By Alex Craig
I recently became certified as a Pricing Strategy Advisor through the National Association of REALTORS®; something I’ve been meaning to do for nearly a year. Since I needed a few more continuing education credits, I decided to knock out two birds with one stone.
If you’re not familiar with this certification, no problem. The PSA is a training program and certification through NAR that promises to teach you how to price properties with greater accuracy, as well as complete and present a CMA and work with appraisers at a higher and deeper level. The program also teaches you how to guide your clients—both buyers and sellers—through the anxieties and complexities of the pricing process and a home’s value.
I wanted to share why I feel like every agent should pursue a PSA certification.
Disclaimer: I was not paid or asked to write this article. This article reflects my own opinion and assessment of the PSA training program. I am writing this out of a desire to see the standards, qualifications, and experience of our industry be raised.
The Market May Favor It
A fellow REALTOR®, Hazel Emlen, wrote an awesome piece on the YPN Lounge indicating that the real estate market may be starting to balance out. She concludes, given the data of a potentially shifting market, “…for sellers, now more than ever it is vital to price the home accordingly.”
I agree with her conclusion and think the trend will continue. As we move towards a more balanced market, pricing a home accurately is going to be critical for both sellers and real estate agents. There are several reasons that’s true. For starters, a home that’s priced too high can take longer to sell than the average home on the market. Increased expenses, for both an agent and their client, often accompany longer than average days on market.
Soon we may not have the luxury of a market that “covers up our mistakes.” For the last few years, if a home was underpriced, it usually worked out because buyers were knocking down the door, writing offers way above asking. In my market, this was around $20,000 to $30,000 over list price.
If a home was priced too high, that was usually okay, too. Home buyers would offer the asking price, or, in some cases, still way above asking.
All of this, at some point, will slow down. Maybe stop entirely. As they say, “What goes up must come down.” Even if home values don’t decline, we are still going to see more balanced metrics for buyers and sellers, like days on market and list-to-sale price ratios.
When it came to learning to price a home, the Pricing Strategy Advisor course taught me a lot about picking comparables with better accuracy and making appropriate adjustments. I feel more confident in my ability to value and price a home.
For this reason, I would recommend that an agent achieves their PSA certification because the market may soon reward the agents who are best able to price their listings.
Better Closing Process
A PSA certification can come in handy by making the closing process better and reducing your risk of a transaction falling through.
I have a strong background in risk assessment and analysis. For that reason, I like to do everything I can to minimize and reduce risk for myself and for my clients. After going through the PSA and getting my Pricing Strategy Advisor certification, I feel like I can reduce risk for my clients during the closing process.
I have had deals, like most agents, fall apart because of an appraisal. It’s never a fun time. Inevitably, somebody always feels like they lost in the transaction. Either the buyer feels like they lost because they now have to overpay for a house or possibly lose the house they started dreaming about and spent money on for inspections and due diligence. Or, the sellers feel like they lost and could have sold for more money if they relisted and had a new appraisal. As an agent, I strive for a win-win, so it’s never an ideal situation.
With a PSA certification, there are two elements that help agents minimize their client’s risk and make the closing process smoother. First, by learning the methods in the training program, you will do a lot of work that will be similar to an appraisal and ensure that you set a price that is closer to the appraisal price point.
Half the battle of being an agent is properly managing expectations. So, if you write or get an offer above asking, you can let your clients know ahead of time that it might not appraise.
Second, the course will give you some tips for working with appraisers, creating an information packet for an appraiser, and what to do in the event the appraisal does come in high, such as, how to request a reassessment of the appraisal.
Stand Out From Competition
A PSA certification is a way we can add value and differentiate ourselves from the competition and from online listing platforms.
Zillow provides their Zestimate, however, I know of two separate occasions where Zillow has been sued over it. But that doesn’t stop clients from looking there to get an idea of their home’s value.
By understanding how to price and value homes with a higher degree of accuracy, we can add more value than Zillow can. This keeps us, as real estate agents, relevant and necessary. This is important in a market where startups and heavily funded companies continue to try to remove the real estate agent from the transaction or commoditize and devalue our services.
Real estate is local. So, here is my call to action for all of you.
Let’s become more than a door opener. Let’s be more than someone who fills out paperwork and puts it into the MLS. As long as clients see us this way, they will want to lower our commissions or get rid of our services.
Frankly, I don’t blame them if that’s all our industry is. I know we’re more than that, though. Let’s continue to be more than that. Let’s show clients we are more than that. Let’s add massive value for our clients.
A PSA certification is a great start.
Together, we can be more.
Alex Craig, a real estate professional with Century 21 Looking Glass in Lansing, Mich., helps homeowners sell their homes for maximum cash in their pocket by taking a data-driven approach and executing a systematic marketing plan that uses current digital marketing strategies. Craig also runs the Dolinski Group (www.dolinskigroup.com), a company focused on helping real estate agents get more from their careers and earn more without the heartache.