Episode 45: Pricing Listings for Today’s Market

**Episode 45: Pricing Listings for Today’s Market - If You List, You Last Podcast**

**Intro:**

- Welcome from Bob Mangold, the Listing Coach

- Topic: Properly pricing listings in today's market

- Join the conversation on the **Real Estate Asset Advisor Facebook Group**

- Opportunities for high-performance agents to grow listing agencies with marketing support

**Mortgage Market Update:**

- Fed cut interest rates by 50 basis points

- Impact on short-term vs. long-term rates and mortgage market

- Yield curve steepening, benefits for ARMs (Adjustable-Rate Mortgages)

- Forecast: Mortgage rates may decrease in the next 60-90 days

**Inflation & Mortgage Rates:**

- Fed confident inflation is under control, further rate cuts expected

- Projected interest rates: 5.75% by year-end

- Economic forecast: Unemployment may rise, potentially lowering mortgage rates

**Buyer’s Agent Commission Discussion:**

- August 17th changes and agent uncertainty

- Importance of hiring professionals in real estate

- Examples of buyers facing challenges without agent representation

**Pricing Your Listings to Sell:**

- Current market conditions: More inventory but not at pre-pandemic levels

- Impact of elections, consumer debt, and rising credit card debt

- New home builders offering incentives, competing with resales

- Key strategy: Price listings to sell, considering market conditions

**Tips for Agents:**

- Conduct deep-dive market analysis by zip code and property reports

- Encourage sellers to handle repairs and upgrades using services like Curbio

- Importance of professional photography and staging

- Build a network of local agents and market listings in areas where people are moving from (e.g., California to Texas)

**Closing Advice:**

- Don't reduce Buyer's Agent Commissions; it can hurt the deal

- Teach sellers how buyer’s agent commissions work and why it benefits them

- Final takeaway: If you list, you last!

**Join the Conversation:**

- Connect in the **Real Estate Asset Advisor Facebook Group**

- Weekly real estate updates, tips, and more!

Join our Facebook Group at: https://www.facebook.com/groups/realestateassetadvisors

Visit our website to watch replays of our Wednesday "Elevate Business Briefings" at: www.RealEstateAssetAdvisors.org

Download a copy of my book, "If you list, you last!" at www.IfYouListYouLast.com

Transcript

Hey, welcome fellow listing agents, Bob Mangold, the listing coach here with episode 45 of the If You List, You Last podcast. As always, thanks for listening, sharing, and downloading. Today, we're going to talk about how to properly price your listings for the realities. of today's market if you want to get them sold.

So grab a cup of coffee and settle in. Just a reminder, make sure you join our Real Estate Asset Advisor Facebook group so you can join in on the conversation, share your thoughts, comments, or questions on any of the topics I discuss right here on the podcast. And before I get started, one more important topic.

We're looking for high performance agents to start and grow a listing agency in markets across the country. If we feel you're the right leader. We'll actually invest in the marketing and infrastructure of your business without taking any overrides, royalties, or referral fees. Now, if you're open to conversation around that, go ahead and join the Facebook group and send me a DM.

Let's get into this week's mortgage market update, right? Last week was a pretty good week for the mortgage markets. Why? The Fed cut the interest rates by 50 basis points.  That's a big deal. Now the target range is like four and three quarters to five percent with an effective fed funds rate of 4. 875. Now it's important to remember that the fed is not cutting mortgage rates but rather the overnight rate that banks lend to one another.

Has a direct impact on short term rates like things like credit cards and personal loans and car loans things like that And it has an indirect Impact on mortgage rates because of that 50 basis point cut the yield curve will steeping steepen meaning It'll be more positive. Now, before it was inverted, short term yields were higher than long term yields, which is not normal because you'd expect to get rewarded for putting your money away for longer.

As the Fed cuts rates, short term yields will fall faster than the long term yields, causing the yield curve to steepen. As that occurs, arms should start to come back and be much more attractive. So bear that in mind for your buyers and sellers. Arms will be a better deal now as far as mortgage rate goes Mortgage rates go it depends on the perception in the environment In the past there been times where rate cuts were bad for mortgage rates because they can be inflationary I mean think about it People be spending less on short term loans and have more money to spend on other things which can hold prices Or bid higher prices Businesses can borrow more cheaply and create economic activity.

