Getting clients to reduce their price is not a mystical happening. It must be done methodically. Top-gun agents have a set system to get price reductions. It is followed to the letter no matter the price of the property, economic conditions of the market place, or the client. There are five steps to set-up a good price reduction system.
Step one: Get it priced right when you list the property. Tell the seller the truth about the price. Be compelling and convincing in your conviction about the price. Make the seller understand that the other agents want the listing and will beat them up on price later. They merely want their sign in the ground. You want a sale and a satisfied client and you are willing to tell them the truth up front to get that.
Step two: If you decide to take the home overpriced initially, then get a price reduction signed for a future price and date. Get the commitment that if in 30 days the home hasn’t sold, they are dropping the price to a new price. Push to get it signed and done. This commitment will avoid discussion later. If you do discuss this but don’t get a signature, you will have at least laid down the foundation for a discussion regarding reducing the price at a later date.
Step three: Get the sellers to agree to meet with you at your office every 45 days to discuss the price of their property and showings. This meeting will give you an opportunity in your environment to get the price needed to sell the home. By getting them to your office, you have control and invest less time, which is your most precious resource. When they come to your office the meeting will be shorter and you will save at least 30 minutes in drive time.
Step four: Create a specific price reduction campaign of letters and phone calls. This campaign should start no later than 30 days after the listing is taken. The clients should receive information and guidance about the dangers of over-pricing their home. They need to know the importance of price in the sales process, even if you clearly explained this during the listing appointment. Remember we are judged by the results of getting the home sold. If the price is hindering your success, your client needs to change.
Step five: This is the final step. The clients have not been cooperative with getting the price down. They have met with you and received a few steps of your price reduction campaign. Send them the final letter. The letter should state that you have included a price reduction form with your recommended price and a form to cancel the listing, and ask them to please sign one of the forms and send it back.
When I was an agent, we used to get about 65% that signed the price reduction. We had about 35% that wanted to cancel their listing. The 65% sold at the reduced price when they would not have before. The 35% we saw on the expired list months later. Clearly, our over-priced listings had no value. Yours will only cost you money and, more importantly time, and emotional energy. Don’t allow clients to dictate the conditions and success of your business by their refusal to look at the facts objectively. Reduce your expired listings by reducing the price. Price will always dictate all the other factors in the sale. Control the price today.
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