Mastering Real Estate Pricing Strategy & Securing Reductions
Interest rates are going up.
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 real estate pricing on today’s #TomFerryShow.
Not only how to get sellers to agree to the best price initially…
…but also the perfect real estate scripts to get those much-needed price reductions.
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Why Your Real Estate Pricing Discussion Must Go Beyond Price
We both understand that focusing only on price is not advisable.
There's always an agent who will offer an unrealistic price to entice the homeowner emotionally into a listing. That's why it's crucial to show how you stand out during a real estate listing presentation.
Like this listing script for real estate:
“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…”
After thoroughly detailing your marketing strategy and securing the homeowners' agreement, revisit the pricing discussion. I suggest implementing my three-part strategy as described 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?
To earn the right to request a price reduction, it's essential to maintain ongoing, consistent communication with the seller regarding current market conditions, such as new listings, price reductions, and sales.
You can only reasonably ask for a price reduction if the seller is fully informed about these factors. Begin by requesting a meeting to review the process. Walk them through all the figures and provide a thorough market update. 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. Let them speak.
If you’ve gained their trust, they will likely seek your advice. At that point, you say, “I strongly suggest we adjust the price to match what buyers are prepared to pay in this market.” Then, propose 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.
Having the right real estate pricing strategy is crucial, but it’s equally important to ensure clients have access to clear, data-driven insights. A common problem agents face is addressing pricing issues that arise due to market fluctuations or unrealistic expectations. By actively seeking feedback from buyers, sellers, and market trends, agents can fine-tune their pricing strategies to maximize value and ensure successful transactions.
How do you handle price reductions? Let me know your thoughts and your biggest takeaway from this episode in the comments below!
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