You would have expected to see interest rates took a bump to the positive when the Fed did that, right? But in fact, the Fed has been too restrictive for too long raising the Fed fund rate between 5. 25 to 5. 38. So cutting it by 50 basis points with the core PC inflation and their favorite measure of 2.

6 They could cut a lot more and still be restrictive on the economy What that really means is well, you actually seen rates go up a little bit last week Now that is completely normal in the first 30 days after the fed starts cutting rates You'll actually see mortgage rates creep up a little bit but about 60 days from then right at the end of 90 days You'll have seen interest rates will have taken a drop.

How much?  Maybe a quarter percent. So as I sit here today and say, come October, really November, you might see rates at six,  everybody's fully expecting the fed pretty much has told us they're going to cut another 50 basis points in November, which I believe by the end of the year, you're going to see interest rates around five and three quarters.

So that's good news. I think anything in the fives is going to take and spur activity. Now, additionally, the fed side, a fed said. That they wouldn't cut until they felt inflation was under control And then it was the main driver of long term interest rates like mortgages The reason being a 30 year loan or longer duration Note like that instead of a 10 year gives you a fixed return for a longer period of time  And if inflation is on the rise your return gets eroded because things cost more while the return stays the same So the only answer is higher rates But on September 18th, the Fed cutting signals that they feel inflation is under control.

After all, they were hiking to control it. And said they wouldn't cut it until they were confident it was heading to their 2 percent goal. Though, or through the Fed's summary of economic projections, that's when Powell comes out afterwards and talks about it, they signaled another 50 basis point of cuts this year, and a total of 100 basis points that year, this year.

That means economic conditions are expected to get looser. They forecasted inflation will continue to come down as they cut rates, reaching 2. 2 percent next year. which is good for mortgage rates. Additionally, they think the unemployment rate will continue to rise this year to 4. 4 percent, which sadly is also good for mortgage rates.

So if we happen to see recession like conditions, which is possible, and something the Fed fears, mortgage rates will also fall. I do believe, folks, you're going to see that happen. Unemployment's not good right now. There's all kinds of factors. The economy's not great. This morning the release of consumer sentiment came out and it was a 40 year low.

So that's not a good thing So the bottom line is folks anything's possible during this rate cutting cycle And the first cut is the deepest meaning the fed will likely Only cut 25 basis points from here unless the unemployment rate rises past four and a half percent So the other is the sep which is a survey You Of the fed bet the 19 fed members They said they don't see the unemployment rate rising past that level this year So a rise above it would likely warrant a more aggressive Cuts in the future.

So as we see that happen I believe that you know You'll see again interest rates by the beginning of the year end of the year beginning of next year Around the five and three quarters range. So with that I want to share something else that I posted in my Facebook page this week. Because I think it's extremely relevant.

We've got about a month, a little bit over a month and a half, since August 17th when all this nonsense started with Buyer's Agent Commission. And I actually do believe that we're getting to a point where you're starting to see some things settle in a little bit. I still see massive uncertainty amongst real estate agents on how to handle this.

And I'll be honest, I don't really understand it. It's not horribly complicated, but I wanted to share this thought process with you so that it's something that you could have as a discussion with either buyers or sellers, okay? So here we go. You've always had the opportunity not to hire a professional when buying or selling a home.

That did not change recently. It's always been that way. So why so much talk about it  I want you to think about that. Why is it such a big deal? It's because the media came out and made it a big deal. But think about it. You never had to do it. There's other things that you don't have to do.  You can do your own taxes.

You don't need a CPA. But you'll definitely lose money that you didn't know you lost, and you'll never know that you lost it. But I guarantee you, if you don't use a CPA, you'll pay more in taxes than you needed to. But you can do it on your own. You can book your own trips. You don't need a travel agent.

