No homeowners want to hear that their home is overpriced, so the efficient use of tested price reduction scripts, dialogues and techniques are necessary for real estate agents to serve the best interests of their clients by telling them what they don’t want to hear. When a home is listed for sale for too long, price is typically the problem. The right price can mitigate all concerns over a home’s size, condition, amenities or location, so we will examine some of the price reduction scripts and techniques top producing agents use to get homes priced to sell.
Set Expectations Beforehand
A discussion about a price reduction should never be a surprise. Set the proper expectations at the initial listing appointment by explaining the concept of the magic month. Provide detailed multiple listing service (MLS) data reports illustrating how the vast majority homes sell within the first month of being on the market. Explain that if a home doesn’t sell in the first month a price adjustment is typically needed. Please also note the importance of using more positive terms like price adjustment, price improvement, or more competitive pricing to preemptively remove the negativity surrounding price reduction conversations. It is also wise to proactively contact sellers weekly to tell them about the results of your marketing activities, any feedback received, and the number of showings and website views. If sellers are made aware that people are viewing the home with decreasing showings and no offers, they are more inclined to own their pricing problem and not blame your marketing efforts. By the third or fourth week you should start expressing your concerns about the price and suggest meeting soon to re-examine the comparable listings and sales in the area. In the following video, our top producing agent panel discusses some of their best price reduction scripts and methods.
INITIATE THE PRICE REDUCTION CONVERSATION:
“Thanks for meeting with me, it shows me that you’re also concerned that your home is not sold. On a scale of 1 to 10, how honest do you want me to be?” (Assuming the answer is 10, continue . . .) “Great, because other agents might price a home too high to get or keep a listing, but my job is to get your home sold for the best price possible & protect your best interests. Is that fair?”
COMPARE LISTING RESULTS TO MARKET STATIST
“We’ve had _____ views online, _____ showings, and ______ offers to date. According to National Association of Realtors statistics, we know that when listings have a low amount of showings a home’s price is 10% too high on average. Similarly, when homes are getting showings but no offers, a home is priced 5% too high on average. So if you’re getting views and/or showings, we know the price is the problem. Does that make sense?”
RE-DISCOVER MOTIVATION FOR SELLING:
“It appears that the market is rejecting our price. So tell me, is it still your intention to sell your home to _____________? (insert motivation here; ie.- move to a better school district). Don’t you think we should do something about this immediately so that you can __________?” (state motivation again).
ESTABLISH THE REDUCTION AMOUNT
“So do you think we should roll the dice to see if a 5% reduction makes a difference, or play it safe by making an impact with a 10% adjustment so that you can can ___________?” (insert motivation for moving again). Note that these percentages may be too high in many circumstances, but sellers are likely to feel much better about a 2.5% reduction when they are made aware that a 5% reduction is the national average.
“I don’t want to recommend that you “give it away”, though we need to make a price adjustment that will cause your home to sell now instead of having to make a larger reduction 60 or 90 days down the road. Remember that I work for you, so this must be your decision. So tell me what you are thinking . . . should we adjust by 5%, 10% or 15%?”