Sellers choose a list price for their home based on what they believe will get them the best sales price. The problem is they believe a higher list price will give them higher sales price, and that simply is not true.
For buyers to choose a house, they have to like the house AND the price. If they love the house but hate the price (because it's overpriced) the offers will come in slow and low. This is the "low-ball" cocktail. On the other hand, when they love the house and they also are excited about the price (because it's priced right), buyers come in "hot" and offers come in high...because now you have the powerful emotional cocktail of desire combined with the fear of loss. This is what I call the "High-Ball Cocktail" which is caused by a great listing at a great price. That is how you get the most money possible for a house.
For a more detailed explanation, watch the full video.
Pricing power. When you know how to price a listing right, it sells. It sells fast, it sells for top dollar, and you win.
Hi there. My name is Kevin Ward, the founder of Yes Masters Real Estate Success Training. Helping you get more yeses, and more successes in your business and in your life. And this right here is the greatest challenge that real estate agents have when it comes to getting listings, and that is getting the seller to price it right. And when you price it right, there is nothing more powerful both for you and for the seller. And so, on today's video, I want to lay out for you today what I call the high-ball cocktail. How do you get sellers to price it to help them get high-ball offers and not low-ball offer? And yes, you can do it. And after this video you are going to know exactly how to do it.
And it completely changes the game with working with sellers and getting them to understand and wrap their head around this, "Well, we want to price our house for more. Let's try it high and come down." Because, here's the thing that we all know, and that is that the reality is, the longer the house sits on the market, the lower the offers it tends to generate, because it's just like a loaf of bread, when it sits on the shelf for too long people start asking, "What's wrong with that house?" And I call it the WWW-TH syndrome. What's wrong with that house? And buyers start asking that, and it sits on the market too long, then the offers that you tend to get, there's less buyer excitement, so the offers tend to be lower. They either think there's something wrong with the house, or nobody else wants it. And so, they just do that. And help a seller. If you can just get a seller to understand it, right? You know what I'm talking about. If you can just get them to understand it, everything changes. Well, this video is going to give you some help.
And by the way what I'm going to lay out for you here, is something you can perfectly lay out for a seller on a legal pad at a listing presentation when they want to argue about the pricing strategy. So, what is the pricing strategy? Here's the pricing strategy, you always price a house right where it will sell, and sell quickly. That's where you've got to price it. You're not trying to price it super low, and you certainly don't want to price it super high. In fact, if you're going to err and make a mistake, you want to err on the side of pricing it low, not high. Now, what is the obvious reaction of every seller is, "If we're not sure on the price, we're going to price it a little high to play safe." And what I'm going to tell you is, and you know this, if you're a real estate agent and been around awhile, you already know this, it's how do I convince sellers.
That when you price it high to play it safe, it ends up, you lose that initial time on the market when the most buyers are there, the most are interested in it, it's new on the market and people can get excited about it. So that goes away. But, they want to paly it safe. Well, if you're going to play it safe, price it low. That's how you play it safe. Because, if you price it a little too low, what's going to happen? All the buyers are going to get excited about it, you're going to get multiple offers, you're going to sell it for more money. And by the way, I have seen this happen. It happens not only a seller's market, it also happens in buyer's market as well. The question is, why does it happen? How does it happen? And how do I convince the seller that this is what is going to happen?
So here's how you do it. Whenever a buyer comes into a house, a buyer has to like two things before they are going to buy it. Number one, they have to like the house. Right? So, I need this buyer to fall in love with the house. Because, look if a buyer looks into a house and they don't like the house, are they going to buy it? And the answer is, no. Now, we're not talking about investors. We're talking about home owner occupants. If they're looking for the house of their dreams and they don't like the house, it's out. There's nothing you can do about it. If they don't like it, they're not going to buy it. They want to find a house they actually want to buy. So, the first thing that's got to happen is they gotta like the house.
Now, let's say we have a house. They love it. It's awesome. Whoo! It's beautiful. But, the house is overpriced. So, what happens? Well, they look at it and they go like, "We love the house. But, man that price, that price is ridiculous. That price is too high." It's 10% over market, it's 5% over market. And as you know and you can easily communicate this to your sellers, is buyers know when a house is over priced, because they've got the same data. Used to information was hard to get, today it's not. House is overpriced. They like the house, they don't like the price. What happens when they don't like the price? When buyers don't like the price, they start looking for reasons not to like the house. If you want to buyer to pay top dollar for a house, you need them to like both the house, and you want them to love the price.
