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"I Hate to Be the Bearer of Bad News, But...." - Delivering the Truth to Our Seller Clients

Over the course of my career, I have been the bearer of tough news for my listing clients many times. I don't ever relish the thought of sharing bad news with anyone, but I must admit that my skills in this area have improved dramatically with experience.

I have a few tips to share that might help you if you are faced with delivering undesirable news to your own clients.

1. Just say it. Sometimes, it's best to just spit it out, then deal with the explanation. If you're at a listing appointment, and you know that the home is worth substantially less than they were hoping for, you don't have anything to gain by beating around the bush. Get it out on the table. In fact, it might just save you some time if they are unwilling to listen to the facts, because you can make a quicker exit.

2. You might consider prefacing your statement with, "I fully realize that this is not what you were hoping to hear", or something similar. It may or may not soften the blow very much, but at least you tried, right?

3. If they question your valuation of their home, tell them that you are forced to look at things as an appraiser would. I have said things like this, "I think your home shows really well, and you have a ton of nice upgrades. I think we could actually find a buyer that will pay the price you want, but I really don't think it will appraise, then you have a new set of issues to deal with."

4. Another good quote (feel free to steal it from me): "You might get an agent to agree to list the home for that price, but it won't change the market value. Don't ever choose an agent based exclusively on the price."

I hope that this is helpful for you. I am known with my past clients as being direct and honest, without being blunt. There is a fine art to communicating effectively. Hopefully, these tips will give you a leg up on your competition.

Thanks for reading!

Image courtesy of B℮n on Flickr.com.

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If you're looking for a home in the Austin area, you can visit my primary Austin real estate website at www.austintexashomes.com. Thanks!

Posted by Jason Crouch, Broker - Austin Texas Real Estate (512-796-7653) on 10/05/2009 05:29 PM

Comments (229)

Bad News Delivery in the ActiveRain Channel

Originally posted at: Cool Austin Texas Real Estate Blog : "I Hate to Be the Bearer of Bad News, But...." - Delivering the Truth to Our Seller Clients

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229 Comments on "I Hate to Be the Bearer of Bad News, But...." - Delivering the Truth to Our Seller Clients

OCT

Jason,

Hitting home runs here.

I find that #1 clears the air. Just get it said! Sometimes a preamble to the truth distracts from the truth. And I REALLY like #4.

Jason, Number 2 might help, just a little. It's so difficult to tell someone any bad news.

Excellent post...in the end, no matter how unwelcome, people respond best to "truth".

Great post. Nothing but the truth. #1 and #4 are the best.

Love #3. We are seeing a lot of contracts fall about because the properties are not appraising!

Jason, you have given some excellent ways to couch the bad news. Frankly, we always need to tell the dark truth in order to save everyone the grief of unrealistic expectations. You have given some excellent tips on how to do this gently! I just had to do this myself last week and frankly did not handle it as well as your suggestions! Great work!

Well put, Jason. Sometimes we are afraid to tell the truth for fear of losing the deal. But when it doesn't sell at the higher price we are the bad guys and could lose it anyway.

These days in many parts of the country, it all comes down to what the appraiser is going to put down.

Jason.

All good advice. The sad thing is, it's needed advice!

"1. Just say it. Sometimes, it's best to just spit it out," Not "Sometimes" Always!

Bill

Bad news does not get better with age. We just need to say it - as compassionately as possible - but get it taken care of. Your clients will respect you for it in the end.

Hi Jason Good advice.. I have a favorite I use also...for a seller that wants more than what the property sells for.

I tell them " I dont like telling you this but I rather have you hate me now ...than hate me later."...... then that leads me into the appraisal issue and the lost of a propective buyer that could be lost because the house was priced out of their price range and they decided to buy the lower price home around the corner that offered the same ammenities as your higher price home.

The truth is what most want to hear. I told a seller today taht the price in today's market was less than he wnated and also thsiis the wrong time of year to sell a Lake home. Hethanked me for being honest and said to call him end of march.

