In these times when negative equity is commonplace, cutting the price of a listing is something none of us want to do. Many real estate markets are characterized by falling prices, an overabundance of properties on the market, and more properties for sale than there are buyers to buy them. A listing can go from extremely marketable to UNSALEABLE in the blink of an eye. Consequently, “So, when do you cut the price to sell the listing?” is a question most top salespeople deal with daily. Below are ten clues as to when to drop the price so you can get that listing SOLD!
The 10 Price Dropping Clues:
- If the house has not been shown in the first 2 weeks of the listing, it could be time to Cut the Price. More people look at a listing in the first 30 days than any other time, so it’s dangerous to keep a new listing on the market for more than two or at the most three weeks before a change is made. Otherwise, in that time the majority of the prospective buyers have seen and rejected the property, so Cut the Price before this happens.
- When salespeople with customers tell you the house is overpriced Read the rest of this entry »
Many REALTORS® out there believe that price is the main aspect of a listing presentation. Because of this, in many instances price is the only presentation made, sometimes only over the phone or via email instead of in person. I believe presenting the price is just one segment of an awesome listing presentation, so I’ve written this blog to help you with all the other components so your clients will see that you’re the best choice!
One of the most important functions of a listing presentation is to establish a trust relationship between the seller and the REALTOR®. This happens when the seller is convinced the salesperson has the skills necessary to get the property SOLD, and the salesperson is convinced they can sell the property to meet the seller’s criteria. It’s the information that is shared and presented by both the seller and the salesperson that creates this trust factor between the parties, so here’s how to make the information you share shine.
Components of an Awesome Presentation
1. The Prelisting Interview. This is usually a telephone interview (which may be the most important aspect of the entire presentation) which generally takes between 30 and 60 minutes. To make certain you provide the information the seller is looking for, it’s important to ask questions related to the following:
- Their timeline for moving
- The price they are looking for (they have one)
- Their reason for selling
- If the house has been listed in the past 24 months
- If they have talked with other agents
- Are they ok with their mortgage
- What concerns them most about moving
2. The Prelisting Visit. This visit is often referred to as a walk-through. It’s a good idea to start by saying Read the rest of this entry »
Earlier this week I had the opportunity to speak at the West Virginia Association of REALTORS® state convention along with two great friends and fellow CRS instructors, Frank Serio and James Nellis. James was telling Frank and me about a new way some of the top REALTORS® are presenting prices—with some remarkable results. This blog, “So, did you say you wanted more Wiggle Room?,” is a result of that fascinating dinner conversation.
Introduction
Pricing property in a buyer’s market is a challenge for most REALTORS® and distressing for most sellers. It seems logical that prices should start as high as possible to allow some room for negotiating, and in a seller’s market this usually works. After all, in a seller’s market, prices are going up, and there are more people who want to buy than sell, so buyers will pay a higher price. However, in a buyer’s market, there are a number of similar properties that could be on the market at a lower price, so overpricing in such a market can be a disaster. Buyers know prices, as do REALTORS®, so if the price is the least bit too high, it turns off many would-be buyers.
The “Wiggle Room” technique as outlined below can be very effective if presented correctly because it’s based on the reality of the marketplace and can help a homeowner choose the right price based on their motivations.
The 3-Price Technique
The Right Price:
REALTOR®: “In analyzing properties comparable to yours that have sold in the past 12 months and reviewing those that are on the market now, we are convinced that the Right Price for this home is at the top end of that range. We feel certain that if the property was on the market today at $195,000, we would see an offer within six weeks that could be full price or certainly within 5 percent of that price. However, if homes similar to yours became available at a lower price, it could keep your home from selling for a longer period of time.”
Seller: “I understand and agree with you that this could be the Right Price, but we would like to have a little Wiggle Room so we could negotiate. Could you put it on the market for $210,000?”
Wiggle Room Pricing:
REALTOR®: “Having a little Wiggle Room seems like a very logical way to price a property, and it’s worked very effectively in the past. However, buyers today are very well-educated about price because of information readily available on the internet. 90% of buyers search these sources before making a decision about what to buy, and if a property is the least bit overpriced, they just don’t want to look at it. Having a little Wiggle Room can be a real obstacle to getting your home sold in a reasonable time for an acceptable price.”
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The Worry Price:REALTOR®: “When we were talking last week, you mentioned not wanting a long, drawn-out sales process and that
you wanted to move within the next four months. As a result of that conversation, we’ve calculated what we call a Worry Price. A Worry Price is a price that is so good that any prospect looking at the property will be worried that someone else will buy it if they don’t snap it up. We are convinced that if you put this property on the market for $188,000, not only would you get a quicker sale and move out time, but you may also get multiple offers—which could lead to an even higher price.”
Selling a home in a buyer’s market can be a very stressful situation. However, stress can be reduced considerably by using logical techniques to help a homeowner understand the wisdom of selecting a price that will encourage a potential buyer to look at the property. Choosing a Wiggle Room price will not only impede the sale but may in fact cause the final sales price to fall below what would have been the Right Price. Also, keep in mind that the Worry Price technique could work very well in counseling a homeowner regarding a potential short sale. The wrong price not only prevents a sale, but without a sale, most short-sale-qualified properties end up as a foreclosure. Hopefully this technique will be another tool to help you and your clients successfully manage this buyer’s market!