Selling Soulfully with Jennifer Allan

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HOW To Recommend a Price Reduction without Risking Your Credibility or Upsetting Your Seller

Price Reduction

Related to a recent blog entitled "READ THIS Before Your Next Price Reduction Recommendation, today's post is about HOW to recommend a price reduction if it comes to that without blowing your credibility, or, frankly, ticking off your seller.

In a perfect world (and why not strive for that?), a price reduction is rarely necessary. In this perfect world, real estate agents price, prepare, and present their properties properly (I love alliteration) and therefore homes sell in a reasonable amount of time without the need for a price adjustment. Agents don't capitulate to the demands of sellers to overprice a home, nor do they "buy" listings with inflated estimates of market value, planning to push for a price reduction six weeks later.

Okay, so it's not a perfect world and L'il Miss Smarty-Pantz JAH didn't always score a 10 on the beam either when it came to pricing her listings for sale. Pricing is an art, not a science; the "right price" is a constantly moving target, and can be affected by many factors outside our control. So, it happens. Sometimes a price adjustment is the right thing to do.

So, what might be some ways to approach the price reduction conversation with your seller without jeopardizing your credibility (hey, YOU suggested or agreed to the price in the first place!) or otherwise creating unnecessary drama and angst between the two of you?

I have a few suggestions, but would like to hear yours!

1. Prepare the seller ahead of time that a price adjustment may be required if the market doesn't respond as favorably to the home as we hope it will. But do this carefully, not with a pre-printed price adjustment form or with a snotty attitude of "Well, we'll TRY it your way if you insist, but BE PREPARED to reduce the price," but rather as if you have just as much to lose as the seller does. In other words, "as if" you're on the seller's team... which you are, right!?

2. If you recommended (or agreed to) a price believing with all your heart that you were in the ballpark, but discover that, um, you weren't, take the blame. Admit that you were wrong and that you're very sorry you got the seller's hopes up. Perhaps something like:  "Bob and Sue, I blew it. I really thought your house was nice enough to overcome XXX, but I was wrong. I'm glad we gave it a try, but I do think we're going to have to reduce the price significantly. Let me tell you what I'm thinking..."

3. As pontificated about in the original blog, it's best NOT to lead with a price reduction as your primary solution, for several reasons. One of those reasons is that if you are able to suggest alternatives to a price adjustment and the seller rejects your suggestions (e.g. stage the home, replace the carpet, mow the lawn, etc.), then you can feel much better about recommending a price reduction because it's actually the seller making the choice to reduce instead of fix or improve.

4. Related to #1, when a seller wants to push the price beyond your comfort level and if he's not too far removed from reality, agree to try his price for a week to ten days, no more. Don't get snotty about it because the fact is, you don't have a crystal ball; maybe the market will respond more positively than you expect! Say something like this: "Okay, let's try it for a week or so. It's a bit higher than I'd like, but I don't want to give away your money if I'm wrong. If we aren't getting the activity we need or if the feedback indicates the price is high, we'll reduce it to $XXX,XXX, deal?"

So... there are some suggestions that worked for me... any you'd like to share with the class?

 

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The More Fun You Have Selling Real Estate, the More Real Estate You Will Sell! 
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Comment balloon 71 commentsJennifer Allan-Hagedorn • November 01 2011 07:51AM

Comments

How many sellers would set an unrealistic price if they were to pay 1/2 of the commision up front based on their price. If they are so confident in the price that they set, they should jump all over that offer and reduce their cost by half. Bottom line many sellers want what they want because they want it and they are not paying for the work to be done; if the house does sell and the price is reduced - the broker will make less spend more money, time and resources. Houses should be priced within 3% of its selling price based on all the parameters. 

Posted by Edward Peterson, eDrake; CT (eDrake) about 7 years ago

Jennifer-these are great strategies to implement the only thing I would add, and I'm sure you know, is that in order to do these things agents need to build a relationship early and continue it. Rather than just picking up the phone and saying we to drop the price. Building a level of trust takes making sure your seller is informed of the changes in the market all along the way.

Nice read!

Posted by Adrian Willanger, Profit from my two decades of experience (206 909-7536 AdrianWillanger-broker.com) about 7 years ago

Jennifer, I loved your earlier blog on price reduction. You have laid out great strategies especially the second one where some agents are over confident of the market and/or they might have worked up the seller to secure that listing. It takes a true professional to admit his/her mistakes.

