Three tips to help show your seller why they should adjust their price.
How can you convince your seller to lower their price? A few months ago, our market heavily favored sellers. They could put up whatever outrageous price they wanted and still expect cash buyers to come flocking in with offers that were way above the asking price. Now, that’s no longer happening. If your seller sets the price too high, there’s a big risk of their house sitting on the market for a while. As their agent, how can you convince them to lower the price? Here are three things you can do when talking about price reductions with your clients:
1. Manage their expectations. Let your seller know that when selling a home in a shifting market, prices are much less predictable. Discussions about price reductions should be held right from the start to set your client’s expectations. Tell them at the beginning that if a home is not getting enough traction, it normally goes through a price reduction after 14 to 21 days. Assure them that you will give them weekly updates on the numbers.
If your client is still resistant, let them know they can test a price before putting it on the market. To do this, post on Zillow Coming Soon for five to seven days, then evaluate the ratio of saves to views. If the price is right, the ratio should be at least 3%. If the ratio is lower, the price is likely too high, and if it’s over, the price is likely too low.
2. Maintain constant communication. Since you’ve already prepared them for what may happen, the blow of a price reduction will be easier to handle. Present to your seller the facts about the market that will back up your claim. The best way to do this is to set your seller up with a buyer search for all homes for sale at their list price or lower. Then they’ll be more prepared for your evaluation of the situation. Show them their options, emphasize how a price adjustment can dramatically improve the offers you get on the property, and highlight the risks that come with sticking to the same price. However, keep in mind that your seller should still feel in control of their choices despite your pushing for a price adjustment.
3. Find the correct price adjustment. In the end, the decision on how much of a price reduction should be made will depend on the seller. As their agent, you’re the expert your client will rely on for guidance. You have to offer your market expertise and share the latest data on comparable sales in your area. How you educate your seller will be crucial when determining the price adjustment. Also, know that typically, the minimum price reduction that moves the needle is 3%. Plus, success at showings might indicate that your price is off by 5% to 10%.
Price reductions can be a tricky subject, so agents have to broach these conversations strategically. By following these three tips, you’ll never have to worry about having your listing expire. If you need more help on how to talk to your clients about price reductions, call or email me. I’d love to connect with you. Also, remember to not just be the agent—be the expert.
