How to get price reductions in a changing market

Tom Ferry shares scripts and tips to ensure you succeed – even in a market slowdown

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Feel that chill in the air?

It’s not just autumn taking hold.

The market, too, is cooling.

Now, I’m not predicting a catastrophic slowdown. But we know real estate is cyclical, and I want to help you stay ahead of the curve. That’s why I’m talking pricing in this Coaching Corner.

I’ll show you how to get sellers to agree to the best price initially, and I’ll also give you the perfect script to get those much-needed price reductions. Start by downloading our List & Win bundle, which is full of scripts and tips to get more listings!

Focus on more than price

You know it. I know it. Competing solely on price is never a good idea.

There’s bound to be an agent who comes in and promises a completely unrealistic price to emotionally hook the homeowner into a listing.

That’s why it’s important to demonstrate how you’re different during a listing presentation.

Like this:

“Mr. and Mrs. Homeseller, I could line up 1,000 agents at 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…”

Once you’ve explained your marketing strategy in depth and gotten the homeowners’ buy-in, then come back to pricing.

I encourage you to use my three-pronged strategy as outlined 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.

Second, 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?”

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Your listing isn’t selling. Now what?

I believe the only way you earn the right to ask for a price reduction is to maintain constant, consistent communication with the seller about current market conditions, including new listings on the market, new price reductions, new sales, etc.

Only if you’re keeping the seller up-to-date can you reasonably request a price reduction. To do so, start by asking for a meeting to review the process. At that meeting, take them through all the numbers and provide a comprehensive update on the market. Then say this:

“So here’s what we have to decide. The agents in the marketplace, the overall market, and most importantly, the buyers have all rejected our price. What would you like to do?”

Then… silence. Wait for them to talk. If you’ve earned their trust, they’re going to ask you for your recommendation.

Then you say, “I’m going to strongly recommend we amend the price to be in alignment with what buyers are willing to pay in this marketplace.” Then present 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 shift hits…

…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.

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