2012-05-20T03:30:21Z Bob Thompson Copyright 2012, Bob Thompson SPHPBLOG
The Uncertainty Principle dictates that this scenario is possible, but highly unlikely. It is also not a trivial idea. What is this Uncertainty Principle? The Principle is as follows:

The more precise the prediction of selling price, the lower the probability the final price will equal that prediction. The less precise the prediction, the higher the probability the selling price will equal or fall near the predicted price.

It is easier to appreciate this idea by giving yourself permission to think in a creative way. Visualize two agents. Agent1 says, “This property will sell for exactly $185,000.” Agent2 says, “This property will sell for between 0 and $1,000,000.” Which agent is most likely to be correct?

There can be little doubt that Agent2 with his extreme range estimate has no chance of being incorrect, while Agent1 has little or no chance of success. In the real world, as this logical process is carried on, Agent2’s range estimate would narrow to a reasonable estimate. At all points within this narrowing range, his probability of correctness is greater than Agent1’s exact estimate.

What are the implications for a listing agent? When quoting a listing price, do so on a range basis like this (in your own words):

“Mr. & Mrs. Seller, after reviewing all the data, I believe the selling price of your property will fall in a range from $175,000 to $190,000.” If the seller’s price falls in the range, accept it as their price selection. If the seller’s price does not perform (in terms of agent showings) within a set time (say 15-20 days), you are in a position to maneuver list price in the range. This is why your range selection must be well thought out, always remembering that the wider the range, the more maneuvering room.

No agent can know the exact selling price of a property in advance of market entry. The final selling price of a property cannot be determined precisely because listing prices are not determined precisely. By creating a reasonable price range, the agent builds flexibility into his listing management plan, and reduces the stress associated with price management.


Next article: What to do if the seller’s price falls outside the range.


Bob Thompson
Advanced Listing Services



The Uncertainty Principle is inspired by and related to the Uncertainty Principle Published by Werner Heisenberg in 1927. The principle means that it is impossible to determine simultaneously both the position and momentum of an electron or any other particle with any great degree of accuracy or certainty. ]]> http://www.statsforagents.com/blog/index.php?entry=entry101028-183957 2010-10-28T00:00:00Z 2010-10-28T00:00:00Z