This is the third of 11 articles I will be sharing about the challenges realtors face. If you haven't read the previous two I hope you'll go back and read them.
So this is about the 2nd topic in my article, The Challenges Realtors Face, how to present price to sellers so they price properties to sell vs sit on the market.
We all know right now, price is critical in which homes are selling vs. those that are sitting. It has become more and more important to price them right from the very beginning in order to get them sold. There's simply way too much competition out there. In fact studies have shown many markets have over a year's supply of inventory available and not nearly enough buyers to support that.
Now I know there are many things that go into properly marketing a home and getting exposure to the buyers. There is print advertising, the internet, open houses, Realtor luncheons, flyers, postcards, calling people, staging it properly, and of course the sign, lockbox, and MLS.
It still boils down to price in the end. The buyers are ultimately looking for the best value. Price, condition, and location are what cause a home to sell. A home could be advertised on the front page of USA Today with beautiful color photos and virtual tours on every website known to man, and if it's not priced according to market value, it isn't selling.
I have found in going on hundreds of listing appointments myself, and coaching and training agents, that taking the emphasis off you and your opinion. and putting it on the market is the best way to discuss price with a seller. Instead of going in and recommending a certain price, take the time to go through the CMA and market stats in detail with the seller. Have the seller help choose the price because the numbers speak for themselves. In many cases once you and the seller look at them together, the sellers can see where they need to be and will likely surprise you with the price they choose.
After all, agents aren’t really the ones to determine the value of a home. Buyers, the market, and the appraiser decide what a home is ultimately worth. Our job is to educate the sellers of price in a way that has them understand and feel comfortable with the price they choose.
I’ve shared scripts and objection handlers in many of my previous articles on specifically how to communicate around price with sellers. There is also an article geared toward working with sellers on price reductions after taking the listing and it not selling. Please visit those articles if you feel they would support you.
When you list the home it’s a good idea to discuss the potential of needing to lower the price if the home isn't sold within the first 30-45 days of being on the market. Generally the interest and activity will slow after it’s no longer a brand new listing. Adjusting the price to a new price breaking point will gain fresh exposure to a different group of buyers than you captured before. Pricing and adjusting the price just under $5,000 to $10,000 price breaking points is a really good idea. Most buyers are shopping online first and since most public sties require a certain price range whenever you are just under the $5,000 to $10,000 price breaking points you keep the home exposed to the buyers who plug in under that price range.
Throughout the listing period, update your sellers on a monthly basis of overall market conditions so they know where they stand on a consistent basis. Update them with a market analysis of their specific location, and the market as a whole in your area. Let them know the longer a home sits on the market, the harder it is to sell. Provide them with the following statistics every 30 days:
• Total number of homes for sale
• Total number of homes sold YTD
• Average list price of the homes that have sold
• Average days on market of the homes that have sold
• Average list to sale price ratio of the homes that have sold
Give them these stats for their area and your entire market. The more information you can provide the better off you and they will be in determining where you need to be on price.
One of the hardest things we have to do as agents is tell the sellers the truth about price. It's much easier to tell them what they want to hear and that our fancy flyers, ads, and open houses are going to get the home sold. What we should actually tell them is that according to studies, less than 5% of homes are sold as a direct result of an ad or an open house. We could actually be honest and tell them it's really a means for us to pick up more leads for ourselves.
I mean let’s admit it guys, our brokers even tell new agents to borrow a listing to advertise from another agent to make their phone ring so they can pick up leads, or to borrow another agents listing to do an open house. The purpose of this is not in hopes that the new agent will actually sell that listing, so why do we tell our sellers advertising or open houses will sell their home? I mean yes, there is slight chance that either will be the single cause of selling but in most cases, homes don't sell as a direct result of either.
Many of the agents I coach are really scared and uncomfortable with presenting and discussing price. On our coaching calls we role play and pretend I’m the seller. I guide them through exactly what to say and how to say it to have them gain confidence. We role play all the biggest fears they have of what the seller might say or ask during their listing prsentation. Together we create answers for those questions so they’re prepared and confident when talking with the seller.
We all know if you want to master anything it takes practice. I recommend that you spend some time practicing presenting your listing presentation, pricing, and talking about price reductions. You can do this with yourself alone or you can do it with a friend, a family member, or another agent in your office if you don’t have a coach to work with.
I hope this is helpful for you on your listing appointments and working with sellers on price.
If I can answer any questions or be of support to you in any way, please comment below or email me at email@example.com
I hope you are on track to Make 2012 YOUR Year!
"Christy Crouch is the co-founder of You're The Difference Sales & Life Coaching, co-author of the highly acclaimed real estate objection handler book, Now What Do I Say? a collection of more than 400 answers to over 70 of the most common questions and objections faced in the real estate industry. She is still an active agent in Virginia, has participated in closing thousands of transactions in her career, was inducted in the RE/MAX Hall of Fame for her production. Christy is in the top 2.3% of her marketplace. Her goal is to share what she's learned with other agents to support them in having a highly successful real estate sales business while having a happy and balanced life. To learn more about her coaching and products please email her at firstname.lastname@example.org or visit her website at www.yourethedifference.com"