Pricing a home, arguably, is one of the most important jobs you do in taking a new listing. Price it too high and it will sit there for months, leading to an angry customer and a lost listing. Price it too low and it will get snapped up, leaving money on the table.
In our last article on pricing, we discussed how to collect good market data about pricing and economic trends in your market that support the price you are recommending for their home. This step gives you the information you need to price it correctly and helps reduce customer resistance to your advice.
Still, many agents like to know exactly what to say to the customers, especially if they fear that the customer is going to question the price named. This can happen for many reasons: because prices are softening; because prices are higher in the market where the customer is headed; because the customer has borrowed too much money against the house and needs a certain price to pay off the loan; or simply because “a neighbor got more for his house.”
Here are some specific ways to present your price suggestions persuasively:
Establish a common objective:
Let the customer know you have the same goal in mind in selling his/her home. Tell them, “Mr. or Ms. Seller, we’re in business together when we list the property. We’re not here just to put up a sign. We’re here to sell the property for the highest price possible in the least amount of time with the fewest hassles possible. Is that what you want as well, to get this property sold?”
Set the stage for correct pricing:
Many customers believe that marketing is the key to selling their home. That’s true only if the price is correct. Ask them if they would buy a car that was $10,000 higher than the same model on the lot next door, just because they saw an ad for the more expensive car. Of course not!
Show CMA data; then talk about feelings:
The next step is going over your comparative market analysis. But before you start, let the customer know you’re not going to “push” a certain price on them and that you are open to their perspective by saying this: “Let me show you what our research has discovered; then we can talk about your feelings on price.”
The market will tell you if the price is right:
Once you’ve named the price, let the customer know that the market will indicate if it’s correct. You can say: “According to the National Association of Realtors, if your house is priced correctly, we should get one offer for every 10 showings, and in a normal market, we should get one or two showings per week. If we don’t get showings, the market is telling us we need to adjust the price. Also, if we get 10 showings and no offers, we’ll have to look at the price again.”
Give your customer a sense of control over the price:
Let customers know your price is a suggestion and that they have control over the decisions, but there are costs associated with setting it to high. It will take longer to sell their house, and that may disrupt their plans. Try saying, “As I understood it, your goal was to be out of this house in five or six months. If we set the price higher, it may take longer than that to sell it. It doesn’t make any difference to me, because I’m not going anywhere – I’m going to be here selling real estate 10 years from now. I just thought it was important to get you the most amount of money in the least amount of time possible with the fewest hassles and send you on your way with your family. Is that correct?” (Yes.) “You decide how long we want to be on the market, because you pick the price.”
All of these scripts have been tried and tested by top-performing agents in their own markets, and they work. You may or may not like using the exact words we have suggested, but try them out if you are having trouble with pricing discussions, and see if they work for you.
Howard Brinton is a real estate sales motivational speaker and the founder and CEO of Star Power Systems, a sales training organization that offers tapes, books, videos, conferences and a club that distributes selling techniques from the nation’s top producers.
What’s your opinion? Send your Letter to the Editor to firstname.lastname@example.org.