RealTorch › The 15 Functions › Pricing
Function 07 of 15Pricing
Pricing decides how buyers perceive you, how many homes you sell and how much revenue each one brings. It is a senior-management job, not a spreadsheet job.
Pricing rests on three pillars: competitive (it holds up against the alternatives the buyer is actually shopping), logical (a buyer can see why one home costs more than another), and consistent (the same logic applies across the community, every time). Break the third and your own sales team stops being able to defend the first.
Lot premiums are where most of the judgment lives. The rule is value, not cost: a premium reflects what a homesite is worth to a buyer, not what it cost to develop. Every lot is unique, so pricing runs tier by tier using the bookend method — price the best lot in a tier, then the worst, then fill the middle — and finishes with cross-tier pairwise checks to catch the pair that makes no sense next to each other.
Three pillars
Competitive, logical, consistent. The third is the one that erodes quietly.
Value, not cost
What the buyer will pay for the lot, not what it cost to make it. Those numbers are unrelated.
Bookend the tier
Best lot, then worst lot, then fill. Pricing lot by lot in list order produces drift.
Recalibrate on sales
Every four or five sales tells you which tier you mispriced. Waiting for the phase to close wastes the signal.
Atlas in action
Forty lots, one afternoon, and a premium schedule the sales team can defend to a buyer standing on the lot.
Four tiers, $0 to $34,000, and two lots I'd re-tier before you publish.
I scored all 40 lots on size, shape, topography, micro-location, trees, orientation and view, then bookended each tier. Total premium capture is $486,000 across the community, 4.1% of gross revenue. Two calls worth your attention: lot 22 scores as an A on size but backs to the lift station — I moved it to B and priced it at the top of that tier. And your three cul-de-sac lots aren't equal; lot 37 sits at the deep end with woods behind it, lot 35 looks straight down the street at the amenity parking.
| Tier | Lots | Range | Rationale |
|---|---|---|---|
| A · Premium | 6 | $24k–$34k | Woods behind, deep cul-de-sac, no rear neighbour |
| B · Above standard | 11 | $9k–$18k | Larger yards, favourable orientation |
| C · Standard | 17 | $0–$6k | The community's baseline lot |
| D · Compromised | 6 | −$4k–$0 | Corner exposure, grade, utility adjacency |
| Capture | 40 | $486,000 | 4.1% of community gross |
- !Lot 22 · A → BLargest lot in the phase, but it backs to the lift station. Priced at the top of B ($18,000) instead of the bottom of A.
- !Lot 35 · not a true cul-de-sac premiumSits at the mouth, sightline down the street to amenity parking. $9,000, not the $26,000 the other two carry.
- ✓Lot 37 · holds at $34,000Deep cul-de-sac, woods to the rear, widest usable yard. This is the lot the tier is bookended from.
Composite example. The method is the published lot premium methodology in the knowledge base — score, tier, bookend, fill, cross-check — run against a plat and an attribute sheet.
Every lot is a pricing decision you only get to make once
Atlas prices the whole community at once, keeps the logic consistent across tiers, and gives sales the one-line reason each premium exists.
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