Why Every Listing Should be Priced at $1

By
Real Estate Agent with CENTURY 21 American Homes

This is a follow-up to my post, There is No Such Thing as an Under-Priced House.  While reading through various posts on the topic of under pricing, on comment really caught my eye.  Basically, the commenter said something to effect that if the goal of under pricing was to simply get the highest bid, then every property should be priced at a dollar.  Here's why I think that's a GREAT IDEA!

As a listing agent

There would no longer be any reason to have to 'prove' your pricing range based off your market analysis.  The market (as it always does anyway) will determine that value by the prices that come in on the offers.  Yes, you'd still have to do a CMA (sorry) because it would still be nice to know where the actual sales price should be, but now, with one dollar pricing, condition and show-ability (staging anyone?) take a front seat to pricing.  Now you'll know that your property needs work (if it does) and the pricing will reflect that, and you'll know in days, not months or years.

Marketing becomes primary to the listing agent.  Not the BS about listing on MLS/websites, etc but true marketing, as in "how you can market the home to the most people in the shortest amount of time and get the most people in the home making offers" type marketing.  You truly do have to be better than the next agent, and if you are, you now have the real ability to charge differently than the next agent, as well.

As a buyer's agent

Gone will be the lackluster buyer's agent.  No more glorified chauffeur service.  Buyer's agency will now have true value for the masses!  The buyer's agents can no longer simply say, "well, it's priced at X, what to you want to offer?"  Nope, now, as a buyer's agent, your client is looking to you to do a market analysis on the home and help guide them in making an offer that will both get them a deal AND get them the home!  It's all on you buddy, but it's all good, too.  See, with one dollar pricing, it's the buyer's agent that is now the most important agent in the transaction.  Upfront fees will be standard practice, and if you're a successful buyer's agent, one that gets their clients into properties, then, like the listing agent, you can realistically charge...and get...more for your services than the so-so agent.

Will this actually happen?  Probably not in my life-time.  But for those agents that always argue for a "Higher Standard" for real estate agents, it's not in increased education, higher fees and other methods that have been mentioned.  It's one dollar pricing on all listings.  That's where the cream of the crop will rise and the others will settle at the bottom.

Posted by

__________________________________________

Hickory Home SearchForeclosure Hunter

 

Roger Johnson is a Realtor with CENTURY 21 American Homes in Hickory, NC.

 

I service the Catawba and surrounding counties, and the Hickory, Newton, Conover, Taylorsville, Claremont, Statesville and Charlotte, NC real estate markets.

Visit us on the web at: www.HickoryNCHomes.com

You can contact me via Email or give me a call at 828-381-9245 or 828-568-2121 ext 310

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Re-Bloggged 2 times:

Re-Blogged By Re-Blogged At
  1. Lenn Harley 06/27/2010 07:41 AM
  2. Brigita McKelvie 06/29/2010 07:58 AM
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Rainer
151,803
Anna Tolstoy
Coldwell Banker Residential Brokerage

Roger, that's very interesting concept, and I must say I like it. It reminds me of 0.99 auctions on ebay. It all boils down to marketing (good pictures, title key words etc) and of course demand for that particular item (or house in our case). One thing though: some auctions will sell for market value or higher (if many bidders are present), yet others will go for starting price - 0.99.

Now, a house won't go for "1 dollar", but if it's sitting on the market, no one makes offers, seller has to sell, gets impatient, then a buyer comes into play - and offers ridiculously small amount, it might be harder to negotiate. Say, if in regular model house is priced at 375,000, there's some cut off point for the lowest offer. No one will probably come in with " I give you 50,000 take it or leave it", yet if it's priced at 1, a 50,000 sounds much better than nothing...

So it might need a clause of "reserve price", similar to eBay - you won't sell below XX, and if the bidding doesn't go beyond that point, house stays on the market... It's optional clause though.

 

UPDATE: I posted my comment, and saw that Lisa already wrote about it. Great minds think alike? :)

June 28, 2010 11:04 AM
Rainmaker
351,418
Damon Gettier
Broker/Owner ABRM, GRI, CDPE
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert

There is a business platform that uses this model.....it is called an auction and auctions are not bringing top dollar in this market.

June 28, 2010 03:00 PM
Rainmaker
295,831
Dan and Amy Schuman
Luxury Home Specialists
Howard Hanna Real Estate Services

While pricing homes at $1 probably won't work, pricing a home lower than the competition still does as the nicest home in its price range sells. If this idea ever does come to fruition, we'll give you all the credit, Roger, and perhaps they'll call it the "Johnson" pricing module.

June 28, 2010 05:16 PM
Rainmaker
641,194
Brigita McKelvie
Rural & Horse Properties & Farms in Eastern PA
Cindy Stys Equestrian and Country Properties, Ltd.

Roger,

That is a great idea!  What better way to get multiple offers!

Brigita

June 29, 2010 07:56 AM
Rainmaker
236,199
Roger Johnson
Realtor - Hickory NC Real Estate
CENTURY 21 American Homes

Anna, great minds do think alike! :)

Damon, I guess that depends on what is your definition of 'top dollar.'  Yes, auctions work on the same basic principle...if marketed correctly, given enough time, an auction brings the 'top dollar' for that property on that given day.  That's true fair market value in a nutshell.  If by top dollar, you mean waiting 6 months to 2 years to sell, then all you're doing is advertising it until the market catches up with what you consider 'top dollar.'  Thanks for the comment.

Dan/Amy, Now that is a truly scary thought! Thanks. :)

I'd say that every property done right, would receive tons of offers, Brigita.  Thanks for the comment and the reblogs!

June 29, 2010 10:11 AM
Anonymous
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Rainmaker
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Roger Johnson

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