Posted by Ritu Desai, Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949 (Samson Properties) about 7 years ago

I tend to set up any discussions about pricing in the first discussion I have with a client because there is no "perfect price". We discuss ranges and how we incorporate those into marketing plans and the concepts of time vs. money when listing. It helps to get buy in from your client up front and also to show them the proof of your recommendations in the CMA that you provide with details such as time on market, percentage from original to list to sale price, etc.

Posted by Reba Haas, Team Reba, CDPE (Team Reba of RE/MAX Metro Eastside www.TeamReba.com) about 7 years ago

It depends on your seller.  We need to learn our sellers personalities and then talk to them about the pricing, etc. based on their personalities.  As you suggest, it definitely involves strategy.

Posted by Joy Daniels (Joy Daniels Real Estate Group, Ltd.) about 7 years ago

I can see a slight problem with #2 - "I thought your house was nice enough, but its not" might need a bit of rephrasing to spare some feelings. But general idea is great! Loved the post. Also, another great thing to offer is Staging. This can help SO much!

Posted by Ben Blonder, Buyers, Sellers, Investors! (Broker/Owner, Keller Williams) about 7 years ago

I love how you word things...creates an atmosphere of collaboration rather than confrontation.  And you are so right to state that pricing is quite an art!

Posted by Kathryn Maguire, Serving Chesapeake, Norfolk, VA Beach (GreatNorfolkHomes.com (757) 560-0881) about 7 years ago

I find by emailing my sellers a report every two weeks with charts to show visitors to Realtor.com and other main portals in a pdf format report, as well as my comments on the feedback we got, I almost never have to ask, they ask me. There's nothing worse than the first contact you make after listing being a request for a reduction.

Posted by Corinne Guest, Barrington Lifestyles (Barrington Realty Company) about 7 years ago

Jennifer, I don't usually leave links to my own posts in my comments but my comment was a post in itself, so read my response about The Little House That Won't Sell.

Posted by Judy Orr, SW & Near West Chicago suburbs (HomeSmart Realty Group) about 7 years ago

I always make sure I stress the point that a home is only worth what a buyer is willing to pay.  I also make sure that the seller fully understands that the chances of a buyer only looking at their home is slim.  Then I ask them what they think the outcome will be if they see other homes that they like but are priced for less. 

Posted by Christine McInerney, The McInerney Team, Knoxville TN Homes For Sale (Great Life RE) about 7 years ago

Thanks for the link, Judy! It's a great blog - please do check it out.

Corinne - I agree - and staying in touch with your sellers about market activity is such an important thing to do... yet very seldom done, at least in my experience.

Kathryn - well, thank you!

Ben - oops - you're right! What I mean is that even though the home is SO nice, the market isn't giving it the credit we thought it would merit - or something like that. Definitely not that the house isn't as nice as I thought it was at first ;-]

Joy - Absolutely. But I'm guessing NO seller wants a price reduction shoved down his throat without a little tact ;-]

Reba - perfect! It sounds as if you are a true professional.

Ritu - you know what's interesting when you approach it this way? The seller will typically "share" the blame with you because you are so clearly on their side.

Adrian - Oh, yes - that is SO true. If the agent and seller don't have a mutual trust and rapport, it doesn't matter how you approach the conversation, it won't likely go well :-(

Edward - Interesting concept!!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 7 years ago

Jennifer-Setting the stage in preparing for some of the things that may happen is a great strategy. Good ideas in your post. I'll go read the earlier post too.

Posted by Anonymous about 7 years ago

I cover all the eventualities in my original "getting to know you" stage. When the time comes to adjust (if at all), we go with what we talked about. No surprises for me going in, during, or after or for my sellers either. So far so good...good post and host...

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 7 years ago

One of the beautiful things about working short sales is that my listing agreement gives me the authorization to reduce anytime it needs to be done. i do not have to ask the seller.

On a regular listing you are right that the time to have the price discussion is at time of listing. Make sure they completely understand that "I am not here to tell you what your house is worth I'm here to tell you what it will take to get it sold". This line helps to take the emotion right out of the equation. Then after you have the listing stay on top of it. Send them weekly market reports. Show them in black and white what's happening in the market with similar homes. If you do this weekly chances are the seller will be contacting you to reduce the price.

