Coming to an agreement on price is usually one of the harder negotiations that plague most seller-agent relationships. Sellers think their agents price too low while agents think their sellers are asking way too much. Ultimately, it’s the buyer who will decide how much a house is worth. Here are a few suggestions on how to reach a compromise that both parties can feel good about:
Meet on neutral ground
When discussing what to list a home for, sellers will be less inclined to take constructive feedback about their home while sitting inside it. It’s best to change the setting and meet at at your office or a neutral setting, like a coffee shop. It will help to take the emotional response out of the equation and then you can have an honest discussion.
Get a second opinion
If you are in a listing presentation, make sure you have a well prepared CMA with you so you can refer to that data. You can site specifics with the sellers so they know how well researched your pricing opinions are. If you are looking to suggest a reduction, have other agents preview the home. Coordinate it so that your seller is present to discuss the results of the preview with the other agent. You can remain silent and let them share their unbiased opinion. If at that point your seller is still not on the same page as you about price, it might be time to reconsider keeping this listing.
Set goals up front
In a low inventory market, a well-priced home will get offers relatively fast. Some sellers feel like they can test the market by pricing higher and hoping for a bigger payday. This can lead to a house sitting stagnant so it’s best to make a plan up front that you both feel is reasonable. Discuss how many showings of the property that lead to no offer would be acceptable before a reduction is in line. Set the expectation up front so the seller knows the benchmark they need to reach.
Pre-schedule price reductions
You can take it a step farther and plan ahead for pricing changes. If the property isn’t sold by the 10th showing, reduce the price by $5,000 or reduce by 3% every three weeks it goes unsold. If you have a seller that insists on pricing high, locking in a price reduction schedule will help ensure you don’t waste your time and marketing efforts with a listing that will sit for months.
If a new house comes on the market, your seller should know. If it goes under contract, call your seller. If a comp lowers their price, your seller should get a text. They need to know everything going on in their market so if the conversation about price reduction comes up, it should not be a surprise and if they are well-informed, it might even be the seller’s idea.
Change your photos with price reductions
Once your price drops, change your online photos. Especially the main photo. This is what rolls out to all the MLS’s so it’s important to grab the attention of people that already skipped over your listing previously due to price. If they recognize the picture, they will scroll right past. You can also change up your listing comments slightly and add or modify your keywords to help people search for your listing.
Charge a marketing fee
This fee can be refundable once you close. By letting potential sellers know up front they have to shell out $200 - $300 for your marketing services, they are more likely to take your suggestions seriously because they have money on the line. This tactic is not often as effective in higher priced markets but does seem to work better in lower priced markets.
Not every option will be a perfect fit for your specific situation. But the next time you are struggling to have those tough pricing conversations, it will be a lot easier if you have already had clear expectations from the start.