Let’s Talk Pricing: Ideal Initial Strategy & How to Get Reductions – #TomFerryShow
July 3, 2018
Interest rates are creeping upward.
Homes in certain markets are taking longer to sell.
These factors may or may not be impacting your business.
But we know real estate is cyclical, and we want to stay ahead of that curve.
That’s why I’m talking pricing on today’s #TomFerryShow.
Not only how to get sellers to agree to the best price initially…
…but also the perfect script to get those much-needed price reductions.
Why Your Pricing Conversation Shouldn’t Focus Solely on Price
You know it. I know it. Competing solely on price is never a good idea.
There’s always bound to be an agent who comes in and promises a completely unrealistic price to emotionally hook the homeowner into a listing.
That’s why it’s important to demonstrate how you’re different when on a listing presentation.
Like this: “Mr. and Mrs. Homeseller, I could line up 1,000 agents out your door, and we’re all likely to give you a price within one or two percent of each other because we’re all looking at the exact same data. That’s why you’re not hiring someone for the price they tell you, but to market your home and expose it to the largest possible number of qualified buyers. So let’s talk about how I’m going to market your home…”
Once you’ve explained your marketing strategy in depth and gotten the homeowners’ buy-in, then come back to pricing.
I encourage you to use my three-pronged strategy as outlined in this script: “Most agents have one pricing strategy. I believe there’s actually three. You can price your home above the comps, which I call the ‘needle in the haystack’ approach: You’re hoping just the right buyer comes along and falls in love with your home enough to buy it at an above-market price. You can price it right in line with fair market value. Or… For my most savvy clients, we price it just below market value to create a bidding war opportunity. Of those three pricing strategies, which is better for you?”
Your Listing Isn’t Selling. Now What?
I believe the only way you earn the right to ask for a price reduction is to maintain constant, consistent communication with the seller about current market conditions, including new listings on the market, new price reductions, new sales, etc.
Only if you’re keeping the seller up-to-date and in the know on all of that can you reasonably request a price reduction.
To do so, start by asking for a meeting to review the process.
Take them through all the numbers and provide a comprehensive update on the market.
Then say this: “So here’s what we have to decide. Right now the agents in the marketplace, the overall market, and most importantly, the buyers have rejected our price. What would you like to do?”
Then… shut up.
Wait for them to talk.
If you’ve earned their trust, they’re going to ask you for your recommendation.
Then you say, “I’m going to strongly recommend we amend the price to be in alignment with what buyers are willing to pay in this marketplace.”
Then present the new price you recommend.
Skills Matter More Than Ever
I’m definitely not being negative about the market here.
I’m being realistic. An adjustment is coming at some point. And I want YOU to be ready.
Because when that happens…
…Skills will matter more than ever.
…Knowing what to say will take on added importance.
…Understanding how to package and position yourself will be essential.
And knowing how to inform, empower and educate your customers to help them make the right choices will be critical to your continued success.
How do you handle price reductions? Let me know your thoughts and your biggest takeaway from this episode in the comments below!
The more efficient you can become in your business, the more success you’re going to enjoy and more money you’re going to make. With that in mind, we’re introducing you to our complete list of best real estate apps for agents that can help you take your business to the next level. The video above […]
Whether you’re a brand-new realtor with a fresh license or a seasoned professional ready to grow your team, one thing is for sure – you need to incorporate a good real estate lead generation process into your real estate marketing strategy. Like anything else, the technology behind lead generation is constantly evolving, and it can […]
Welcome to the Local Business “Leg Up” Challenge. There are no rules. There’s no hashtag. There are no prizes. It’s just about doing your part to help fellow entrepreneurs in need. While we in real estate are fortunate to be able to continue conducting business and triumphing in the face of adversity, many others don’t […]