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) about 7 years ago

Dear L'il Mis Smarty Pantz,  Very well written analysis.  Not so sure I buy the idea of taking the blame.  If all the steps have been followed what is there to take the blame for ?  Well done .

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) about 7 years ago

Jennifer,  The last suggestion on your list, we have always used and found it to be quite successful.  Some sellers just will not budge on their asking price, no matter how hard you try, even using hard cold data to substantiate your price.  thanks for the great blog.

Posted by Susan Jackson (America's Network Realty Group, Inc) about 7 years ago

Jennifer, 

Love the suggestions!  It's not easy having that conversation, but setting the stage ahead of time, working with choices- fix or reduce makes the process a whole lot easier and successful for all. 

All the best, Michelle

Posted by Michelle Francis, Realtor, Buckhead Atlanta Homes for Sale & Lease (Tim Francis Realty LLC) about 7 years ago

I especially liked your second suggestion.  Many times it is our fault.

Posted by Team Honeycutt (Allen Tate) about 7 years ago

Hi Jennifer,

Great post...but I have a comment about suggestion #2.

As we all know, pricing is based on location, property condition and market conditions.  When an agent prepares a detailed market analysis and reviews it with the seller, it should ultimately be the seller's decision on where to price the property.  Then the agent can agree or not to take the listing based on the seller's list price, but I don't believe an agent needs to say "I blew it!" if the buying public doesn't make an offer on the home, that's the market telling the seller that $XXX,XXX isn't the correct price.  It's not the agent's fault. 

There are many factors that can play into a home not selling and while some of those may be an agent's fault, overall the price will be what any buyer is willing to pay and any seller is willing to accept.

Posted by Dan Weis, CincinnatiRealEstateGuy.com (Comey & Shepherd Realtors) about 7 years ago

Hi Jennifer:

 

  Lots of good suggestions. Sometimes, I even have the sellers get an appraisal with a range of value... Then we look at the competing properties, and the solds....   I also, suggest that they allow the office to do a caravan of agents from our office to give "constructive feedback".. All of these things seem very helpful.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) about 7 years ago

Jennifer - I really like your approach and completely agree with you. I am not a realtor and therefore do not price homes but I know that a home which has been well maintained, is properly prepared and showcased (staged) will represent value to the buyer - regardless of the pricepoint.

Posted by Heather Cook, Quality Home Staging (Rooms in Bloom Staging & Design Inc.) about 7 years ago

Jennifer, I am never graceful with price reductions.  So I am going to learn your way and focus on it for a bit.  I will promise you that I will be better at it because of your post.  Thank you

Posted by Steve Warrene, Pittsburgh Real Estate Investment Specialists (Your Town Realty) about 7 years ago

It is tough asking a seller to reduce their price when you helped them price is properly to begin with. It's something different with each seller's situation, so I don't have a script for it.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 7 years ago

All great suggestions Jen.  It has also been suggested to actually draft into the listing agreement, a price reduction of X amount after X number of days/weeks.  That way, you will have certainly discussed the possibility of a future price reduction and will not have to go through the discussion at length a second time around.

Posted by Former Agent (None) about 7 years ago

Jennifer  - I think listing at a client's price that isn't too high makes sense as long as the seller is prepped for a price reduction if the market doesn't respond favorably.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 7 years ago

When the Seller really resists reducing the price after all the ideas mentioned in your blog do not work - I set up showings for other listed properties that are Active so they actually see their competition.

 

Posted by Kathy Toth, Ann Arbor Real Estate Experts - Kathy Toth Team (Ann Arbor Market Center Keller Williams) about 7 years ago
Great suggestions! I thunk the key is creating a partnership with the seller so that a price adjustment is easier to obtain. By showing your seller om a weekly basis what is coming on the market, which homes are selling and which ones are reducing, it is easier to communicate what is necessary for their home to sell in the current marketplace. It is a moving target and pricing can be tricky!
Posted by Karen Feltman, Relocation Specialist in Cedar Rapids, Iowa (Cedar Rapids/Iowa City, IA KW Legacy Group) about 7 years ago

Suggestion #2: yes, it is our fault if we knew the seller’s price was too high and we listed it at that price anyway. Saying it is our fault may be a lie but it save face for the seller. Saving face is big in all cultures.

