The real estate market is always changing, and as agents, we have to adapt quickly to stay ahead. One of the most common issues I see is agents losing listings because of how they handle the conversation about how to price a home. The good news is there are ways to avoid these mistakes and establish yourself as a trusted authority in your market. Let’s break down the five most common pricing mistakes and how you can avoid them to win more listings and better serve your clients.
Mistake #1: Not Investing Time to Know Your Market
To accurately price a home, you must first be a true market expert. This means blocking out time each week to study your local market. Focus on understanding the absorption rate (how quickly homes are selling), current trends, days on market, hot price points, and how interest rates are impacting buyers. These are the building blocks you need if you want to confidently price a home for your clients.
When I started in real estate, my broker made me preview properties every day, learn about builders, styles, and even the schools in the area. This deep knowledge gave me the confidence to price a home even when the market was unpredictable. Today, with tools like MLS data and virtual tours, it’s easier than ever to stay informed. Remember, a well-informed agent is always better prepared to price a home correctly.
Mistake #2: Overwhelming Sellers With Data
It can be tempting to bring every chart and statistic to a listing appointment, but too much information can confuse your clients. When you want to help someone price a home, keep your presentation simple and focused. I recommend showing just five active listings, five pending, and five sold properties. Take your sellers on a virtual tour of their top five competitors so they can see what buyers will be comparing their property to.
This approach helps sellers understand the market without being overwhelmed. When you make it clear and straightforward, you build trust and make it easier for your clients to make decisions about how to price a home.
Mistake #3: Not Understanding the Bigger Picture
While real estate is very local, it’s also influenced by national and international trends. Knowing your feeder markets—where your buyers are coming from—can give you a significant edge when you price a home. For example, in some areas, buyers may be relocating from out of state, and understanding these migration patterns helps you anticipate demand and set the right price.
Reading publications like the Wall Street Journal will keep you informed about broader trends that may affect your market. The more you know about what’s happening beyond your immediate area, the better equipped you’ll be to price a home competitively and answer sellers’ questions with confidence.
Mistake #4: Missing the Nuances of the Area
No two homes or neighborhoods are exactly alike. When you price a home, it’s important to consider the unique features and nuances that can affect value. Preview properties through broker tours, open houses, and virtual tours. Pay close attention to upgrades, location, lot size, and special amenities.
For example, in Long Beach, California, the value of a home can vary dramatically depending on whether it’s on the bay, a canal, or in a prestigious area like the “Gold Coast.” These details matter when you price a home, and being aware of them will help you explain your pricing strategy to sellers. Even if you can’t get out every day, take time to do virtual tours and study new listings online.
Mistake #5: Not Engaging Sellers in the Pricing Process
The number one reason agents lose listings is mishandling the conversation about how to price a home. Sellers are more informed than ever—they’ve checked online estimates and may already have a price in mind. If you try to dictate a price without engaging them, you risk losing rapport and the listing.
Instead, involve your sellers in the process. Ask if they’ve studied the market and what price they had in mind. Listen to their thoughts without judgment. When it’s time to discuss pricing, present three strategies:
- Price below the data to spark a bidding war.
- Price to the data for a fair sale and quick appraisal.
- Price above the data to test the market, knowing you might need to adjust.
Give them a price range and ask where they’d like to begin. This keeps them engaged and helps “tenderize” the pricing conversation. When sellers feel involved, they’re more likely to trust your guidance and agree to the best strategy to price a home.
The real estate market is constantly changing, and your job is to be the expert your clients need. Make it a habit to study your market each week, keep your presentations clear and simple, stay informed about broader trends, and always engage your sellers in the process to price a home. By avoiding these five common mistakes, you’ll build confidence, win more listings, and help your clients achieve their goals.
If you want to learn more about how to price a home and win more listings, check out my latest video on this topic.
