How to Successfully Raise Your Price Range
SUMMARY
When you raise your price range and your average sales price you automatically make more money because the commissions get bigger as sales price gets higher. Here are the fives steps to successfully raise your sales price:
- INTENTION. Set the intention to get into it and to get comfortable with it.
- EXPANSION. Add luxury, don’t switch.
- EXPOSURE. Expose yourself to the world of higher priced homes.
- GO FOR IT. Don’t wait till you feel “comfortable.” You’re never going to get comfortable taking ice baths until your jump in one. Same with a price range
- GET SUCCESS. “Success breeds success.” Just focus on getting your first win in a higher price range. If $200,000 is comfort zone. Go for your first $400,000+ salable listing. Every success paves the way for bigger success.
FULL TRANSCRIPT
I was totally comfortable with a $42,900 listing. A $429,000 listing made me uncomfortable.
Hi there, it’s Kevin Ward, the founder of YESMasters Real Estate Success Training, helping you get more yeses and more successes in your business and in your life. I remember the very first listing I ever took was $42,900 in Fort Worth, Texas, $42,900. I have coaching members that regularly get commissions that are over $42,900, but that was my first listing as an agent and I can remember walking into the luxury homes. Going into the homes that, back when I started real estate back in the 1900’s, were homes that were $400,000, $500,000, $600,000, and looking at these houses and being like, “Whoa, this is unbelievable.” And I was so uncomfortable.
The reason I was uncomfortable was because I grew up in a mobile home. I came from humble beginnings, a very humble background. We weren’t poor but we certainly didn’t live in affluence, and so the idea of listing and selling high priced homes really made me uncomfortable. I was totally comfortable with a $42,900 listing, a $429,000 listing made me uncomfortable. Yet I realized that, you know what, if I listed $429,000 houses I make 10 times as much as on a $42,000 listing. So, I knew pretty soon in real estate, I’ve got to raise my price range.
To this day I can remember back in 1998 when I started real estate, I remember the first listing I ever took that was over $100,000 and I’m like, “Yes. I have arrived.” And then I remember the next listing I took, not the next listing necessarily, but I can remember the first listing I took that was over $200,000. I remember the first new construction home I listed with Michael D’s that was over $400,000 in Colleyville and I’m like, “Yes. I have arrived.”
Every time I broke through, it was terrifying, I was nervous. I get agents ask me all the time, how do I raise my average sales price? How do I raise my price range? I want to break into the luxury market, or I want to just make more money and I’m kind of stuck here in this price range. How do I get into a higher price point? So, I wanted to share with you the simple and most powerful ways, the steps to take to… How do you get from the price range you’re in right now, into a higher price range?
There’s five steps that you want to take to do it in a way that will build your business and move you forward, rather than taking a flying leap and going like, “Okay, I’m going all in to the luxury market.” Whatever price range you’re in right now, I do not recommend that you just go like, “Okay, I’m just going to go luxury and I’m not going to deal with anything else.” You’re going to cut yourself off from a lot of the business, a lot of the income that can feed you, and feed your business and feed your bank account until you master the luxury market.
So, here’s how you can make that transition in a way that’s powerful, that’s smooth, that’s relatively fast, but also in a way that is not self destructive. So number one is, if you want to raise your price range, you have to set the intention. You have to just go like, “Okay, I’m going to raise my sales price.” It’s not going to happen, for most of you, it’s not going to happen automatically. You have to set the intention and go like, “Okay, I want to get into a higher price point than I’m comfortable with.”
Now, the hardest thing for most people to raise their sales price is not about money, it’s about comfort zone. It’s that I’m comfortable. I was comfortable dealing with homes in the $50,000, $100,00, $150,000, I was comfortable there, $250,000 I started getting a little uncomfortable when I started real estate. So, as my price range expanded, then my comfort zone also expanded. So, it starts with the intention. I’ve got to set the intention, okay this year I’m going to raise my average sales price. You can set a goal, say okay my average sales price now is $200,000, I’m going to raise my average sales price to $300,000, which would be a significant increase because it means you’re taking some $400,000, $500,000 listings and doing some higher price deals to average it out.
The second thing is, as you do it, the way you approach it is I want you to think expansion. What I mean by that is, I want you to think I’m going to expand my price range, I’m not going to raise my price range. So, let’s just say that if your average sales price is $200,00, and that means you’re doing anything from $100,000 to, let’s say $300,000. What I want to do is, let’s say that i want to raise my average sales price, so I’m going to expand and I want to expand to the $400,000, the $500,000 market.
I’m not going to just go like, “Okay, I’m not going to take any more of these and I’m just going to move up here.” Okay? So I want you to think, expand what you’re willing to do rather than stop this and move up here. Because, if this is where you’ve been doing your business and you just move up here, what’s going to happen is now you’re mentally and emotionally, you’re literally turning away business that will still feed your bank account. Okay? So expand it. If you later on want to do less and less of this, you can but until you’re being successful here, don’t stop being successful here.
So, don’t think just raising it and eliminating the lower. I want to think, “Expand my sales price.” Rather than raising the sales price. I hope that makes sense. So, as I expand it and I’m getting these higher price listing, it’s automatically going to increase your price range, your average price range and your average commission cheque is going to go up.
Another thing, the reason that it’s important is your $100,000 seller today becomes your $300,000 seller five years from now. Or, your $100,000 buyer today, their parents have a $300,000, $400,000, or $1,000,000 house. And when you burn the relationship like, “I don’t want to mess with you $100,000 little people. I don’t want to mess with you.” You’re also cutting yourself off from all the relationships of the people they may know. Okay? So, expansion, not just raising it, but I want to think expansion.