Posted by John Juarez, ePRO, SRES, GRI, PMN (The Medford Real Estate Team) about 7 years ago

I think your suggestions are good. 

I often mention a price reduction at the time of the listing when we talk about the entire marketing process.  At the listing appointment I also break their net sheet below the list price.  I tell them let's use a "worst case" scenario.  Otherwise they can become fixated on the higher price making an eventual reduction more difficult.

If there is something weird about the house--next to a freeway or a bad room addition--I don't mention the negative element about their home more than once.  I say "buyers are finding homes they like more in this price range, and they're purchasing those".

Posted by Lloyd Binen, Silicon Valley Realtor since 1976; 408-373-4411 (Certified Realty Services) about 7 years ago

Spot on post ! Pricing is an art and no one enjoys chasing the market !!!!!!!!!!!

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) about 7 years ago

Jennifer when i get a listing i provide them with my BPO that shows them a range of values, i prepare them ahead when setting a listing price that if we do not have any showings, then we need to be prepared to lower the asking price to match what comparable homes are selling for.

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) about 7 years ago

Thank you for all your comments! I appreciate all the suggestions for other ways to have the price reduction conversation with as little drama and angst as possible.

Lloyd- I agree with you - don't dwell on the negative - mention it and move on. They heard you the first time ;-] and if they don't agree that proximity to a highway (or whatever) is a problem, repeating yourself isn't going to change their mind. I'll never forget a client who told me to "stop whining" when I kept after her about reducing the price due to a flaw in the floor plan. Ouch!

John - thank you for your comment. I wrote a blog a few months ago entitled "Is it your fault if your listing doesn't sell?" and my contention is that yes, it is. However, upon further reflection, I decided "fault" may not be the right word exactly, but "responsibility" certainly is. IS it my responsibility if my listing doesn't sell? Absolutely. If I took a listing that was overpriced (either intentionally or not) and then was ineffective in persuading my client to reduce it, that IS my responsibility. It doesn't mean I can fix it, but I believe when we agree to take a listing, we take full responsibility for the outcome.

Aimee - I'm not a fan of building a price reduction into the original listing contract unless it's written to go into effect within a week or two. Basically a "let's try this price for a week, but if it doesn't sell, we'll reduce to $xxx,xxx." What I don't like is automatically reducing the price by X% or $X,000 at pre-determined intervals. That just seems unprofessional to me. If, two months from now, the house hasn't sold, I feel I owe it to my seller (and myself!) to do an updated CMA and see what the right price is TODAY.

Steve - I'm so glad this was helpful! And believe me, I wasn't perfect at it either!

Again - thank you all for your comments and suggestions!

 

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 7 years ago

Great points.  I take issue with #2 though.  I make it clear upfront that, as you said, pricing is a moving target and that we will be making an educated guess to get the highest possible amount.  If there is an adjustment, I would take the blame for being wrong.  I don't like the dynamic that creates with the client.  I prefer to frame it as though we are simply moving to the next phase of the plan.

Posted by Kate Akerly, Manhattan Beach Residential Sales (Kaminsky Group) about 7 years ago

Good suggestions! Of course things are a bit easier for me since I specialize and list mostly short sales.

It's a lot easier to convince someone with no equity versus telling a home owner they will receive less cash at closing!

Posted by Michael Collins, CDPE, SFR , Wisconsin Short Sale Specialist Realto (*ROCK REALTY|Broker|Realtor|Real Estate|WI Short Sale Agent*) about 7 years ago

Feedback is our favorite tool. When you get the "overpriced" comments and no offers it pretty much tells the sellers what they need to know. Not hard to convince them then. So we always prep them at the beginning that we may need to adjust based on the early feedback, and then they listen to us.

Posted by The Derrick Team - Indy Metro Realtors, Your Pet Friendly Realtors (Carpenter Realtors) about 7 years ago

Great post.  I thought there were some great tips in there that I can  use in the future.

Posted by Eric Krebs (Surf and Country Realty) about 7 years ago

Jennifer, I hate to have that conversation but unfortunately, sometimes....