But you'll lose out on special deals and promotions that you never even knew about. You can represent yourself in court. You don't need an attorney. But  You won't have the experience or the knowledge of how the system works like a pro would. The outcome I'd say could be different, but you know as well as I do, it would be different  if you represented yourself in court, but you'd never know because you thought you knew everything.

Or you wouldn't have done it.  Does that sound like real estate? Oh, I know how to negotiate. I'm a car salesman. I can negotiate anything. It's a lot more than just negotiation. You can invest in stocks on your own. You don't need a financial advisor, but you lose out on the 40 hours a week of knowledge that they've accumulated for several years and decades.

You'll most likely not outperform them and you'll leave hundreds of thousands of dollars on the table over your lifetime. You'll never know it. You can build your own house. You don't need a contractor, but you'll miss things that you should have done. Most likely you'll find out about them down the road when it turns into a money pit. 

You can buy or sell your own house. You don't need an agent, but you'll not out negotiate an agent.  You'll not even know what you lost on negotiations because You think you saved a little on commission.  The point of it is folks, you've always had the option to use professionals. If you decide not to be represented in any fashion, you should make sure you're spending the same amount of time  or experience as the person who should have done the job for you, because if not.

You'll lose things you never knew you lost. I did a class for my coaching clients today And I told them I wanted them to start making notes of things that come along Where through the transaction? Buyers are finding out hey, they thought they didn't need an agent I seen this post in the in a facebook group and they said that a seller required a ten thousand dollar Hard earnest money deposit  and the seller would waive the right to inspection  and this client went and closed on the house You Without the agent that they originally went to said no, I'm not signing that by our broker agreement came back after it closed And said hey, did I do the right thing  because I closed on this house They didn't let me have an inspection and they didn't do any repairs And if I backed out I would have lost my ten thousand dollars earnest money And the agent fortunately said if you would have had me representing you No, that would have never happened.

So we need to start making notes of these things. And I'm going to encourage you inside our Facebook group, the Real Estate Asset Advisor group. If you start coming across these kinds of scenarios where people are getting hurt by that, I'm going to encourage you to put them in there. Cause we're going to take and start putting together some graphics and some guides that you'd be able to take and utilize for your clients.

Alright, so let's get started on how to price your listings to sell. I think we can agree it's a different market than it was six months ago.  Can we all agree on that? Totally different market. Let's set where the market's at. Because these are all market conditions to be aware of. Because you have to make your sellers aware of it now There's more inventory in the market right now.

No mistake about it, right? You'll hear it's 24 30 percent more But the truth is folks it's still not to pre pandemic levels,  but there is more inventory So people are starting to have a little bit more  Selection to choose from  interest rates not low enough to impact yet, right? Interest rates aren't low enough where sellers are going to or homeowners are going to start being motivated enough You To sell and go get a different house that just hasn't happened yet  My number one explanation for the way that the market is right now And again, I don't have any way to prove this Is so many people are waiting for the election to be over to see what's going to happen Now I have a lot of friends that are business owners and as I talk to them I am stunned how these businesses have put a freeze on Everything.

Hiring, marketing, everything until after the election. And I believe homeowners and homebuyers are doing the same thing. They don't want to take and get into a new home and have the market crash by 20 percent. Because the economy goes to hell in a handbasket  and I think that's a reasonable thought process I can tell you how we manage our business.

We're the same way  I can tell you i'm looking for some more real estate, but i'm not doing anything until after the election So I know i'm not a freak in that and I know business is holding back on spending hiring marketing That's not a good thing, folks. Now, consumer debt, is it an all time high? 

And savings rates are at a 40 year low.  That is not good, folks. It means consumer credit card debt, right in the 30 35 percent range, is at an all time high. So people are literally using their credit cards debt, credit cards, to survive, and they burn through their savings. Not a good thing. Refinances are up 140 percent year over year.

Now, about six months ago, the comment was people aren't going to sell their house because they're not getting rid of their 3 percent mortgages. Guess what, folks? They're getting rid of their 3 percent mortgages because they're sitting on 30, 40, 50, 60, 000 in credit card debt at 30%. It makes sense for them to do it.

