Survive & Thrive!Survive & Thrive!

Larry KendallLarry Kendall

Strategy 12: Strategy 12: Statistical Pricing SystemStatistical Pricing System

(Page 22)(Page 22)

Pricing StrategyPricing Strategy

• You & seller against marketYou & seller against market

• Turn data into knowledgeTurn data into knowledge

• ““Big picture to small picture”Big picture to small picture”

• Keep it simple & visualKeep it simple & visual

• Differentiate – “Odds of Selling”Differentiate – “Odds of Selling”

David Knox David Knox Pricing VideoPricing Video

www.davidknox.comwww.davidknox.com

Repeat Sale IndexRepeat Sale Index

www.ofheo.gov

Office of Federal Housing Enterprise Oversight

Oregon Real Estate MarketsOregon Real Estate Markets(Home Appreciation Rate 1st Qtr. ‘07)(Home Appreciation Rate 1st Qtr. ‘07)

1-Yr. Qtr.

9) Corvallis 13.87% 1.46%

10) Bend 13.67% 0.37%

13) Salem 13.44% 1.85%

14) Portland-Vancouver 11.00% 1.33%

38) Eugene-Springfield 9.00% 0.75%

United States Average 4.25% 0.45%Source: Office of Federal Housing Oversight

Greater Portland MarketGreater Portland Market(Detached home supply/demand )(Detached home supply/demand )

April May June Total

Sales 2nd Q 2007 2,405 2,572 2,496 7,473

For Sale 6/30/07 12,899

Odds of Selling 2nd Q 2007 (7,473 ÷ 12,899 = 57.9%)

Windermere Odds of Selling (983 ÷ 1,561 = 63%)

Sales 2nd Q 2006 2,606 3,057 3,390 9,053

For Sale 6/30/06 9,340

Odds of Selling 2nd Q 2006 (9,053 ÷ 9,304 = 97.30%)Source: Facts and Trends/RLS

““Would you like to see Would you like to see your odds?your odds?

Colorado Real Estate MarketsColorado Real Estate Markets(Home Appreciation Rate 1st Qtr. ‘07)(Home Appreciation Rate 1st Qtr. ‘07)

1-Yr. Qtr. 5-Yr.

State of Colorado 3.30% 0.40% 21.15%

Colorado Springs 4.17% 0.84% 27.25%

Boulder 1.55% -0.28% 13.90%

Denver 1.09% -0.34% 14.78%

Fort Collins/Loveland 0.61% 1.38% 16.73%

Greeley -1.56% -1.17% 11.52%Source: Office of Federal Housing Oversight

*Homes Listed and Sold on Northern Colorado’s Multiple List Service Copyright © 2007 The Group, Inc. Real Estate

Fort Collins Housing MarketResidential Listing Inventory

5,806

7,1427,593

6,3596,661

6,325

5,7465,717

7,499

6,593

6,017

4,008

3,109 3,165

4,0593,6743,8553,834

4,1753,821

4,0873,701

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06

Homes Listed

Homes Sold

$320,000 - $339,999$320,000 - $339,999(Detached home supply/demand )(Detached home supply/demand )

The Market The Group,

Inc.

Sales 1st Q ’07 9 12

Homes Listed 1st Q ’07 33 13

Homes for sale 3/31/07 46 17

Odds of Selling in 3 months 27% 92%

Odds of Selling after 3 months 20% 71% Source: IRES

© www.JoanneDeLeon.com

© www.JoanneDeLeon.com

Property “B” Pricing Study

Properties SOLD in Brittany Knolls SubdivisionApril 2004 to October 2004

$220,000

$230,000

$240,000

$250,000

$260,000

$270,000

$280,000

$290,000

$300,000

$310,000

1,800 2,000 2,200 2,400 2,600 2,800 3,000 3,200

Pro

per

ty P

rice

Finished Square Feet Linear (Finished Square Feet)

Properties located near this areaprovide LESS space for the dollar.

Properties located near this areaprovide MORE space for the dollar.

Actual Target areabased on signifcantadditional features

Sold 1/5/04 - See MLS 404125Area can support higher pricedHome with lots of features.

ScatterGrams ScatterGrams & &

Price LinesPrice Lineswww.scattergrampricing.comwww.scattergrampricing.com

The Pricing ParadoxThe Pricing Paradox((Dr. Barry Schwartz, Professor of Psychology Dr. Barry Schwartz, Professor of Psychology Swarthmore College, “The Paradox of Choice”)Swarthmore College, “The Paradox of Choice”)

The Pricing Paradox The Pricing Paradox (Research study of sellers)(Research study of sellers)

Group A Group B

Original List Price $600,000 $600,000

Price Reduced $575,000 $575,000

Price Reduced $550,000 $550,000

First Offer $520,000 $520,000

100% rejected 100% accept/counter*

* Pointed out - purchased 10 years ago for $250,000

Source: Swarthmore College Research, Dr. Barry Schwartz