 

Thanks for giving specific verbage.  That really helps. 

Posted by Marian Goetzinger, Crystal Coast Real Estate NC (Pine Knoll Shores Realty 252-422-9000) about 7 years ago

I love #3!  Yes, there are several things that can be done before the price is reduced, if the seller will agree.

Posted by Joetta Fort, Independent Broker, Homes Denver to Boulder (The DiGiorgio Group) about 7 years ago

I actually tried a similar approach with a current client, and he was very agreeable at the time.  When the time came for the price reduction, he very emphatically said NOPE, I'm not lowering my price.  Go figure...

Posted by Brad Baylor (ERA Coup Agency) about 7 years ago

Thanks for writing such a great post!  It really helps to get some ideas on verbage!  Oh and I feel the need to re-blog.

Thanks!!!

Posted by Lea Ann Muriset (Prudential NW Properties) about 7 years ago

Good common sense approach.  Thanks for the post.  I like the idea of suggesting upgrades and letting them suggest the price reduction.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 7 years ago

Helpful

Posted by Brett Richman, New Orleans Louisiana Real Estate (Summers/East Coast Realty Group) about 7 years ago

All of your "tips" have merrits... I especially like the #2 - I am human, let's fix it... and #3: just bringing in a handyman to take care of that little crap is probably enough to avoid the price reduction and get top dollar..

Posted by Robert Rauf (HomeBridge Financial Services (NJ)) about 7 years ago

All good points that most AR members are following now, shouldn't they?

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) about 7 years ago

"I don't want to give away your money if I'm wrong". I like that.

Posted by Karen Crowson, Your Agent for Change (Coldwell Banker Residential Brokerage) about 7 years ago

If we don't set ourselves up as having a crystal ball, we won't have to backtrack and admit we don't.  This year, as a member of our firm's relocation team, I've seen a basic 3 BR/2BA starter home require 3 (count-em 3) appraisals for the relocation company to agree on a buy out price.  Less than 60 days days later when we got it sold, a 4th appraisal for the buyer brought in a different number. Definitely, an art form!  Oh yes, and we should always remember, it's the buyer who determines the price!  If anybody is going to take the heat, let's remember to structure the conversation so that the villain is clear. 

Posted by Beverly Femia, Broker Realtor Stager - Greater Wilmington, NC Are (BlueCoast Realty Corporation) about 7 years ago

Beverly in #46:  If YOU were the relocation company, and it was YOU who had to put of YOUR money to buy this relocated buyer's property... how many appraisals would you need to get before you were assured of the property's value... so you could then buy it with as little "worry" about it being "worth it" as possible ?

In this market... three different appraisals for a relo buy-out seems reasonable.

And of course, when a buyer does eventually purchase it, it must be appraised by an appraiser who is on that lender's "approved" list.  They just want to be assured by someone they trust... that this property that they are lending perhaps 96.5% of the value of... is worth it.

It all sounds logical to me.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 7 years ago

Powerful post.

Posted by Tim Klingman, President (North Shore Homes, Inc. (Milwaukee, Wisconsin)) about 7 years ago

The market is fluid, it is ever changing, and revisions based on market response may be necessary.    Sometimes I set up a MLS search range, to send them homes that would come up in a search, based on their home, and let them see what the other homes have to offer, and watch their price reductions.  If I can get them to go look at a few others, great... but watching other prices go down, often cures their resistance. especially as they get "sold".

 

Posted by Gloria Matthews, MAKING CLARK COUNTY HOME (Principal Property Brokers) about 7 years ago

Jennifer:

I had a client who insisted that we price the home about $25,000 over comps.  It was great house which was painted and primped and look very nice.  But it was too high in a market that was trending down.  My client had agreed at the time I took the listing to a price reduction after a month.  Well the month came and went.  My client refused to lower the price.  I emailed recent comps to my client weekly.  This client would not agree to any of my suggestions.  We finally agree to withdraw the listing from the market.  After that experience, I will only list homes that are close to comps. 

Posted by Evelyn Kennedy, Alameda, Real Estate, Alameda, CA (Alain Pinel Realtors) about 7 years ago

Excellent suggestions Jennifer.  Most of the problems we have with pricing continue to be unrealistic sellers that will not face the true facts of today's market.  CMA's or appraisals will not get them to reduce their price and most do not list for sale or just take the property off the market.  Maybe someday their property will again be worth what they want it to be worth.

