Today’s sellers may have done their own research and come up with their own prices, so it’s up to agents to manage expectations and gently deliver reality.
Gary Gold, who famously sold the Playboy Mansion a few years back, has a trick for getting sellers onboard with a realistic price.
“I tell them I’ve come up with a formula where I know exactly what your house is going to sell for,” Gold told a packed room at Inman Luxury Connect Wednesday.
Gold explained that he tells his clients to think of what they believe their home ought to sell for, then he delivers the kicker: “Now take off 15 percent.”
Using this method, Gold explains, means that his clients do the math on their own before he even finds out what price they had in mind. And to drive home the point, he also tells them that he had the same experience when he sold his own home.
“I think that’s a really good way to do it,” Gold added.
The comments were part of a panel discussion on how to give sellers, particularly those in the luxury market, realistic expectations about what kind of experience they’ll have while their home is on the market. Sarita Dua also spoke on the panel and said that some clients are “data freaks,” meaning that they’ve already looked up comps for their home and may think that they know how to price their home.
Unfortunately, however, those types of clients may have a “selective memory” about the market conditions in their neighborhood, Dua explained, or could have chosen to look at “the highest comp ever.” And that means they may not be as prepared to list their home as they think.
Gold has encountered the same thing.
“They look at the most expensive comp to ever sell,” he said as members of the audience nodded along knowingly. “They also compare it to the houses that are for sale.”
Dua argued that agents who find themselves in this kind of situation should make sure they have a deep understanding of the data, which can be used to gently bring clients back down to earth.
“You can listen to what they’re saying and understand where they’re coming from,” she said, “and then use data to diffuse.”
Gold uses a similar approach. He told the crowd Wednesday that relying on “intense information” about the property, the comps, and the market is useful for giving clients realistic expectations. And, he added, agents need to be honest.
“Its a really bad time to tell people what they want to hear,” Gold said. “We’ve got to get into the habit of telling people the truth.”
Being forthright with sellers, especially those who have unrealistic price expectations, can be tough because it means delivering what might be perceived as bad news. But Gold pointed out that if a would-be seller has interacted with a series of people who stroked their ego and simply told them what they want to hear, it they’re probably “ready to hear the truth.”
Gold also recalled talking to clients who expressed regrets about their purchases. In one case, for example, a buyer had recently purchased a home for $9 million but after the fact wondered if he had overpaid. Gold’s approach was to concede that the man may indeed have paid a few hundred thousand too much, but also noted that the neighborhood was hot and the man ultimately wanted the house.
It was an honest approach that acknowledged the man’s concerns, which worked.
“They appreciate that more than trying to sell them,” Gold said.