Price Reduction Conversation Tips

For some time now, agents have not had to worry too much about price reductions. As a matter of fact, if you’ve been in the business less than six or seven years, there is a good chance you’ve rarely had to lower prices on your listings. This isn’t meant to say that the initial pricing of the listing doesn’t require skill, experience, and discipline as an agent. Some sellers had atmospheric price expectations that often had to be brought down to reality. However, the market is changing very quickly,and there is a good chance you may have to be prepared to have a pricing conversation with your client if their home isn’t selling. Here are a few strategies to help you with “the talk.”

Set expectations up front

The earlier you set the expectation,the better. This is best done when you first meet the prospective seller and give your listing presentation.Let the seller know your pricing strategy and how and when you will conduct a price reduction. Use statistics and facts as much as possible. Ask the seller (carefully and thoughtfully) to put themselves in the shoes of the buyer. You can also have “the talk” when getting a listing agreement signed. Some agents even put pre-determined price reductions in the additional provisions of the listing contract. Of course,make sure you consult with your managing broker when doing this.

Ask questions

Will you still want to sell if you have to lower the price by $30,000? Is selling at a later date an option? How long are you comfortable waiting at the current price?Asking good questions before you start the dialogue will save you from assuming you know what they are thinking.

Consider the communication medium

A price reduction conversation can be delicate. Put yourself in the seller’s shoes. You are letting them know they are not going to get their desired selling price. This realization can be emotional,and an email or text will not give you the ability to answer questions, give expert opinionsand comfort them. This conversation is best either over the phone or in person.

Price it right

The best real estate professionals price their listings correctly. Be honest and strong from the beginning. If the potential seller still thinks it’s 2021 and wants to list $100,000 over your market analysis, maybe you don’twant to take the listing. Defend your pricing strategy and stay strong from the beginning. The market in some places is changing very quickly, prices could be adjusting more than anyone expected and if you believe strongly in a big reduction,then you should tell them the truth.

A listing price reduction, while not common practice in the past few years, will become the norm throughout the next few years. A good strategy, a plan, and a little practice on your end will give you an advantage when the time comes to have “the talk.”

After a successful career as a top-producing real estate agent and building a mid-sized real estate company in Colorado, broker and owner Nathan Froelich and his business partner sold their company. Then, they followed their passion for helping those in the real estate industry by founding Breakthrough Broker to help real estate agents, title companies, and mortgage companies build successful businesses.

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