follow your Agent’s Service Plan to understand what you must do and why.

6 Key Factors that Affect A Home's Value

Home Value Profile reflects property characteristics, the seller’s timing & motivation, and the market. Use HomeToHome’s MarketPrice and RateThisHome to set a realistic Home Value Profile.

($) Home condition
($) Market Conditions
($) Marketing
($) Market Timing/Buyer Pool
($) Seller Position
($) Title condition
  • Home condition : Size, location, age, structural integrity, upgrades, staging, curb appeal
  • Market Conditions : Comparables: active, pending, recently sold. Local economy
  • Marketing : Price strategy, media creation, target buyer type, advertising campaigns
  • Market Timing/Buyer Pool : Maximize demand of qualified buyers
  • Seller Position : Timing, motivation, & equity position 
  • Title condition : Clean, encumbered, restrictions, CC&R’s, liens, etc. 

6 Key Factors of Clients that Affect Your Home's Price

The 6 factors of Buyer or Seller “readiness” qualifies the client’s to act decisively and favorably. A strong buyer is always more attractive to a seller since they are more likely to close escrow on the home. Similarly, a strong seller is prepared and aligned with the market. Use your Lender’s Finance Plan and Profile, LoanSense and CashToClose tools to sharpen your negotiating position.

($) Agent
($) Home
($) Finances
($) Motivation
($) Execution
($) Credit
  • Representing Agent: Expertise, competence and integrity
  • Home: Expectations, location, condition, and list price
  • Finances: Loan(s), cash position, equity, tax considerations
  • Motivation: Readiness and desire to execute
  • Execution: Client’s ability to cooperate with trust and honesty
  • Credit: Client’s understanding of significance, qualification process, and true cost of credit

How To

Sharpen your Market Awareness; it’s pivotal to your success.

Build your negotiating position

In Stage 2 of your Real Estate’s Playbook, negotiation is about preparation, positioning yourself or your home to the market, and following the market critically. Your Agent and Lender, your essential allies, bring you up to speed so they can perform better on your behalf.

To help you as a Seller

HomeToHome provides the complete solution:

1. The Home Value Profile (see above)
  1. breaks down your 6 Key Factors for comparing your home against your competition. With your Agent’s assistance, apply your Home Tools : MyHome, RateThisHome, and MarketPrice.
2. Your Agent

will help you to analyse the market to arrive at the optimal List Price.

3. Follow Your Agent’s Service Plan

and prepare your home to best advantage to appeal to the most likely buyers.

To help you as a Buyer

HomeToHome provides the complete solution:

1. The Client Value Profile (see above)

breaks down your 6 Key Factors for comparing your strengths against your competition. With your Lender’s assistance, apply your Finance Plan to prepare.

2. Use Your Home Tools

Armed with a realistic budget in mind, use : NextDream to capture your needs and desires for comparison, RateThisHome, and MarketPrice to evaluate prospective homes and calibrate your own expectations and valuations.

3. Your Agent

will help you to analyse the market, review homes, and to arrive at the optimal Offer Price.

Be sure to investigate strategies from Price Negotiator to uncover value and opportunity.

Case Study no. 1

Common Stage 2 Mistakes that Cost Money

  • Choosing the listing agent for the home you wish to buy, to represent you, rather than choosing dedicated representation.
  • Selecting a property before choosing an agent and beginning your financing
  • Not disclosing all facets of your property’s condition.
  • Not disclosing all facets of your financial framework that affect your loan.
  • Trying to find deals on properties based on price only.
  • Basing your “for sale” price of your home according to what’s on the market.

Case Study no. 2

The Seller’s Price

At what price shall we list the home? Why not use the “Seller’s Price” – what he wants to get.

Using this conventional “wisdom”, the seller has three things working against him.

First, he may choose an agent who will discount his commission to his satisfaction and who will tell him that he can sell his house at the seller’s unrealistic price.

Second, the home is put onto the market with the agreed-upon list price to which the agent has agreed.

Third, if the home is overpriced and not priced in the market, the perceived market value of the home will begin to decline in most cases-having very little to do with the inflated list price.

Worse, if the agent feels that the home is priced over the market, he will not expend extra effort marketing a home that he feels is essentially not marketable. This will usually cost the seller a lot.

Warning

WARNING: Buyers don’t care what the seller wants for his home. They will pay the market price or less, with few exceptions.

Case Study no. 3

The Agent with the Highest List Price Wins the Business

Most sellers don’t not fully appreciate the value of using the listing price as a marketing element to bring in more prospective buyers.

Sellers commonly fail to keep their home’s list price in line with the market to attract any potential buyers. When hiring an agent, a seller will favor the agent who convinces them that they will sell their home for more than market value. And why not? Having more money is good. But if the seller doesn’t have an accurate valuation of his home, he is vulnerable.

This is a common occurrence that compromises both the seller’s ability and the listing agents ability to perform optimally. The reason? The seller may wish to keep the listing price above the listing agent’s recommended price for two reasons: one, he does not yet trust the agent to execute to the best of his ability and two, he is afraid that his house will sell for less than he feels he may be able to get for it.

And so, when a listing agent is being interviewed by the seller, there are actually 3 prices that are being considered here!

The first price is the price that the seller wishes to get for his home.

The second price is the ideal price to attract the most qualified buyers and to bring in multiple offers at a range that the agent feels confident to negotiate up.

The third price is the price that the agent feels he must recommend to a naive seller to in order that the seller will sign with him.

What is Needed

  • Know how to evaluate the Market Price and collaborate together
  • Know the value of the Agent’s negotiation and marketing skills
  • Know the level of dedication that the Agent will apply.
  • Know the level of expertise that the Agent brings.

Tip

TIP: Ask each Agent you are considering for hire to walk you through their MarketPrice evaluation.

Unlock HomeToHome’s Price Negotiator. 

Get more  strategies, 18 tools & 9 Buy/Sell plans.