So people are starting to wise up that 3 percent interest rate isn't the big deal that they think it is, especially when they're carrying more debt.  Job loss is running substantially higher than pre pandemic levels. We said the Fed will only react in terms of, negative lowering rates again based on unemployment.

As you've heard, if you listen to this podcast regularly, the job reports that get released by the government are complete crap. They're BS made up. They recently adjusted it by 818, 000 jobs. They go oops in the last 12 months. We were off almost a million jobs So the reality is we don't really know what the real numbers are and that's why I follow ADP automated data processing they process 25 million paychecks a week I go by their numbers much more than I do ever go by the government's number buyers are much more discerning right now.

They don't want homes that they have to invest in repairs Part of the reason is they don't have the money So if your listing needs work, you better price it to sell and then finally competition with new home builders offering huge incentives  Is really driving a lot of the buyer market to the new homes and let's be honest folks Can we blame somebody if I can get a home for the same price and it's brand new and I don't have repairs And everything is brand new  and they'll even buy my interest rate down or they're giving me all the incentives Yes, they raise the price of the house to do it.

Make no mistake. They do But, wouldn't you do that? Now, there's some unexpected costs in buying new, right? You're probably paying for more landscaping, upgrades. You're gonna have to put blinds on the windows, right? Window treatments. There's a lot of things that you still do in a new home. Usually, they do the landscaping in the front, but not the back.

Now, you gotta do that. Usually the paint they put on a new house is terrible.  It's like liquid chalk. So you got to repaint the house So there's all those Unexpected expenses in there and again, that's something you can educate buyers about for sure  But you need to take and talk to them about to sellers about that And you'll need to do some research about new home subdivisions in areas that are close to them.

My son's got a listing where literally across the street, they're building the same size homes as one of his listings.  They're 50, 000 cheaper. And they're brand new.  It's very difficult to sell his listing. Not because the market's terrible or all that other stuff. Wouldn't you just rather go to the new home and get it for 50 grand less? 

So you need to be aware of the market. You need to be able to do that kind of research and you need to be prepared to talk to a seller about this stuff. Make sense? Because they have to be realistic because the next part of what I want to share with you is what do you do about all this, right?

That's the economy. There's nothing you can do about it. It is what it is, but there are things you can control about it, right? So what's the first one? How about doing a deep dive on exact market movement in their subdivisions? or zip codes. If you did that, you could give the seller a reasonable expectation about what's happening specifically in their area.

Now I have something, and if you listen to some of the early pod earlier podcast, there's a link to it somewhere, where it's a zip code analysis. I teach all agents to use it. And I teach them to update it every 90 days. So every three months you update it four times a year and you break your zip code down, your zip codes that you work in down.

And then you look at how many homes sold, how many are active, what's the absorption rate, what's the average market time, what's the average price, what's the average time on market, all those things so that you can give somebody a very targeted  expectation of what they're looking at, what's happening in their neighborhood.

Okay,  then you could prepare a property report showing the 10 and 20 year appreciation rates. Now we provide that, on the mortgage side of what we do, but we can go back and look at a historical 10 and 20 year look back and say, Hey, over, let's say since 2024 or 2004, your home is appreciated on average eight and a half percent a year. 

Because as More and more of my agents, and I'm just telling you this from experience of the agents on my team,  when we're sitting down with sellers, we're coming up with crazy  pricing from their end.  They think we're in the middle of the pandemic now. You're going to have to bring them back to reality.

It's not a horrible market. It's not depression market, but it's about as low as it was in 2008 in terms of units sold. So we have to have a reasonable expectation about what we talk to them about. And if they want to sell the house, they better price it. By doing that zip code analysis, you're going to be able to show them this is what it takes, folks.

Next, they need to have repairs and general cleanup done before putting a home on the market. Consider doing upgrades.  Now, most people don't want to invest the money to get a higher price on the property. Then I'd say that they don't want to do it probably because they don't have the money  But you could use companies like curbio to fund the repairs and upgrades Because here's what I would tell you folks it's my own term  buyers in today's world have been hgtv'd They don't want to look at properties that they got to come in and spend a bunch of money to bring up to say market value. 