When you do this, here's what happens. Number one, it causes them to slow down. Right? They slow down. They're going like, "I like the house, but man that price. Oh, you know what, we need to think about this. We need to look at more houses." So, it slows down the momentum of a buyer making a decision. And when they get slow, they're thinking about it. They're thinking about it. And they're thinking about it. And so what happens next? The offers come in slow and when they do come in, they come in low. Mr and Miss seller, if you want to sell your house slow and low, this is the strategy. We get them to love the house, and then they don't like the price, they're going to come in slow and low.
However, what if a buyer, they see the house, they see on the internet, and this is an awesome house and they love the house. And they look at the price and go, "Dang! That's a good price!" And they love the price. This right here is the magic cocktail. When the love the house, and they love the price. You want to sell a house, they've got to like to two things. They've got to like the house, and they've got to like the price. I don't care how much somebody likes the house, they're not going to pay a price that they're going to hate themselves for paying. So, what happens here? The house is right for them, and the price is right, they fall in love with the house. And so, man they are hot on this house. Like, "Man we like it." They want it. And whenever you've got buyers hot, they also come in high.
Now, what do sellers want? You want sellers ... You want buyers bringing offers slow and low? Or you want buyers bringing in offers hot and high? Right here is what happens. Now, what causes this to happen? And here's what causes it to happen, is the power of emotion. Buyers by houses based on emotion, period. The power of emotion is incredibly powerful. And this is the cocktail. What happens when they like the house? Well, we got the first emotion that we want and this is the high ball cocktail. The first emotion we have is, we have the emotion of desire. They want it, right? They desire the house, they like it. That's a powerful emotion. Desire is an emotion we want.
However, we have desire here, we have a desire here. But, the problem is here, is we have another emotion coming in when they don't like the price. And they go like, "Man we like the house, but we don't like price and we're afraid that we make an offer on it, we're going to have to pay too much for it." And so you have this very powerful emotion called the fear of regret. Does that makes sense? You have buyers that are now looking at a house, and they're afraid of making an offer and regretting it. You've all heard of buyer's remorse, right? Buyer's remorse is a regret from taking an action. So, now they like the house. They have the desire. So, they desire the house. They desire is there, "Yeah we like it." But, you take the desire and then you combine it, you take away from it with the fear of regret. And they go, "Aw, we want it but ..." And so guess what, they come in slow and if they make an offer at all, they come in low.
But, when you put the cocktail in place here, you get the high-ball cocktail ... Here's the high-ball cocktail, they love the house, they love that house and they love the price. So, what is the emotion that kicks into place right here? When they like the price they go like, "Whoa! That is a great house! Whoa! That is an awesome price! We want it!" So, now I've got desire squared. I got desire for the house, desire for the price. I like it, I like it. But, then a third emotion kicks in that trumps everything. And that is, they're going like, "Wow this house is nice. Whoa, that's a good price. Whoa, this house is going to to go fast." Because, what's going to make it go fast? Because it's priced right. They know that other buyers are going to be in there, they're going to find it, they're going to like it, they're going to be in a multiple offer situation. So, now they have another emotion and that is the fear of loss. And my friends, right here is the high-ball cocktail.
If you want to sell a house for top dollar, you want to get the best results for your buyers. You want to get results for your sellers. And you simply lay out for them the high-ball cocktail, that when we get them to like the house and they love the price, they want the house, they like the price, they want it more. Now they're not afraid. And they see how good that is. They're going like, "Oh my gosh, if we don't act quick, we're going to get it." And what happens is, now they're hot for this house and they realize we've got to come in high. And when they come in hot and high, right here is how you get houses to sell for more money.
There is nothing more powerful than the high-ball cocktail of real estate. Now, in the past I've only shared this with my coaching members. I just thought there's so many agents struggling with this, that I wanted to share with you to help you guys stop going out there and hurting yourselves, and hurting your sellers by taking over priced listings. Because when you get emotion with a buyer on your side, everybody wins. And this will cause you to win with every listing.
Let me know what you think. If this makes sense, make sure you give the post a thumbs up. Put your comments and questions down below. If you haven't subscribed to my channel already, make sure you subscribe to the channel. And master this.