Nov 16, 2021
In today’s market, houses continue to sell quickly after entering the market. So, if your home isn’t selling, the price might be a factor preventing it from receiving offers. And, depending on the circumstances, a price reduction could be the best way to get the client’s house to sell. But how do you approach the topic with your client? In today’s episode, Jimmy explains how to get a price reduction on your listing.
Be transparent and upfront about the situation.
- Before signing a listing agreement, explain to the client that the price might need to go down.
- Communicate what you're doing throughout the real estate process, like showings, marketing, and meetings. That way, if a price reduction is needed, you can back it up.
- If possible, use feedback from showings to reinforce that the price is too high.
When pitching a price reduction, go to your client with the facts.
- Explain: how the competition might’ve changed, feedback from the showings, and pending actions or situations in the area or the property that might affect their current appraisal.
- If you can provide these elements, you have credibility and can show why the price reduction is necessary.
How to suggest a price reduction:
- Just asking a client to reduce their price without backing it up makes you look unprofessional—instead, present information to show why a price reduction is essential.
- For example, if their house has been on the market for X days, and after X showings, there were X (likely zero) offers.
- Supplement that with statistics from the National Association of Realtors. For example, homes on the market for 3-4 weeks without an offer are likely 10% overpriced.
- Describe other factors affecting their position in the market, like closings in the area, trending prices for similar homes, and the trending duration of time houses are on the market.
- Finally, bring up personal factors that emphasize how a price reduction is the best course of action. The client still pays their mortgage (and thus taxes and interest) and maintenance fees.
Put the ball in their court.
- Remember, it’s their house and their decision if they agree to a price reduction.
- If they decide not to, that’s their prerogative. But after a while, if the house still isn’t sold, you can go back to them and use that to renegotiate.
- After a price reduction, you can relaunch and circle back to people who attended past showings to gauge their interest.
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