Get Price Reductions and Sell More Houses
Getting clients to reduce their price is not a mystical happening, and is often critical to making the sale. It must be done methodically. Top-selling agents have a set system to get price reductions. They follow their system to the letter no matter the price of the property, economic conditions of the market place, or the client.
There are five steps to set up a good price reduction system. Step one: Price it right when you list the property. Make sure the seller understands the how important the right price is to the sale. Be sure you tell them the truth about how their property’s price compares to others in the area. Be compelling and convincing in your conviction about the price. Setting an artificially high price just to get a listing will not help you to sell the house, and you need to be sure the owner understands that. Make the seller understands that the other agents want the listing and will beat them up on price later. They merely want their sign in the ground. You want a sale and a satisfied client and you are willing to tell them the truth up front to get that.
Step two: If you decide to list the home with a price that is overpriced initially, then get a price reduction signed for a future price and date. Get the commitment that if in 30 days the home hasn’t sold, they are willing to drop the price to a new price. It is important to get them to agree to these terms up-front when you list. This commitment will avoid discussion later. If you can’t get a signature up-front, at least discuss the price reduction issue. You will have at least laid down the foundation for a discussion regarding reducing the price at a later date.
Step three: Get the sellers to agree to meet with you at your office every 45 days to discuss the price of their property and showings. This meeting will give you an opportunity to meet with them in your environment to get the price needed to sell the home. By having the meeting at your office, you have control and will invest less time. Time is your most precious resource. By meeting at your office, the meeting will be shorter and you will save 30 to 90 minutes in round-trip drive time.
Step four: Create a specific price reduction campaign using letters and phone calls. This campaign should start no later than 30 days after the listing is taken. The clients should receive information and guidance about the dangers of over-pricing their home. They need to know the importance of price in the sales process, even if you clearly explained this during the listing appointment. Remember, you are judged by results, and selling the home is the only result that counts. If the price is hindering your success, your client needs to change.
Step five: This is the final step. If the clients have not been cooperative with getting the price down, even after they have met with you and received a few steps of your price reduction campaign, it is time to send them a final letter. The letter should once again state your reasons for reducing the price, and include a price reduction form with your recommended price and a form to cancel the listing. Ask them (nicely) to sign one of the forms and send it back.
Active agents will typically see about 65% that signed the price reduction. About 35% will want to cancel their listing. The 65% will usually sell at the reduced price when they would not have before. The 35% who refuse to reduce the price will likely never sell at their price. If the house never sells, then it has no value to you. Clearly, over-priced listings have no value. Yours will only cost you money and, more importantly time, and emotional energy. Don’t allow clients to dictate the conditions and success of your business by their refusal to look at the facts objectively. Reduce your expired listings by reducing the price. Price will always dictate all the other factors in the sale. Control the price today.
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