They don't have the time, they don't have the money, they don't have the expertise. But they keep watching all these shows on HGTV  to see how people took this hellhole of a house  and turned it into a palace. They want the palace, not the hellhole.  And if that's what you have and a seller doesn't want to do any of that work, it has to be priced accordingly. 

Now, what happens if the seller is simply  unwilling to do that? Then you have to make a decision whether or not you take that listing. Do you want to spend the time, effort, maybe marketing dollars, marketing effort, knowing full well, you'll never get the price.  Now your theory could be the age old real estate theory just take the listing and then they'll lower the price. 

Folks what I've found in my 34 years of experience now, an unrealistic seller in the beginning is an unrealistic seller in the end. And they'll let the darn thing expire, they'll wait 90 days,  and then they'll come back and list it with somebody else  that will then list it at the right price.  Better to be number two at that point than it is to be the number one agent.

My opinion only, you got to do what you want to do.  But I'm just telling you, if it needs upgrades, there are options for people to do,  and they should examine those options. They've got the money, great. They don't, great. It's another reason I teach agents to build a referral network. You should have local contractors and, plumbers and electricians and carpenters in your market that you could refer to people to do this kind of work.

Because if you'll do the fix ups, you're going to get premium price. In today's market if you just let it be a hellhole it's gonna sit there folks unless you price it to sell now  Stage the property  get a stager in there Even if you had a virtually stage the property if people can't envision which they really can't flippers can investors can But very rarely  does a average home buyer Can they picture what a house looks like if it's in less than desirable condition?

 So if you had virtual staging where they could get that done and they could see that and you could give them a vision, maybe get some information on FHA 203 K rehab loans and how that would work so they'd have the money to do that.  So I'm not saying don't take a house that needs work. I'm just saying, You're going to have to get creative with it.

Pricing is the number one thing. Everybody wants to say, look, it's all about location in real estate. And my answer to that is you're wrong.  It's not location. It's it's has an impact, but it's not everything. If location was important, explain to me how houses on busy streets that are placed under high powered electrical lines sell.

Certainly not ideal location. How did the builder sell them originally? Price. How does the reseller sell a home on a busy street, y'all have them in every market,  that sits under power lines or anything else backs up to railroad tracks?  That's not ideal location. It's price.  So I'm not saying don't take a house that needs work or sits in those locations, but if a seller's unwilling to price it properly, then you're going to have to consider whether or not you'll take that listing or not.

Next thing you can do is professional photography. I tell you to do this on every listing, but folks, a professional photographer is going to make a house look a lot better just with the right lighting and camera location. So don't get cheap on that stuff. Next, let's say it's not necessarily desirable, but it's in desirable condition, but they're in a great school district.

And there's, they're in an area that has all kinds of things that are good, right? Like maybe local kids, sports and activities. Like in Phoenix, we have people that move from, School district to school district simply so their kids can play high school sports  You should have that information available  and that's on any listing folks So the things i'm talking about aren't just listings that need help.

It's every listing  because In today's market we can no longer just throw a house on the market and two days later have a contract on it like that It's not like that now, is it now you're gonna actually have to spend some time marketing your listings So let me give you a couple of tips. I've noticed in my email now on a daily basis I probably get  call it 10 to 15 e flyers from agents promoting Their listings. 

I'll be honest folks. I'm in the real estate marketing business. I just chuckled at him I'll be honest. I haven't even looked at him These are the most agents. It's cool. It's not that expensive and you can tell the seller you're doing something But it's not helping you what I would tell you to do is start spending some time To create a network of local agents that do a good job That are good buyers agents that are do volume that have experience so back in the day, I used to have a list of about 60 of us. And if I did a transaction with an agent, whether they were listing agent or a buyer's agent, didn't matter to me, but they did a good job. They knew what they were doing. I simply talked to him after the Transaction closed and said, Hey, you know what you did a great job And I always appreciate working with an agent who knows what the heck they're doing  And what i'd like to propose to you is that we kind of work in conjunction with together So that I would love to be able to sell one of your listings and do deals with you And I would hope that I did a good enough job that you would want to do the same for me So What if we simply, every time we took a new listing we just swapped information.

