Convincing sellers to NOT overprice their homes by making graphs

The market is overpriced. So if you are a real estate agent trying to communicate with sellers, how do you get someone who wants to test the market at $500K to realize a more reasonable price is $375K? There are surely many strategies, but today I want to mention the power of graphing neighborhood sales. I don’t mean to beat the dead horse by bringing this up again, but knowing how to graph will help you communicate effectively, stand out from other industry professionals, and seize your role as a market trend expert instead of letting Zillow have all the glory. Sure, you can show your client a graph of city or zip code trends by using Trendvision, but it’s hard to argue with neighborhood-specific data.

making graphs - image purchased by sacramento appraisal blog

A letterhead to give your sellers: Before we dig in, here is a letter I wrote for sellers about things to consider when pricing in this market. This letterhead is based on a post I wrote recently, but I tweaked a few things. See the image below and DOWNLOAD here (PDF). Feel free to email or use as you see fit. Obviously the letter does not address a specific property. If you need a letterhead for your specific property, let’s talk about some consulting.

letterhead

Excel Tutorial: I know, you don’t use Excel because it’s only for nerds. But let me break it down for you below so you can join the club. Previously I shared a tutorial on how to graph with Gnumeric, but I had a few requests for using Excel instead since that’s what most people already have on their computers.

land park two-bedroom graph example by sacramento appraisal blog

This graph shows the range of similar-sized neighborhood sales is between $300-375K for the most part (instead of $500K). This can be a very powerful visual, especially when you begin to show the sales at $375K have been remodeled.

A tutorial on how to show the market: I recommend watching the tutorial below and then pulling up some MLS data for a neighborhood you are working in so you can create a graph by following the steps I took. This is perfect for Sacramento MLS, but as long as you can export data from your MLS system, you should be okay too. You may need to pause my video several times or rewind at moments. Whenever we do something new, it takes a while to catch on. If you don’t have Microsoft Paint to paste the graph like I did, you can use a different photo editing program, or maybe use a snipping tool on your computer. Additionally, you can open up Paint and simply start a new file, and then paste your graph (as opposed to opening an existing photo like I did). Watch below (or here if it’s too small below).

Please let me know if you have any questions. I hope this was helpful. Perhaps this will spur on a new skill set for you that can make a difference in your business.

Questions: Was the tutorial helpful? Anything you need clarity on?

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How do you make a scatter graph with Sacramento MLS data?

One of the tools in my real estate utility belt is making trend graphs. Why is this important? I find that being able to visually display all sales or listings on a graph is a very convincing resource. For example, when a home owner hires me to do an appraisal for bankruptcy or any other reason, and I include graphs of historic sales over the past three years, sales over the last twelve months, and then other graphs showing sales for 3-bedroom units, and properties similar in size to the owner’s house, it’s easy to begin to get a picture of what is happening in the real estate market. The great thing too is that you can graph so many different facets, whether square footage, age, date, bed-count, days on market, short sales vs. REOs vs typical sales, etc…

You can see some examples of trend graphs here if you wish. For now, I made a brief video tutorial to help local Realtors and real estate professionals in the Sacramento area export and work with data from our local MLS. It’s a huge benfit to be able to share things like this with clients, and once you have a little practice, you can crank out graphs very quickly. And don’t worry, if you don’t have Excel on your computer, simply download Gnumeric for free.

If you have any questions, let me know, particularly if you are a local Realtor. Call me at 916.595.3735 or connect with me on Facebook.