VALUE vs. PRICE
When listing a property, it’s often how you frame the lifestyle, positive features, and exclusivity that hook a Luxury buyer. Though many potential Buyers will focus on the price tag, it’s a real estate professional’s job to get them past the number and into what they are getting for their money.
Let’s take a minute to define what we are talking about when we reference value vs. price.
PRICE: The measured monetary value of a given property, often based off the going rates for similar real estate in the surrounding area.
Value: What the Buyer of the property is actually getting for their money. Also referred to as how far the Buyer’s dollar is being stretched on a given purchase. Most times, once a Buyer understands the value of a property, it reflects in the price they are willing to pay. It’s the responsibility of the REALTOR® involved in the transaction to know which features add value, and to understand the mindset of the affluent Buyer. Understand that clients generally expect to be educated on the value of a home before negotiating a price.
Let’s talk about some ways to emphasize a property’s value rather than just the price.
House Buyers love finding a property with one-of-a-kind features, which can greatly raise the value of a property if showcased correctly. Before you list a property, be sure to make note of interesting and unusual features that are difficult to find elsewhere so that you can emphasize them in your marketing. Play to the lifestyle of the home again by emphasizing those features that show off the lifestyle.
Does the home have exotic hardwood flooring? Are the bathroom tiles hand-made? Vaulted ceilings with a walk out to a specular views? Perhaps an outdoor gourmet kitchen? Finding the detail that will grab an audience, and taking steps to enhance this feature before selling can increase the value and make potential buyers feel better about the price. Features like these might be the final push in helping a buyer making a decision to purchase. Understand the features that buyers want, then exploit the features in your marketing for the property.
As a real estate professional, if you come across a property that is uncommon for the area in which you are listing, be sure to communicate that to your luxury Buyer. For example, selling a property with a large yard in a city otherwise dominated by homes with little-to-no yard gives it increased value.
Another example would be a property with historical significance in a market saturated by new developments and brand new homes. As a general rule, most people want something that other people don’t have. Unique features make the listing feel that much more special and boosts the desirability of the property. The right Buyer will understand the value of a home with a story and will agree to a price accordingly. Up your language when describing this type of property with words like, “rare”, “uncommon”, “distinctive” to further elevate your listing and catch the attention of buyers.
When you’re defining the core value of a given property, consider the kind of person who would be interested in purchasing the home. This is where understanding how your client developed wealth, and whether it was new wealth or old wealth can help. The difference between “old money” and “new money” is an interesting distinction, as the motivation and spending habits of the two differ.
Another factor when determining wealth comes from an increase of foreign off shore Buyers who have a different measure of wealth and who see price and value differently.
It’s no secret that attention spans are getting shorter and shorter, which is why it is imperative to get your marketing message out in a succinct and precise manner. Visuals speak louder than words and I strongly suggest using our Studeo Enterprising marketing resources in both print and digital with full analytics of engagement.
Leave the price off the listing on your print copy and digitals. This is a technique that has proved successful for some real estate professionals. The benefit of doing so is that interested parties will get in touch to discuss the property if they are genuinely interested in what it has to offer. This technique also effectively vets the buyers who only look at the price in comparison to the value of the property.
Although open houses are always a great opportunity to meet people, in high end luxury homes it is less common. However, if your client will allow an open house, I suggest you do it yourself, as you are the best advocate for the property and know all the nuisances and features. Another great tip is to be present in the home for all showings. Again as the home’s expert you can answer questions on the spot and explain features that a less informed agent wouldn’t be able to answer. Further you will have instant feedback for your clients, and be able to assess the buyer first hand.
Always work to show the value of the property and this will lower the resistance to the question of pricing.