Number three to raise my price range is, I want you to think exposure. Now, what I mean by exposure is, is exposing yourself into a higher price range typically involves not just going on listing appointments in higher price range houses, but it also has to do with that comfort zone thing I mentioned earlier. That is most agents, the reason they are in a certain price range is that’s where they’re comfortable, so when they think of a $1,000,000 listing … You know, you see the TV shows Million Dollar Agent, or Million Dollar Listing and you’re like, “Wow.” A lot of agents don’t feel worthy of listing and selling a home in the upper high end, in the luxury market.
So how do I get comfortable in that price range? How do I get comfortable being around affluent sellers? How do I get comfortable being around somebody that will sell in a price range, that is in a price range that I don’t have any experience in, because we’re like, “Oh no, what if they say, how many homes have you sold in my price range?” So what you want to do is expose yourself to those higher price ranges.
In fact, I want to just share with you a couple of books that may help you on this, okay, and in terms of exposing yourself and getting yourself comfortable to a higher price range. There was a book, it was written several years ago by Laurie Moore-Moore, she’s the one that actually started the Luxury Home Institute out of Dallas, Texas. Her name is Laurie Moore-Moore, she wrote a book called Rich Buyer, Rich seller. The Real Estate Agents Guide to Marketing Luxury Homes.
Now, I’m just going to tell you, I think this book is no longer in print. I found a used copy of it and actually paid like $40 for it on Amazon a few years ago. I did not find it that helpful. It’s got some good stuff in it but it really, for me, was kind of like okay I don’t know that it was worth the $40 for me. But anything like this is going to help you. Now, this one was very helpful. This is a book called Selling to the Affluent by Dr Thomas Stanley. This book is several years old now, I’m not sure if it’s been updated or not and there may be other books that have come out that I’m not aware of. So if you’re watching this, I would love it if you know of a book, a book that is available on higher price ranges or working in the luxury market. Feel free to comment and post that down in the comments below this video.
But exposure, not just exposing yourself, I want to know how do people who make a lot of money think? How do people that live in those price homes, what are they like? How do you do that? Expose yourself. Expose yourself to the world of higher price homes, the people. Where do they eat? Where do they hang out? What are the kind of things … I want to go into those neighborhoods, I want to drive the neighborhoods, I want to get in there any time that I can and get into that realm, build relationships there but mostly it’s getting used to being around that people and you’ll discover that they’re no different than you and they’re no different to any other seller in any other price range.
We talk about are they a little more sophisticated? Yes, they’re more sophisticated in this respect. My experience has been they’re used to paying other people to do professional services. I found the $100,000 seller was more likely to fight about commission because this is the guy that mows his own lawn. This guy up here in the million dollar price range, he doesn’t mow his own lawn, he pays a professional to come mow his lawn. This guy does his own taxes, this guy has a CPA that he pays a lot of money to, but he needs a professional because he knows that it’s an investment and he actually saves more money that it costs him.
So, higher end home owners, buyers and sellers tend to be … They have higher expectations but they also are a lot more willing to pay you a higher commission, okay? So you’ve got to get comfortable in that area and the first step to doing that is to expose yourself to the higher price range.
Now, the forth step is the tough one, okay? And here it is. If you want to move to a higher price range, you’ve just got the go for it, you’ve got to get yourself into that higher price range. How do you do it? You start prospecting in the higher price range. You start making phone calls, you start door knocking, you get into the higher priced homes and you start talking to those people and you start asking for business.
Now, the problem is, the challenge is people go, “I’m just not comfortable doing that.” And I will promise you, you will never get comfortable in a higher price range. If you’re not comfortable now, you’re never going to get comfortable until you go there. You’re just not going to do it. It’s kind of like trying to get used to taking an ice bath. There’s only one way to get used to taking an ice bath, you have to jump in, right? Until you get in the water and you experience it and experience the benefits of it, you’re not going to get to where you’re comfortable with it.
The first time you get in is going to be painful. It’s going to be like, “Oh I can’t believe I’m doing this.” Right, but when you go there, that’s the only path to the breakthrough that says, I belong here. So you just have to go for it.
Then the fifth step is, is to get success. That is once you decide to go to a higher price range, I just want you to focus on getting one success. Just focus on your first success. You’ve heard the saying success breeds success, right? So as you’re coming into it you’ve just got to be like, “Okay, my average list price is $200,000. The highest home I ever did was $300,000 what am I going to do? I’m going to set a goal that this year or in the next three months, I’m going to take one $400,00 listing or more. $400,000 plus”
What do you do? Focus on that and just be like, I’m going to do that. I’m going to focus on that. Just focus on getting one success. Get your first one. That first listing may not be $400,000, it may be $600,000. But once you set the intention and you start moving toward it, and you start taking the action on it, make sure you’re focused on getting success as apposed to going, “I’m going to try this, I hope this isn’t too painful.” You don’t focus on the pain, you focus on the win, right?
Focus on getting the success and when you start with that intention and you go with that attitude, it is a done deal, it is only a matter of time, it’s not a matter of if but when you are going to break through to a higher price range, to better commissions, to bigger bank. It’s your time.
So if you like the video, make sure you give it a thumbs up. Ask any questions or post any comments you have down below. Share this video and I will see you on the next one.