When you met with your sellers during the listing appointment, you agreed on a listing price for the home, feeling that it was priced competitively with the neighborhood. However, after a few months on the market, the home isn’t selling and interest from buyers has waned, even while other homes in the area are flying off the market. Although in a perfect world, their home would have sold for the price listed, or even more, in record time, in reality it’s priced too high for the market and an adjustment is in store. While this conversation is cringe-inducing for many real estate agents, it also provides you with a great opportunity to showcase your professional skills. If done correctly, you will not only secure the price adjustment, you’ll also gain ardent supporters of your business as well.
1. Stay in touch with your clients. Weekly contact with your clients, even if there’s nothing new to report, goes a long way. With each call, you’re building trust and exhibiting your professionalism. If you’ve called them every week to give them an update on their home, they’ll be more likely to understand that, in order to sell, the price needs to be reduced. Will they be upset? Initially, they may not like what you have to tell them, but in the end they will understand that you have their best interests at heart.
2. Meet with your sellers in-person. No one wants to hear this kind of news over text or email, especially if they’re emotionally invested in the home. Schedule a time to meet with them in-person, and explain why you think the price should be reduced. Not only will you be able to gauge their reaction, and mitigate any fallout, but they’ll also appreciate that you took the time to discuss the matter face-to-face rather than over text, email or the phone.
3. Explain why the change is necessary. Your clients will want to know why you’re suggesting a price reduction. Try not to be defensive. Instead, calmly explain the state of the local housing market, and reassure them that price reductions are sometimes necessary in order to compete. In fact, according to the National Association of REALTORS®, more than half of sellers who had their homes on the market for 5 weeks or longer reduced their asking price at least once.*
4. Rethink your lingo. In addition to maintaining a positive attitude, it’s also important to adopt terminology that will convey your message without the anxiety. For example, instead of calling it a price reduction, call it a price adjustment. The former implies that you’re reducing the value of the home, which can make the seller feel anxious or angry. A price adjustment is a more neutral term that doesn’t prompt an emotional response.
5. Remember your LIMS. Your clients are sure to have questions during your meeting with them. Answer them, and pay attention to what they’re saying (or what they’re really asking). Regardless of your clients’ reactions be sure to use the L.I.M.S. formula (Listen, Isolate, Mirror, Solve & close) to help you respond to objections you may hear.
*Source: National Association of REALTORS® 2013 Profile of Home Buyers and Sellers
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