I'm #1 - Like a Band-Aid. Then I try and jump into "This is what we can do" to fix it - which is most often the case. The majority of the time we can sympathize and be a friend, except when it is our fault. Those are TOUGH!! But I feel it is right to admit them to and come clean ASAP. No one is perfect.

Great points Jason. I run into these types of things all of the time. I feel like its always me against the opinions of their friends, moms, and other non-pros. In the end though, they usually see the light... Hopefully.

Jason - great post. Seems like I'm having to give bad news more and more often lately. I try to break the news to them gently, and follow it up with hard statistics that show how I came up with my values. It's amazing how much more understanding sellers are these days compared to 2005. I think most people are expecting the bad news. I've actually had a couple of sellers recently thank me for giving them the truth. Their previous agents didn't, and they said they would rather have been told the truth then and dealt with it, rather than linger on the market for another 6 mos or 1 year. We may not like it, but it's our job.

Jason: Ceil deals with this often in her business. She hates to go back and tell them they didn't get the job. She jumps right in and usually has another plan of attack. There is always another house or another job and what may be down the road may be even better, bigger or greater.

Hi Jason - Along with just getting it out there, we should always have a couple of options available to help clients respond to the bad news. It is times like these where sellers really appreciate an agent who tells them what they need to hear, and even better, how to work around it.

Jason....

The number of agents that try to "buy" a listing in our area has diminished somewhat. Who wants a listing that will cost money and will NOT sell?

Jason,, this is a great post and terrific advice. More agents should be this honest and more sellers need to be realistic.

Honesty is the best policy and can save everyone grief down the road.

Excellent post Jason. Honesty is always the best policy and yes, I'll steal #4 from you.

Four excellent points Jason. I once heard an investor say that when it comes time to take a bath, the best approach is to jump right in. I try to be a little more tactful when conveying this to clients, but the point is valid.

I'm going to go further out on a limb here (further than you already did =P) and say that REALTORS really need to learn some basic psychology, the basics of personal space, and how to read body language. We have to be able to QUICKLY determine the personality type of our customers, so we can properly communicate with them. Everyone is different and has a different way of communicating.

OCT

Ruthless Compassion Jason. In our industry, you have to be strong enough to have it. It is hard, but kind to let clients know exactly where they stand.

Jason -

Thanks for sharing this. There's no point in blowing sunshine up our seller's ..... well, you know. The realities of the market don't lend themselves to Broadway show tunes.

I personally have had a house on the market for 17 months, in another state (we relocated). To say I am blunt with my sellers would be an understatement.

It is what it is.

We are doing a disservice to our sellers when we don't share the truth with them.

As always you give clear and good advice. Just biting the bullet and being honest works the best for me, I might lose a listing here and there but often they come back!

Jason - this is still a taugh situation for me...but as you said with experience it gets better...if the Seller is unrealistic about the price, I explaing the market situation and then I ask - do you want to just list it or SELL IT?

With smiles,

Bo in Yukon

Jason, I used to be dismayed for not getting a listing because I was "pricing it too low". Not anymore, I got over it when I watched these properties linger sometimes for years before they sold for even less.

Jason, Good points all around. There are lots of lovely homes that should have a higher market value but then the appraiser comes in. I let my sellers know that the buyers agent will be looking at comparables too, and it is market value Right Now.

Morning Jason, "You might get an agent to ..." Really does say it all doesn't it ? I try to follow bad news with positive options.

You're exactly right.. I find sellers respect our honesty, especialy if they have already worked w/one that wasn't..

Great points. One and two I've used and possibly even three and they are very good examples. I've gotten my point across about #4 but never quite said it that way..."you won't change the market value" - I like that one! I've also said something on the lines of this to overpriced sellers - Honestly, I'd rather let you down now and not take the listing than letting you down six months from now when your house expires due to pricing. If anything is to be gained by telling the truth -- is respect.

Thank you for backing me up on what I just had to do last week. I had a listing and because of an unrealistic heir I let them out of their contract. Good Pointers!