Posted by Al Raymondi, Ormond By The Sea Florida - Home and Condo Sales (Ocean View Realty Group in Ormond By The Sea Florida) about 7 years ago

Great Way to have the seller's informed and educated. At least they have the info they need.

Posted by Jairo Arreola, VA Home Loan Specialist - SF Bay Area - South Bay (Lotus Group Realty) about 7 years ago

Great ideas for an at times, tricky subject! I tell them too, where I know we need to be. If we go higher than that, then I show them how much online activity we are getting. If we are getting a lot of online activity and no showings, then there is something wrong, which usually is price. Also if we are getting more than 8 showings without recieving an offer, there is something wrong, too.

Posted by Sylvie Stuart, Home Buying, Home Selling and Investment - Flagsta (Realty One Group Mountain Desert 928-600-2765) about 7 years ago

Discussing the possibilities of a price reduction if it doesn't generate any offers up front is a good idea.  Inflating the price to get the listing is a very bad practice.

Posted by Michael Singh,Broker (Singh Real Estate) about 7 years ago

Evelyn in #50:  What I would have done with your seller is had her sign a $25,000 price reduction right there at the listing table when she listed her home, and agreed to the price reduction.  Then, it's done, and you don't have to contend with it later.

Also... you said you "emailed the comps" to your seller.  Do they live out of town, or near enough for your to drive to them, and show them the comps in person.  Just wondering...

By the way... what was the listing price of the house... just to know what we are talking about... ?

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 7 years ago

Evelyn, I might also "reverse" on the seller.  Just ask her IF... you found a buyer who agreed to pay her price, and then she actually WAS the appraiser, and had to submit three comparable sales to support the price and get the loan approved... which three would she submit?

Well... they are not there TO submit.  So, she would end up telling you that there weren't any comps.  You then ask her how it was supposed to appraise ?  She would have to tell you that... "it wouldn't... because it couldn't."

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 7 years ago

Of course, you would do an updated CMA to determine the appropriate price at the time of the price reduction.  However, there are situations, as you said, where you know from the initial listing, that it is over-priced, and you also have some idea of where it should have been positioned in the first place.  How many Sellers think one to two weeks is enough time on the market to reduce?  And, in asking that, I am not being contrary or facetious. 

Posted by Former Agent (None) about 7 years ago

Excellent suggestions - And good idea to read your blog BEFORE YOU PRICE a home - SO you don't have to eat your words later!  Thanks!

Posted by Marcia Kramarz, CDPE,LMC,CBR (Re/Max Executive Realty) about 7 years ago

Great Post.  Take the blame, you listed it at that price.  I will take a reasonably over priced listing, but I always lay the ground work for a possible reduction if we are not getting "boots in the door'.  If there are no showings we need a quick reduction to drive some traffic.  If this is not agreeable, then get it off the market as we are wasting time and the longer it stays on at the wrong price, the lower that price will have to go to eventually sell it.  It rarely fails to happen this way.

Posted by Ric Mills, Integrity, Honesty, and Vast Real Estate Knowledge (Keller Williams Southern Az) about 7 years ago

Boy, I have to say pricing here in S. Florida to me takes on a whole different word. I've read a lot of posts about how to price, but with all the REO's and Short Sales it really is anyone's guess. REO companies price the property in some cases 100% below what it sells. Short Sales in a lot ways the same. The industry down here has turned into a glorified Auction House.  

Posted by Winston Heverly, GRI, ABR, SFR, CDPE, CIAS, PA (Winston Realty, Inc.) about 7 years ago

Hi Jennifer, What a great blog.  Really like your suggestions and will use them on next price reduction.

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) about 7 years ago

Interesting the differing viewpoints on "taking blame." I think it's a matter of your own comfort level and personality. For some people, saying "I blew it" just wouldn't suit their personality in the situation and that's just fine. It obviously doesn't fit all circumstances either. But when I truly feel that I made an error in pricing (hey, it happens), I have no problem taking responsibility for that and moving forward. Oh, I don't make a big fuss about it, I just confidently confess to missing the mark and presenting my new opinion based on the feedback, etc. I've never had any push-back from it - in fact, sellers seem to appreciate my honesty and willingness to accept responsibility.