So if you have a buyer for it, I would love to do a deal with you instead of an agent who has no earthly idea what they're doing. Guys, we have this killer network of about 60 of us and we'd meet once a month for happy hour. Just shoot the breeze, talk, have fun, whatever. All work for different companies had nothing to do with that It was simply they were good agents that we would rather do business with them because they knew what they were doing  I would recommend you do that in every Scenario  make sense  better marketing.

Oh, yeah, by the way, how much does it cost you to market to them? Nothing,  and then i'd also recommend that you have a strategy to promote your listings To agents in areas where people are moving from so let me give you an example Biggest one I can think of is people leaving California to Texas don't have the numbers.

It's huge If you want to figure out you go, oh gosh, how would I find this information out call your local u haul? dealer  and say if somebody was moving from my market  To let's say California and I know this because one of my daughter's friends just did this She's moving from phoenix to san diego the cost for u haul From phoenix to san diego is like four hundred dollars from san diego to phoenix was 2200 

So what does u haul know that you don't? U Haul knows there's a lot of people in San Diego moving to Phoenix, so they're going to jack up the price of their U Hauls to do that. If you knew that, what if you started marketing to agents in San Diego? Hey, you probably have a seller who's moving from San Diego to Phoenix. 

Here's a listing. I'm paying three percent buyer's agent commission on it, 

right? Networking across the country makes good sense.  Find out who your largest employers are in your area and start marketing to those areas, right? So give you an example. In Phoenix, Taiwan Semiconductor is building this huge plant, can employ literally tens of thousands of people.  Just find where the  other branches of them are, the other factories of Taiwan Semiconductor is, and market there.

Now, fortunately, at EXP, we have, we do business in 23 companies. Japan is one of those companies. Taiwan Semiconductor is moving more than 10, 000 people from Japan to Phoenix, Arizona.  Wouldn't it be cool to have a network of agents in Japan?  Something for you to think about. And then, finally, you can't get cheap with lowering the Buyer's Agent Commission, folks.

Here's what we know in about six weeks. I can tell you personally, I know about a dozen  transactions that my agents were working on where the buyers walked away from the listing or the offers they were writing simply because they were not willing to come out of pocket  to pay the buyer's agent commission even when they were willing to raise the price. 

Again, that's a seller you have to have the conversation with and explain the realities of how this works. They never had to offer buyer agents compensation, they don't now. But if they want to get the highest price, then they need to offer the highest compensation to take and incentivize the buyers to wanting to look at that listing so they don't have to come out of pocket.

Period.  They don't have the money to come out of pocket. And guys, it has nothing to do with first time homebuyers.  We've got agents that have six, seven, eight hundred thousand dollar listings and people don't have the money to come out of pocket to pay their agent. Now you get into the two, three, five million dollar range.

Those people understand what they're paying for. So you've got to get better at having that conversation with their sellers, with your sellers, teaching them that by opening up the buyer's agent compensation, you made it easier for agents to show the property because the buyer doesn't have to consider Oh crap, I might have to come out of pocket for that.

They can always negotiate it in the price. It's how it always happened. The buyer always paid the commission because the seller factored that into the sale price. Don't let what this nonsense happen convince you that it worked any other way. That's how it worked. When you went into a listing presentation, folks, what did you, what were you thinking of selling your house for?

Oh, 500, 000. Great. How'd you come up with that price? And I seen this on Zillow and my neighbor sold that and whatever. But we need 425, 000 to, we need to net 425, 000 to have the money to move where we're going next. We figured at 500 with sales commission with commissions and whatever, that's what we'd net.

We left a little bit of room for negotiation.  Is that pretty much how your discussions went? Prior to august 17th, the sellers knew that they raised the price. The buyers knew that they raised the price The buyers it wasn't explained to him that way. I always explained it that way.  That's all that's happening now Nothing's changed.

Remember what I said in the beginning.  They always had the ability to do it So don't get cheap by lowering the buyer's agent compensation.  So I hope this stuff helps. I gave you something to think about And forward to hearing from you next week and most importantly folks remember  if you list You last we'll talk to you soon