“Pricing a home is a little bit like a physics experiment or setting the price of a stock,” says Paul Lazarre, founder and CEO of Leap Real Estate Systems (LeapRE). “You never know what it is until you put it out in the real world and measure it.”
Doing just that is what his company concentrates on, giving agents in Chicago, Minneapolis and Michigan keen access into how effectively their properties are priced and how well they are performing compared to their competition.
The Competitive Market Snapshot is one of LeapRE’s key features. For example, if a listing agent is working with a two-bedroom, two-bath condo in Lakeview, the Competitive Market Snapshot report conveys the number of properties that fit the description, the average market price for such properties and the average days on market. The Snapshot will show where agents’ prices fall in the range of similar listed properties, homes under contract and properties that have closed in the last 90 days.
Additionally, LeapRE produces a Pricing Scorecard after a property has spent an appropriate time on the market, which depends on the home and market conditions. The Pricing Scorecard presents agents with a showing ratio, which is a metric of how their average showings per week compares with the neighborhood. Time on market is also part of the Pricing Scorecard calculation, along with a price reduction history and the activity of similar properties listed in the area. Having this verified data from a third-party source helps agents discuss a potential price change with their clients.
The Pricing Scorecard gives ratings from 0 to 100. A score of 100, Lazarre said, indicates that agents have priced the property very competitively and can expect multiple offers. A score at the other end of the scale is a bad omen. “A zero means two things: one, it’s not priced correctly and it won’t sell, and two, the agent is likely to get fired,” he says.