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Bernice Ross
Pricing your listings properly at the beginning of the listing period is the most important step to getting your properties under contract. While some of the following strategies are not for the weak of heart, try them – they really do work.
Detach the sellers from their property. When most agents conduct a listing appointment, the meeting takes place in the seller’s home. The sellers have the upper hand because you’re on their turf. Meeting them at your office or at a neutral location evens the playing field.
Conduct an executive review. To detach sellers from their property, you must be prepared to conduct a two-step listing appointment, preferably incorporating an “executive review.” The Executive Review process is also effective when you need a price reduction as well.
Here’s how it works. Step 1 is to invite at least three to five agents and your manager/broker to preview the property. Each person gives you their opinion of the list price in writing and why they selected that price.
Step 2 is meeting with the sellers, preferably away from their property, to share the agent/broker feedback as well as your other CMA material. If you use the two-step process, be sure to schedule both the review and the actual listing appointment as closely together as possible.
If they want a one-step appointment you must be prepared to do your listing appointment on the spot.
If you’re using an executive review to obtain a price reduction, have the most effective salesperson or your manager share the results. As the listing agent, say nothing. Once the review team leaves, ask the sellers whether they want to change their price. If it’s clear that they’re still unrealistic, it’s probably the right time to terminate the listing.
Set the seller’s expectation when you sign the listing. Sellers often tell agents that they want to “test the market.” Testing the market is a poor idea; most of the showings occur during the so-called “honeymoon” period, the first 14 to 21 days in which the property is listed. After those first few weeks, showings drop dramatically.
It’s important to tell sellers that if they insist on overpricing their listing during this critical time, they may be sitting on the market for months. A proven strategy is to use the 10 days or 10 showings strategy. When you take the listing, tell the seller that if you have been on the market for 10 days or have had 10 showings with no offers, then they need to drop the price.
In a good market, 10 days is more than adequate to generate an offer if the property is priced right.
Price reductions are easier when you’re in constant contact. If you have missed the mark on the list price, the first step in obtaining a price reduction is to be in regular communication with your sellers about what new properties have come on the market, what has been placed under contract, what has closed and for how much.
By constantly keeping your sellers up-to-date on the current market conditions, it’s much easier to help the seller understand what is happening in the market and to make an informed decision.
Pre-schedule your price reductions. A great way to make obtaining price reductions easier is to preschedule them at the time you take the listing. This is especially true if you’re in a strong seller’s market where properties are selling rapidly.
For example, one top producer doesn’t mince words when the sellers want to overprice their listing. To work with her, the sellers must agree to reduce their price by three percent after every 10 showings or every three weeks, whichever comes first.
With every price reduction, change your marketing. Once you obtain a price reduction, the next challenge is how to get the attention of those brokers and buyers who thought your listing was overpriced. To do this, change the photos, especially the main photo that appears in the first position on brochures and the MLS, as well as any major real estate portal.
When agents and buyers see the same photo, they remember that they have already seen the property and that it was overpriced. Because they don’t click through to the view the listing again, they have no way of knowing that the price was reduced. This strategy increases the odds that your listing with the new price will be viewed again.
Charge a refundable marketing fee. One of the best ways to sort out who is shopping your services against another agent is to charge a $250 marketing fee up front that is reimbursed when the property closes. (While this strategy usually works well in the lower price ranges, it is not as effective for higher priced listings.)
“The marketing fee creates a partnership and the sellers appear more serious because their $250 is on the line,” one agent said. “As dumb as it seems, it changes their mindset tremendously.”
If you want to price your listings right, these strategies have withstood the test of time – why not try one of these strategies on your next listing appointment?
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author. She may be reached at Bernice@RealEstateCoach.com.
