Where Algorithms Meet Aspirations In Real Estate Pricing

We walk through a clean, repeatable way to explain pricing to owners by pairing the bank’s algorithmic estimate with the buyer’s emotional premium. Along the way, we connect fees, marketing, and negotiation into one clear plan that builds trust and protects deals.

• why system numbers calm price debates
• fees one two three explained as three key numbers
• team value and 2.9 per cent commission structure
• price improvement through repairs styling and marketing
• sale funded marketing to avoid upfront costs
• mathematical vs emotional price and how to use both
• how lender limits can cap record offers
• staging attract engage commit to drive the premium
• settlement flow and how funds clear all costs
• upcoming events and training opportunities

Please request on through, and we will record podcasts just for you

Also in the show notes is the link for our next events, and everyone is now starting to select which Complete Salesperson Course they'll do around the country

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Discover more:

• Next Events
• Lee's New Book – Claiming Doors
• Explore Lee Woodward Short Courses
• The Top 100 Business Stories & Life Lessons Of Charles Tarbey

Chapters

• 0:01 Welcome And Listener Request
• 0:34 Why Use A Pricing System
• 1:45 Introducing Fees One Two Three
• 3:03 Team Value And Commission
• 3:47 Funding Marketing And Repairs
• 4:22 Mathematical Vs Emotional Pricing
• 5:23 Bank Limits And Real Outcomes
• 6:03 Setting Expectations With Two Numbers
• 6:32 Requests And Upcoming Events

Transcript

SPEAKER_00: 0:01

Hello and welcome back to the podcast We Are Selling. My name is Lee Woodward, your coach and host, and the author of the Complete Salesperson Course. Today we're doing a request, South Australia, in the area of delivering price to our owners. And from South Australia, it was Robbie Smith from Ray White who reached out, who attended the Complete Salesperson course and remembered the mathematical and emotional price of how we communicate that through to the owner. So, Robbie, this one is for you. Before jumping into the dialogue, the psychology behind this particular mathematical and emotional is actually designed that no one can get angry at a system. So as an agent, you have an opinion and the consumer can agree or disagree with your number. When it's a system-generated number, be it an estimation, or if we type in, as the bank would, the address of the property, it does a search of the surrounding sales, and that algorithm will go from little unit to mansion, look at the comparables, and give a number based on site unseen pricing. And that's what we've got to get across to the owner is the banks will approach it in this way. We approach the marketplace in an emotional way, and in between what the bank is putting as a number and what we can get someone to pay, we bring that all together. So that's the thinking behind mathematical and emotional. And let's go into that dialogue. Now, this dialogue perfectly connects to fees one, two, three, and I will perform that at the same time so you can see how these actually connect up. When you're with an owner, and it's now time to discuss fees, marketing, and pricing. You don't have to remember fees one, two, three, fees one, two, three is the label that I use in training to get this across, and it works like this. John and Helen, what I'd like to do now is discuss all the numbers of your property. And there's three numbers that we need to know about in order to make an informed decision about bringing your property to the marketplace. And the first number is your investment in us as your agent, the real estate group that will be representing you. The second one is for our price improvement plan. So if we're going to do some repairs, styling, beautiful marketing, that's how we improve the price. And that number is very important in the profit that we receive. Then the third number is the actual price that the marketplace, the active marketplace, will pay or may pay for your property. So let's discuss those three numbers. Firstly, for our real estate group to represent you, yes, myself, I'm responsible for the property. I project manage it, I price it, and I sell it. However, there's another 10 sets of hands that are going to touch this property from compliance marketing right through to settlement. We all get rewarded. It just doesn't come to me as an individual real estate agent anymore. We're a team-based business. And your investment for the team to work on this particular property is 2.9% of the sale price. With the marketing for a property of this level to run a price improvement program, we'd be looking at an investment between$7,000 and$11,000 that we could use from the sales funding process, which means once we've got the agreement signed and we are appointed agent, we can actually apply to sale funder and they'll give us up to$60,000, which we don't need. But those funds go straight into the marketing, the repairs, anything we need to do, the reports, and then on settlement of the successful sale, those funds are paid back to sale funder and it saves you using your own money. For the third number, which is probably the most important number, we've got to discuss what the marketplace would pay for your property in the active market. And when we look at that, there's two factors in this final price that make it all come together. And when we look at pricing real estate, there is a mathematical and an emotional figure. Mathematical is really simple. The banks type in your address at point of sale because they'll be funding the money. It runs an algorithm from the lowest sales to the highest sales, and that could be unit to mansion, and it spits out a number as an estimate of what they're prepared to borrow on. And that is the mathematical value of the home. Emotionally is what we can get the marketplace to pay. And as you know from our staged marketing conversations, our job is to attract, engage, commit. And with that marketing, we'll attract the right person who engages, meaning their first, second, third inspection, and then we'll get them to commit that final negotiated figure that will become the final sale price. And it's an interesting part of real estate that the funds from the future owner, the purchaser, is what settles all accounts. So when that settlement funds come in, that settlement check, that settlement process, that pays out the agent, the marketing, the repairs, and then the entire balance goes into your nominated bank account. So with these two numbers, it's very important to understand there is a discrepancy. So for example, I know in the last 12 months we've had some record sale prices that didn't go ahead. We had the purchaser agree to pay it, but the bank said, no way. There is no surrounding sales evidence at that level, and they wouldn't borrow the funds for the purchaser for that home. Now, depending on the purchaser, we we actually finally land, they may not be using a lot of funding, and that can make a huge difference. But for 95% of the market, they are mortgaged as much as they can as the cost of living has gone up so much, and the bank's final number is going to come into play. So let's discuss what those two numbers could be. With the mathematical in the research that I did for the surrounding sales, the estimate came in at a base value of. Yet with the surrounding sales that we've just achieved in the marketplace, and I brought six of those surrounding sales with me. This is what we've been able to get people to pay, and other people have paid with other agents at this level. So from mathematical to emotional, you can see those two figures. Out of dialogue. So in this little snack tip, you are really leveraging the point that no one can get angry at a system. They type in your address and it gives you that number. And that number becomes the base level. But it's also could become the final level, depending on what we can get the marketplace to pay. So, Robbie Smith, this is exactly the request that you had, and I really enjoyed this request coming in. As every week we find these great interviews and podcasts. But if there is something you want fixed, there is something you would like done on the show, in the show notes, there is a communications one there that you can put through what you would like done, but please make sure you put your details as I get these requests come in, but I don't know who it was from, as the platform just sends them straight through to me. It's absolutely a great part of our program to meet your requests and be part of that learning. So please request on through, and we will record podcasts just for you. So thank you for listening. Also in the show notes is the link for our next events, and everyone is now starting to select which complete salesperson course they'll do around the country. Will it be Sydney, the Hunter Valley, or could it be that you're gonna head over to Perth? And not confirmed yet, but we've had a request to take the complete salesperson course to London, which will be in June 2026. We're just waiting for the promoters to come back to me. So there could be a complete salesperson course in London. And if you'd like to head over there at that time of year, a perfect way to do it. Thank you for listening on Lee Woodward. I'll see you next week on We Are Selling. And Robbie, thank you for your request.