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Discussing price is one of the most critical parts of a real estate transaction. Adrian Bo, CEO of Adrian Bo Real Estate Training & Auctions, highlights a simple yet highly effective approach to these conversations: the rule of three comparable sales. This method ensures transparency, builds trust, and helps guide both buyers and sellers towards confident decision-making.
The rule of three:
When talking about price, Adrian advises always presenting a minimum of three comparable sales.
How it works:
• A property worth slightly less: This provides a conservative starting point.
• A property worth very similar: This frames the likely value of the property based on market activity.
• A property worth more: This creates an aspirational price and a potential dream scenario.
By showcasing these three examples, agents can establish clear parameters and avoid ambiguity.
“It’s a simple way to provide context and give both buyers and sellers a realistic understanding of the market,” Bo says.
Transparency creates trust
Bo stresses that the same information shared with sellers should also be given to buyers.
“When you tell both parties the same thing, it creates consistency and transparency,” he explains. “That’s how you build trust – by showing both sides that your assessment is fair and supported by evidence.”
Why comparable sales are essential
Using comparable sales offers several benefits:
- Sets clear expectations: Buyers and sellers know what to realistically expect.
- Builds confidence: Clients feel more secure when pricing is backed by data.
- Reduces miscommunication: When both parties are aligned, it avoids misunderstandings.
- Strengthens negotiations: Evidence-based pricing makes offers and counteroffers easier to navigate.
Preparing for conversations
For agents, preparation is key. Bringing three carefully selected comparable sales to appraisals or buyer meetings ensures you’re ready to answer questions and address any concerns.
Bo’s tip: Choose recent and relevant sales that reflect the current market. Outdated or irrelevant examples won’t have the same impact.
A practical framework
By presenting comparable sales that reflect a range of possible outcomes, agents can guide buyers and sellers through the process with confidence.
“The beauty of this method,” Bo explains, “is that it gives clients a clear framework – a possible dream price, a worst-case scenario, and what the property is realistically worth. It’s the ideal way to approach pricing conversations.”
Conversations about price don’t have to be daunting. By using the rule of three comparable sales and maintaining transparency, agents can set the stage for smoother negotiations and better outcomes.
Adrian Bo is CEO of Adrian Bo Real Estate Training & Auctions.
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