Regarding getting agreement to a price reduction ahead of time if things aren't going well, I would never make it a 30-day thing. I make it clear that we're trying a price I think is too high and that we should have our answer within a week. Of course, this assumes that there IS a market for the home - that is - that there are buyers for it if it were priced right. If it's normal in your market for a home to only get a showing or two a month due to lower buyer activity, this approach probably won't work.

But of course, as many have mentioned, the BEST way to ask for a price reduction is to NOT ask for a price reduction - because you hit the target on Day One! Let's shoot for that!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 7 years ago

as far as the Blame piece.... I had a deal from hell in August.  I called every one involved and said: "I wish it was my fault so I could say I am sorry and fix it, But it isnt"  When 3rd parties screw up and you are waiting for them, and pushing them constantly to do their jobs.. That is almost worse than just fixing an oops that may have been your fault!

Posted by Robert Rauf (HomeBridge Financial Services (NJ)) about 7 years ago

I LOVE it Robert!!!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 7 years ago

Jenn - realy love your 'dont want to give away your money...and your talk from the heart '...being wrong on the price'.

That powerful statement in combination, clearly shows a veritable change in energies and frequencies on a DNA level - and more over - the seller will significantly appreciate and value the congruence of being honest and truthful with her/him.

"Riding" on the same frequency, matching frequency with frequency creates that attraction and balance, around our clents, or loved ones and at the end builds ways on the music of life for new opportunities, for growth, ecstasy and abundance for all.

That's called pioneering and a build up of trust inside ourselves, which then energises the client - for without faith we can not promote the service to get that price right!

Loved all the brilliant ideas, suggestions - please stay with me - I'm in the middle of writing assignments - and when the fleeting moment of time is right, then I'll merge again full ship towards new territories and challenges. Buy then, the economical problems in the Euro-zone should be cleared, Greece back on it's feet, and Spain, Portugal and Italy re-systemized. And America's economy, among the weaving of challenges and eco-political puzzles - full speed ahead. Cheers from Perth - W.Australia

Posted by Peter Michelbach about 7 years ago

nice insight into a difficult situation - especially in today's market

Posted by Paddy Deighan JD PhD, Paddy Deighan J.D. Ph.D (TimeshareLawyers.pro) about 7 years ago

Preparation, preparation and more preparation. Put yourself in the sellers shoes. I have been there myself.

Posted by BILLY CRITTENDEN, Broker/Owner,ABR,CRS,CNE,CNHS,GRI,RCC,SFR,SRS,SRES (Missoula Valley Properties, LLC) about 7 years ago

I got a listing and the seller decided she had to start at $20,000over the agred upon price. I said we would try it for a week or two. Well, after two weeks she wouldn't reduce. She also lived in the home and would only allow me to hold it open on Sundays. I finally used comps and got her to reduce it to the starting price. She said she wouldn't "give" her home away. Finally after losing the summer I was able to use a new listing in her subdivision to get her to come down. We got a great buyer and closed. I showed a lot of compassion for her during the process because she was losing money on a home she put a lot of heart and mpney into. I think it helps to keep showing them comps but to also try to understand how painful price reductions are for our clients. I also told her that it wouldn't appraise at the higher price because the comps didn't support it.

Posted by Denise Montalvo, Realtor on the Move – Keeping Pace with the Market (Bradley Real Estate ) about 7 years ago

Since we don't have crystal balls we chose to put the price reduction in the listing agreement so that the price will be reduced monthly.

Posted by Charles Stallions Real Estate Services, Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl. (Charles Stallions Real Estate Services Inc) about 7 years ago

Great post and great comments! I always like to hear different points of view.

Posted by Wayne B. Pruner, Tigard Oregon Homes for Sale, Realtor, GRI (Oregon First) over 6 years ago

I use the same technique. I present comps just in numbers using Excel look. Than they are just numbers and no one can not argue with that. I present my case comparing identical houses and let them decide. If they resist our suggested listing price, I tell them: I'm willing to list your house for any price you want. Just know that if in three weeks we have no activity, we'll need to adjust the price. Just remember, that many opportunities might be lost during this time. 

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Calabasas CA (Barcode Properties) almost 2 years ago

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