ASKING FOR PRICE REDUCTIONS
By: Walter Sanford
Now this isn't really about getting new business. It is not a prospecting script, but it may be the most important phone duty that anyone in your office does -- asking for price reductions.
Asking for price reductions can make or break a top real estate agent's
business. Not only will price reductions quicken the sale, and therefore, minimize overhead in a real estate agent's business, but it will also prove to everyone that your marketing systems work. Remember, price is 90% of any marketing plan and the faster you achieve market value, the faster everybody's needs are met.
The challenge with price reductions is not solved with a phone script, but it's a series of planned events. This article unfortunately cannot deal with every aspect of a price reduction. The steps that are most consistent to the acquisition of a price reduction can be found in our Seller Solution product book! This product shows you the right questions to ask prior to a listing presentation so that you can learn the true motivation and then find ways to meet their goals. When the desire is to meet someone's goals, they're much more likely to listen to the plan that gets them there. As we all know, the correct price is the fastest road to the achievement of most goals that have to do with a sale.
Once the right questions are asked, the next step is an outstanding
presentation with the correct verbiage during the CMA. We've all
experienced the seller that no matter how much information is given them, including pre-listing sales packages that include pricing technologies and the right scientific research showing the exact value of their home – they still want more! What are we to do? Well, the product previously mentioned will explain what to do while battling another agent's high evaluation or how to obtain pre-agreed listing reductions during the term of the listing.
All I can do at this juncture is to assume that the right questions were asked prior to and at the listing presentation, and they received information on how to price their property correctly. At the listing presentation this information was gone over and the scientific information was discussed. If after all of this has been done and the price is still too high your options are to not take the listing or to receive pre-agreed reductions based upon the success of marketing.
If everything that should be done has been done, and you still have an overpriced listing, you (1) knew it was overpriced and took it anyway or (2) made a mistake based upon the fact that you liked the property more than anyone else did. There's also a possible third problem and that is the seller was a better salesperson than you, and sold you on the high price. All this is leading us to one conclusion, if you have been a victim of any of the previously mentioned three problems, you're now going to have to consistently ask for price reductions, and that may be the most embarrassing aspect of this business.
How do you ask for price reductions when you told the seller that you could market the home at the agreed upon price? Sometimes, their responses are furious, such as, Well anybody can sell this house at that price," "The other agent said that they could get more," "I can't buy my new home if I get that price," or "Do you expect me to lose money?" All these questions ignore the main subject, and that is, market value is market value and none of the above questions have anything to do with or affect market value.
The following lead-ins can be used to ask for a price reduction, but it is
very important that you use new subjects as often as possible, so as not to sound monotonous! Remember, an agent that asks for price reductions soon after the listing presentation will have a weary seller, so therefore, mix your price reductions in with new and exciting marketing concepts.
Concepts such as a page on your web site from your lender showing five ways which the home can be financed. Adding a special home of the day button to your site or sending your evaluation surveys to all the agents who have seen the home -- I've got a million of them. Remember, the seller likes the real estate agent who is ingenious in their marketing methods and also, the seller will then listen more intently to the following reasons for a price reduction.
Here are the lead-ins that you can use to ask for a price reduction.
This is in subject form because scripts would be too difficult knowing every situation is different. However, here are the subjects of price reduction scripts that will get you started.
1. There's been a new sale in the neighborhood that affects your value.
2. Here are some of the responses that we've received from other agents.
3. Here are the responses that I received from buyers I have shown.
4. Here are responses that I have heard from buyers shown by other
5. Here are the responses from the agents in my office.
6. Here are the attitudes of the real estate agents who attended the
Broker Open House.
7. Here were the attitudes of the buyers who walked through your
home on the open house.
8. Here are the responses that we have received from the ad that
we’ve placed in . . .
9. Here are some suggestions that I would do if it were my home to make it more appealing to buyers. Oh, by the way, rather than just making these improvements why don't we drop the price to compensate for some improvements the buyer may want to make?
10. Why don't we increase the selling office commission? If I sell it, I will stick to the original terms of the listing agreement.
11. May we add a selling office bonus?
12. May we add points so that financing becomes easier for a buyer?
13. I know that this offer was low and the buyer did not accept our
counter offer, however, may I lower the home to the amount that
we mentioned in the counter offer to attract more interested
14. May we ask for some concessions on the home that you're buying and then supply those same concessions to any potential buyers on their home?
15. May we offer preferential owner financing and make the property more affordable to any potential buyers?
16. We have an open house / new ad / new Internet blast going out and I would certainly love to be able to market this home at a new and
17. I'm going to be taking the property out of the MLS and resubmitting it as a new listing, thereby acquiring a new look and new
enthusiasm among the cooperating real estate agents here in
town. I'd like to do that at a lower price.
18. Is there anything that we could throw in that would sweeten the pot, appliances, vehicles, maybe even a free vacation at a time share?
19. Many times we have found that emotions play a big role in the sale of a home. Therefore, can we make your home more emotional having it professionally staged and decorated by a local design group?
20. Cooperation among real estate agents is paramount to getting the
property sold. Yes, I am the one agent that is handling the marketing, but I am marketing to more than 3,000 real estate agents who handle a large percentage of buyers. My job is to market to them so that they can express their excitement of your home to their buyers.
Let's discuss what we can do to make this home more exciting to the
real estate agents here in town.
21. Real estate agents have many properties to show and sometimes the determining reason for showing is ease of access. Let's do some items to improve the showing procedure that will make it easily
accessible to real estate agents at any time and a moments notice.
22. I would like to obtain a price reduction and do some things that I have never done to market a home, such as advertising them in the Los Angeles Times and the Wall Street Journal. Spending money on an ad that would reach outside our geographical area is risky, but I would be willing to go ahead and give it a try if we had a more marketable price.
23. I was looking at your holding costs and find that if we drop your price and obtain a sale, we may eliminate many months of payments, taxes, insurance and upkeep that I believe would compensate you for this price reduction. Let's discuss how this might work.
24. In all the years that I've done business, one of the hardest things I
have to do is disappoint a client. The continued marketing of this property at the current price that I now find is too high, only tends to disappoint you and therefore, I'd like to ask the following favor.
Would you please consider a price reduction and if that's impossible, would you allow me to discontinue my marketing efforts? It's very difficult for me to express this to a seller that's been fair with me and to a home that I'd like nothing more than to market and sell, however, I truly believe that unless we drop this price, the property will go unsold. I'm willing to give up my marketing effort and my listing to show you how clear I am that we need to adjust our price today.
I hope you can use any one or all of these reasons to obtain a price
reduction or improvement in terms of value. The phone is the most
effective way to do this. The use of your assistant calling for price
reductions or doing it by mail has proven to be ineffective. There are
times when the real estate agent must pick up the phone, and the price reduction is one of them.
Walter Sanford is a top producing real estate agent and speaker who travels the country delivering systems and strategies to top producers for higher productivity and client satisfaction.
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