Pricing a home isn’t a science, there is no psychology behind it. As a real estate agent, you rely on your knowledge, experience, and information gathering skill to price a home right.

However, it does sound easier said than done.

There are many different aspects you have to take into consideration, take into account several different factors and then come up with a price that will not only suit your client but suit the market condition.

So how do you go about it?

Well, to price a home. You must do your due diligence. You must run your analysis, you must assess the prices around the area, run a comparative market analysis and based on this analysis, price the home rightly.

It’s a technique that has been used traditionally and you will have to master this old-school technique to come with a right price of client’s property.

Why is pricing a home so important?

The reason for pricing a home correctly is important because during a listing presentation if you improperly price their home by overpricing, you will be making three large mistakes:

  1. You incorrectly managed your client’s expectations You price the home for $560 000 and you only get $525 000
  2. You will ruin the relationship with your client as they will believe that you are not a strong seller, which will make you lose some of your greatest lead generation and prospecting links, referrals.
  3. You attract the wrong buyers, you priced it at a point where the wrong buyers are gonna see it. The right buyers won’t see it, you missed the chance for a stronger deal if you had a lower price, it would drive more offers to your home, thus increasing the selling price. The buyers who are searching for a house in the “XYZ” area with a price point of $499 999, they’re not seeing that house in their budget.

Price Authority

Real estate agents must know the exact price of their client’s home before the listing presentation from this, they must show their clients how they got that price while using their CMA! This method is called Price Authority:

By mastering Price Authority, you can, IN MINUTES, price your clients home.

Price Authority Process: Seller’s POV

Clearly, pricing a home is imperative to all you real estate agents. In a scenario of a listing presentation, it is part of your role to show your clients exactly how you got their home price.

Before you go, you must be prepared with a comparative market analysis. Your entire presentation will be done virtually, with exception to your CMA, you will have to show the process on paper.

You will have 4 piles:

  1. Your subject property: this is your client’s property, it shows the Sq feet, rooms, washrooms, basement, etc.
  2. Sold properties: This is the most important pile you show your clients, it has all the sold homes similar to your property
  3. Active properties: The properties similar to yours and in your area that are live on the market
  4. Expired Listings: Properties that have not been sold and off the market


Below, I have provided a brief script to show the POWER of the Price Authority method, keep in mind, you must always be confident in exactly what you are saying,

Agent: “John, you’ve seen my presentation and I showed you all the value I can offer to help sell your home.

Agent: Now, in the next 5 minutes, I will help you tell me the exact selling point of your home. I already have a predetermined price based off all my in-depth research and experience in the market”

*Show subject property*

Agent: “Okay John, this is your home, we see it is a 3000 sq ft detached home with a finished basement, hardwood floors in the “XYZ” area,

Side note *At this point, give yourself and client separate pieces of paper*

I already know the exact price of the home and I am putting it right here *place under something*

The comparative market analysis consists of three piles

The first being the homes sold in your area that are similar to your property and have sold
This particular pile is 70% of the reasoning for the price of your home. Use this as a huge benchmark.

The second pile is your active properties that have common features as your home; these homes are on the market right now. These are going to be your competition on the market. Just like apples to apples and oranges to oranges.

The third pile will be homes that did not sell, the expired listings. The reason we look at this pile to do exactly what they did not do. They probably did not:

  • Market properly through online and offline methods (blog)
  • Did not fix up the issues with the property (Repairs, updating)
  • Overpriced (People will not buy an overpriced home)
  • They did not stage correctly

Price Authority: Buyers POV

Now let’s look at it from when you are in the buyers point of view

When you are in the buyer’s position and are viewing a home you must know if the price you are potentially purchasing it for, is correct.

Using the Price Authority method, you are able to assess and guide your buyer client to give them the most from their experience with you while saving them precious money.

If the home is overpriced and the sellers are not budging, use the 4 piles as real estate tools to show the sellers and seller agent what the true price should be. By using the CMA with the technique of putting the teacher’s hat on and guiding them towards the price, you are both able to logically get the best price for the home sold!

Power in Negotiations

The Price Authority method with the CMA can be your biggest leverage.

Say you are faced with a dilemma where the seller has overpriced the home, you are able to tell them:

“Listen, you’ve listed this house at $560 000, and it’s been on the market for 6 weeks. Now, 3 homes of the similar subject including the house across the street were just sold for $525 000 in the winter, except this basement had a walkout and it increased the value of the home by $12000.

We are in a summer market, the market dipped, you want $30 000 more with a lower market and fewer upgrades? Mr. agent, I’m in it with you, we have to work together to get this house sold, but you gotta talk to your seller because he is not going to get this much money for it.”


The Price Authority method is one that can’t be taught with the everyday real estate license. This strong value proposition can set you over the top in your client’s eyes. Time is an important factor in every encounter you have, this added 5 minutes can be an investment to potentially make you a top selling real estate agent. When dealing with this method, it is crucial that you follow through with a confident attitude which shows that you know what you are talking about. With simple tricks such as body language and tonality, you can persuade your clientele and the opposing team that you have the price authority in the entire encounter.

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