Here is my two cents from a Seller's perspective- I hired a Realtor once and he was good, except that I wish he would have just told me the real deal straight up. I know the news wasn't good, but it helps so much to get realistic information. When you try to sugar coat it, you could set the client up for false expectations and ultimately disappointment. I hired the agent to be the expert and I expect to be given the truth, regardless of the how much it hurts my back pocket. So great advice Jason- just deliver what you are hired to do and the Sellers will appreciate your expertise.

Hello Active Rainers, I recently became a Business Builder in order to get involved assisting all of you with training and tools. Until we're up and running, I want to let you know about a tool that will tell your sellers the Truth.

The DVD "Pricing Your Home to Sell" is guaranteed to get you a price reduction on ANY listing. In 19 minutes they'll hear answers to all the objections you're hearing. Loan it to them with microwave popcorn, then pick it up at your meeting.

You can preview the video at:https://www.davidknox.com/shop/detail/?product_id=10

You an download a FREE video telling your sellers to watch it at: https://www.davidknox.com/pricing_video_promotion/

Forgive me the commercial but this is the CURE for pricing problems and your sellers MUST watch this.

David

P.S.-For those of you who don't know me, here's an Active Rain blog: http://activerain.com/blogsview/957908/david-knox-totally-rocks-

To be totally upfront in this market is the ONLY way to get the job done. I usually always start the conversation with " I don't make the market, I just live and breathe in it" smile, assure them I will try and showcase their home in it's best possible light, ask for top dollar, and PRAY that the appraisal hits the mark. If they won't list for the realistic price, I always go back to their motivation, try again, some list, some don't. Just be real.

Truth is always the best policy. Approach it in a favorable light. If you are still in a declining market let them know if they price their home to sell now, they will be gaining over what they might have to sell it for 6 to 12 months from now by not pricing it right. Another suggestion, give them names of 2 or three appraisal companies. Tell them you will split the cost of the appraisal (at closing) if they will obtain a pre-list appraisal and price the home to sell...taking into account that the market is declining and that an offer will come more quickly if they will price slightly less than appraisal (because appraisals are based on a history of sales up to 6 months previous and chances are the market price has declined another 5% since then). The positive side to this approach is three fold: 1) They have a recent appraisal to refer to if the appraisal used by the lender of the purchaser falls short. 2) You are not the "bad" guy bringing the news and 3) They have reason to stick with you till it sells...they want to get part of their appraisal cost back. It is a win-win for all.

Jason - I love that quote - it really won't change the market value, I'll have to remember that one. Hopefully it will help more sellers be realistic with their pricing.

I think that the more you tell it like it is, the more credibility you have with your clients. I tell my clients strongly..."absolutely not....the times are so different than they were 2 years ago and the guidelines have all changed and this is why it affects you." I'll tell you, I get more respect than pushback.

Jason,

Great Advice! I've used some of these and will borrow some of your suggestions. I definitely believe in telling it like it is. It saves time, money and frustration!

Kim Thomas,

REalty Executives, Voorhees, NJ

JASON

I really liked this post. Appraisal is a sticky wicket these days. Unless it is a cash buyer, now more than ever you must be very careful.

HI Jason - To quote an old TV show: "The truth is out there." It makes no difference whether the seller can see that truth - it's still the truth. I have had many an unpleasant conversation with sellers at the listing appointment, but when they go with my pricing they save time and get their price.

If they insist on a higher list, I don't really want the listing. It will languish on the market, waste my time and money, and other agents likely won't even show it. Part of setting the initial price is doing the research before the listing appointment and providing all of that data to the seller so they can see the evidence.

I will use your number 4!! I have found twice in the last year that when someone wanted to overprice their property (not just wiggle room...but way overprice)...they were in financial trouble (behind in payments) and were not honest with me. Those are not the kind of clients I want. I COULD have possible helped them...if they had been honest upfront. The CMA tells it like it is. :)

Much of the inventory on the market is our fault (as agents) because we are afraid to speak the truth. The good agents are the ones that aren't afraid to deliver bad news because it's honest information.

