Real Estate – Getting Price Reductions

Getting price reductions can be quite the challenge in the field of  real estate. However, with today’s market conditions and lower interest rates, more and more people have an interest in new or step-up homes. That means they must first sell their present homes. The challenges arise when they want the best of both worlds — the highest price possible for their used home and the lowest price possible on their next home. You, the listing Realtor®, have the enjoyable task of bringing a bit of reality into their lives by getting them to list their existing home at a reasonable investment — by reasonable, we mean reduced from what their fantasy amount is.

How do you get a price reduction? You do it by setting it up early in your listing appointment. That’s what the people who list with power do. Set it up going in. Do that every time you take a listing unless they are already prepared to list at market value when the general outlook and seasonal pattern indicates steady or rising prices.

Now, you can’t do this just with words. You have to back your words up with statistics. That’s why I teach my students to extensively research the values of property in the area and present the findings in a professional manner. If you cannot get the sellers to agree to the reduced amount, make certain they understand that you are not endorsing that amount. Get the seller to initial a comment to that effect on the Comparative Market Analysis while taking the listing. The wise agent also gets a commitment from the sellers to consider a price reduction if no genuine buying interest has developed after an agreed period of time.

When should you seek the price reduction? Just as soon as it’s apparent that the seller’s price is too high. Let’s face it. If their property isn’t moving, it isn’t doing either of you any good. “How long should that be?” you ask. You should already have the days-on-market figure on your CMA. Figure out the average length of time a property has been on the market in that area before it sold at market value.

When sellers first consider listing their properties, they don’t often set a deadline for when they want the property sold. It’s more important to them to get their price than it is to move the property quickly. Your job as a professional real estate agent is to help them set a goal for a date of sale, then show them the asking price they’ll need to consider to reach that goal. In determining the date, don’t use 60- or 90-days. Use events. Most people think in terms of holidays or other pertinent events. Ask if they want to move before Thanksgiving, or before the children start school, or in time to spend the summer in their new home.

Once you have the time factor commitment, show them the column on your Comparative Market Analysis that lists Days on Market. You might say something like this, “Mr. & Mrs. Jackson, it’s important that you both consider this column because it tells us a lot about the relationship between market price and speed of selling. I know that speed isn’t as important to you as price, but it’s at least possible that your attitude on this will change — or that the situation will change — making the timing a crucial rather than a minor consideration for you.” Then, start showing the comparison between asking price, days on market, and selling price.

Do you see how this works? Without directly saying so, you tell them that for less money than they’re asking, people can buy a home that offers the same or more in location or amenities. And, at the same time, you’re making vivid points about how overpricing will take them over their chosen time limit.

Copyright Tom Hopkins International, Inc.