“We want more $$$“...pricing a home properly these days is more challenging than normal. Two main reasons:
a) With the shortage of listings and competitive offers it’s hard to predict the ultimate selling price.
b) Sellers can get delusions of grandeur when they hear all the stories about what “the house down the street sold for”.
Add to that the normal challenge that most Sellers believe their home is worth more than the market will support anyway. So what to do when your Seller says…“We want more money”?
Let’s look at the reality of pricing wisely from a basic level. The market and the Buyers decide whether or not the home sells…and at what price. No amount of fancy advertising and social media coverage or unique marketing can change that. Like it or not, the reality is … price is king.
Some Salespeople follow a plan of “buying their business” …..meaning, take it at any price just to get their sign on the lawn. So how do we compete with the Salesperson who consistently takes listings that are obviously overpriced? You need to “fight fire with fire”.
Here is your ACTION STEP... there are really three strategies you can follow:
a) take it overpriced and hope for the best (a bad choice)…or…
b) convince them to price it properly…or…
c) use a progressive strategy.
Not a bad choice these days if you manage the process properly. In some markets…it is wise to take the listing (as long as you are following a plan). Here’s how to make Plan C work for you.
Follow these 6 simple steps:
1. Get “their price” when using your Prequalification Script. No surprises this way (ie: “Mr. Mrs./Mrs. Seller, based on your understanding of the market, what price range do you feel your home fits in?”).
It doesn’t matter if their answer is unrealistic. You need to know what they’re thinking up front. This is how you can determine what objections you’ll need to deal with.
2. Only work with those that are Motivated. Do they really want to move?
3. Present a simple but clear CMA (one page is best)
4. Once they understand the competition, ask them where they want to price it.
“Now that you’ve seen the competition, where do you think we should price it to be competitive and still get you the best price possible?”
5. If they still want to overprice it (and you are satisfied with their Motivation) consider taking the listing at a higher price…as long as you include #6 (below).
6. Critical point #2: Before you leave there must be a strategy to reduce their home to the right amount in two weeks. Establish the exact date as part of the strategy. Make sure they are on board with this approach.
Be selective about breaking your rule of “not taking overpriced listings” (ie: must be highly Motivated and will reduce in two weeks to your price).
If your RE Board allows it, a good approach following point #6 above is to have the Price Reduction signed at the same time as the Listing Agreement is signed. That way you are not “buying their business”.
Stay in control. You are merely helping them do something in an effort to create a win/win. NO Excuses.
Question for You...where are we headed? Do you see the usual increased inventory coming on this spring creating more balance? Or…will there still be many more buyers than listings?