I have seen other agents buy Listings (and I loose them) then sell the house for less than I could have given the right price right a way.

You are right on the money. Avoiding the topic isn't good for anyone and we are better off by getting it out of the way right at the very beginning. I love your last point! Thanks for sharing.

Great points Jason. When I first started started in this business (not that long ago ) I would take a listing, any listing, at any price - more times than not set by the sellers - just to watch them expire - all the while costing me enormous sums of cash in advertising and promotion, with no return.. They would then be listed by a more "experienced" realtor. The pricing would be more realistic and the home would, of course, sell. I did learn in order to better serve my clients that "honesty is the best policy" and it would be more adventatious for me to walk away from a listing that I knew would probably not sell. I am finding the clients are much more receptive - though not always right away - to the honest approach to pricing. After all we do have to remember and assure them of the reasons they are listing and selling - the key word being selling. I am finding lately a good number of sellers are eventually coming around and choosing me because of my honest approach. Again great points Jason.

Jason - Great advice. Its much easier just to tell them the issue. Unfortunately, you are just the messenger. Its not your fault that a house is not at the value they would like to sell it for. Easier to deal with the issue now than to address it later in a conversation.

Thanks for the post - I've gone on several listing appointments where sellers wanted to list much higher than my recommendations. Along with pricing the importance of preparing the home for sale is difficult for some sellers.

Thanks again for your post. Truth is always the best way.

Thanks for the reminders. We owe it to customers to tell them the truth, starting at our first meeting and continuing on, no matter whether it's pleasant or not. Really, that's what they want from us. "Do you want to list your property, or sell it" often helps them get it.

Jason -

this isn't bad news to deliver. it is reality. and anyone who can't handle reality hasn't been looking at our economy, the massive debt that our government has incurred to "stimulate" the economy, when all we needed to do was to let free enterprise rule, needs a "reality check" (to pardon the pun).

Very good information, Jason. I like the one where you talk about prefacing your statement. Also the one of looking at the house like an appraiser would is an excellent way to approach the seller.

Jason,

Love #4..... I'll use it! Wisely!!!

Kathy Opatka

You give the most sound advice, Jason! I used to agonize over this issue, but realized very early on that I can do absolutely nothing to change present market values. Thankfully, I have never had to walk away from a listing appointment with regrets - especially when I lay it all out on the table at first meeting. You are totally right. Just tell them the truth and no matter what, you'll be satisfied with your presentation no matter what the outcome.

Jason, you hit the nail right on the head with these tips in delivering the not so good news to sellers.

While many sellers may not want to hear it, the truth is always the best in the long run.

Jason, I think you may have coined a new catch phrase for me. Just say it!

Buyer and seller may agree on price but until it is blessed with appraisal #3 - ain't no lender gonna loan no money.

Great post! I always say, "My job is to report what the market is doing, I don't create it". That usually puts things into perspective.

Yes they need to hear the truth, but still so many do not want to listen. They feel like they are giving their home away. I also bring in more reasoning and mention the fact that they ( in most cases) bought it at a very low price, so their "profit" is actually quite high when they consider they have had the enjoyment of that home for so many years. And their investment had appreciated, not depreciated like al of their other possessions like a car.

Jason,

I already commented on this post earlier today but just had to share: at our sales meeting this afternoon we spoke about THIS. VERY. THING.

Just another reason why I love AR! All of this great info constantly flowing in currents and washing over us.....

I can't imagine not being a member!

Great post ~ to the point! love "it really won't change the market value" so very true! and I AM going to steal it!. Thanks again

Excellent post!

I said these things to a buyer but he listed his $200,000 house at $267,000 with another agent. Now, only 40 days later they just had their fourth price change to $179,000...

Jason, I agree with you get it out on the table and back it up with a CMA. What good is an over priced listing anyway?

