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The Cost of Pricing: How Technology, Psychology and Timing Impact Listing Value

by Peter Thomas Ricci and Megan Oster

Fear of a National Pricing System

Earlier this year, the National Association of Realtors commissioned the Swanepoel | T3 Group to assess the top challenges facing the current real estate structure, and the resulting document, fittingly called the “Danger Report,” featured many warnings to agents, brokerages and associations alike.

Perhaps the report’s most ominous warning was that of a pending technological overhaul. Though the FSBO market never took hold and remains small at just 10 percent of the housing market, there are two factors that differentiate today’s housing market from those of the past. Firstly, Millennials now comprise the largest share of homebuyers, and given that Millennials, on average, have fewer resources than their parents, cost-saving measures, including avoiding agents altogether, will be more attractive to Millennials than they were to Gen Xers or Baby Boomers. And secondly, Uber and AirBnB have already revolutionized the way consumers use cab services and hotels. Is a similarly epochal shift on the way for how consumers buy homes?

Should such an innovation hit the marketplace and a national homebuying platform take hold, Moy is not optimistic about what it could mean for housing.

“So many clients will feel they’ve done their research already, and they’ll think they do not need to use an agent,” Moy explains. “That could lead to them overpricing their homes and the homes languishing on the market for six months.”

As with the implementation of Zillow and Trulia, Moy argues that any other technology will reinforce the skills of good agents, who will have to remind clients of their professionalism and market savvy.

“My strategy is to remind them that I’m the professional and to give them concrete evidence to demonstrate why their property shouldn’t be priced as high,” Moy says. “I’ll stress to them that the way to ensure their home stands out is to think outside of the box and really price it according to the competition. It’s almost like an athlete will watch their competitors play over and over in order to know what they’re up against prior to a game.”

Christopher is poised to take a similar approach, one that does not fight the technology, but ultimately uses it for inspiration.

“A national system would mean I’d have to be better at my job, better at identifying and understanding the needs of my clients, and fulfilling those needs,” he says. “It would make my job harder, but it would also make the business easier for the agents and brokerages who know what they’re doing and are good at what they do. You have to work hard for your money, and that’s ok. I plan to embrace it and figure out the best way to manage the technology, rather than trying to push against it.”


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