#3 was great... I wished I would've read this post a couple days ago! =)

Thanks for the great post. #4 will be used on my next listing appointment. I also need to work on my delivery - sometimes my "bluntness" gets in the way!!

We have to do it with Buyers too. The first meeting we don't mind spending a little time to get to know what they want.

When it turns into an EXPEDITION and they don't have all of their ducks in a row and they keep telling you that it's a sure thing! IT NEVER IS!

Just had a client do that to us and of course their plans and price range changed dramatically once they got their ducks in a row. Divorce final and now they know what they really got.

This time I made them speak to MY LENDER and didn't accept their lenders word. My Lender said, Don't take them again, they are not ready. I do a lot of business with her, so I told the client we would have to wait until this and that was done.

Of course she unsuscribed from all of our updates and dropped us. I left a nice message to say if your plans change and we can be of service give us a call.

It hurts to get dropped, but it hurts worse when you are not honest with a client and you are the one who winds up spinning your wheels for nothing. Joy

Jason,

I struggle with this all the time...not because I desperately want the listing, but usually because my listings are with my sphere and I feel like I'm letting them down. I know I'm not letting them down by allowing them to overprice a listing, but as a newbie, I haven't gotten quite strong enough in telling them that if they price it at X, I can't take the listing because it won't sell at the price. They are all always afraid of leaving money on the table. I explain the whole appraisal issue, but most of the time it falls on deaf ears. I know I need more training on how to handle this.

I appreciate your post - it sounds so simple, and I say these things, but I must be beating around the bush, if I'm being perfectly honest with myself...

This is a great post, and yes I will use your wording! Thanks Jason...

Jason - I wish I would have read your post 2 days ago. Number 4 would have been very helpful to me. I just went on listing appointment which was an expired listing and the number they were hoping for is too much. They told me they realized it was too high and that was why it did not sell but only wanted to come down to $413,00 from $425,000 when market value is $360,000 at most. Thanks for the tip.

Like most things in life. Telling the truth is the best defense.

OCT

Great tips Jason. I hope that they will not kill the messenger...ME

I always tells sellers not to choose an agent based on the price they say they can sell the property for. So far that doesn't work very well- they seem to believe what they want to believe and let agents "buy" the listing anyway!

Hi Jason! This post should have been featured! You are spot-on here! And, I love the comment that the seller may be able to list at their price but, you can't change the market value--I think I'm going to use that one!!

Have a wonderful Wednesday...

We are dealing with this often these days, and no, it never gets any easier. It is our responsibility to tell our clients the truth right up front. Appraisals are getting strictier and stricter by the day - so many people are surprised when I bring up this issue. I tell them that if they can't expect complete honesty from me from the start, how could they expect it later. Setting them up for a disappointment would be the beginning of a very unhappy relationship - and I would wouldn't want to jeopardize their chances of selling for top dollar.

Jason,

Delivering bad news is never pleasant but you are right on with this post. Debe is right about "you can't change the market value". I really like that one too!

Jason: It all boils down to the numbers and the comps don't lie. The home is what it is based on what other homes have sold for ~ and that number can change as soon as another couple of houses sell or as the comps you used become to old.

We tell people that the price of their house could change even while it is on the market.

It is hard to tell someone that their prized possession, that they think is much better than every other house on their street is not worth what they think it is. It's a hard job, but we have to do it.

Jason - How so very timely this post is. Just last night I had to tell a prospect that was referred to me for a refi that she was upside down on her mortgages. I too hate telling people who come to me bad news. This woman was so convinced that she had tons of equity in her home the she had gone had estimates issued on putting a pool in.

Before calling her, I had run a property profile on her home, done the comps and ran it by one of my appraisers for a values check. Needless to say, she was not happy about the news and became very nasty and insulted both me and my appraiser.

Even after I explained to her how a lender and an underwriter would view her app and explained to her that she could still qualify for a DU Refi Plus (she was only under by about 10%), she just went off on me.

At this point, I explained to her that if she shopped around a bit, she could probably find another LO who would tell her something different but that unfortunately, she would probably end up spending a lot of time, energy and money to just eventually have some other appraiser and underwriter tell her the same thing I'm telling her now.

All we can do is be as honest and professional as we can and just try and help the ones we can and let go of the ones we can't help.

Oh, too many of these conversations these days! Great points!

as a mortgage lender i have had to tell some applicants that i feel are a good risk that they do not qualify by todays guidelines. i agree with you don't beat around the bush, just get it out in a professional way of course. it's our job to be honest.

Crouch - Some sage advice here. Heck, I probably should do a similar post from my end of the business. Delivering bad news is the tough reality that we are so often faced with.

Jason... I will just be repeating so many... but #1, just get it out there... get it over with... done with. Example.... I know many loan officers that just drag out the bad answers until the end, in most cases, because they want to prolong the angry replies.. the screaming... and that they will be bugged daily until it's fixed and or completely dead of an issue. So sad,yet so true, even though it's my opinion. Good blog... wish more would do this.

jeff belonger

As always, honesty is the best policy!

Those are all good things to say and its best to best to just tell it like it is.

Jason, Great post. I am always aware of the REALTOR code that I think is the most often violated; "A REALTOR shall not, in order to secure a listing, overstate the value of a property." That keeps me on track when I'm tempted to sugarcoat the "bad news" that the home is worth less than they want. I am also trying hard to remember to go ahead and give the potential bad news when we put a listing under contract, "Please don't book a cruise yet. It is not "sold" until it is recorded and the money dispursed." I've seen more deals fall apart this year than ever before and I hate to see my clients suffer more than they have to because they didn't think it could happen.

Great topic and input. You and the seller are working together. Your quote at the end of the your post was right on. I iwll be using that. I discuss the trsut element and what it is my job is. The sooner the better for news. You are building trust and loyalty.

Stefan Jezycki, Napa Valley Ca

Jason,

Powerful statements and all true. I think that most people respect agents who can communicate that type of information effectively.

Rich

Awesome topic! This is exactly what a listing agent went through yesterday on a property that didn't appraise - as I thought it wouldn't when we were negotiating the price. I told him to take the pain now or later....he obviously chose later - and his sellers were not happy!

Awesome post as usual. I have faced this dilemna at listing appointments also, but I like the way you worded these quotes!

Jason,

When in doubt, just say it. Of course, there are ways to say whatever you have to say so it doesn't sound mean or uncaring, and your "phrasiology" is perfect.

We just had a prospective seller call us yesterday to list her house. She wants to do a short sale. Her NOD was filed 90 days ago. Essentially we've got 30 days to get a contract, get assigned a negotiator, and stall a foreclosure. That just doesn't happen in Nevada.

We had to tell her the truth, we recommended a deed in lieu, told her sadly she'd waited too long to call for help, and we were sorry. She appreciated the honesty.

Jason, great post. I agree, it is better to get to the truth as quick as possible. No Broker should take a listing based on a price that will not appraise, or even get a showing. We have no time to waste. Thank you!

good post... its hard to be truthful when others will lie to get what they want but in the end you are the better agent.... and are not waisting time... Well done...

It's not what you say, but how you say it.

Jason - very true. I was listening to Broker Bryant a few month back and he was saying: "I'm not here to tell you what your house is worth, I'm here to tell you what you may get for your house" This sentence still sticks with me and I used it a few times, too.

There are a lot of agents out there willing to "buy" a listing. I agree with you that this doesn't do anybody an good. Honesty is always the best policy. I have had clients come back to me after initially going with the agent buying the listing and agree that they had been mislead.

Good words, Jason.

I say similiar things too. Honestly it is the motivation of the sellers in many cases. If they are ready to move, or have to move, they are more agreeable to pricing right.

If they don't really have to do sell....harder to do. Just my opinion but I don't have the desire to market over priced listings and don't.

So true...deliver the news straight up!!

I have walked away from many listings when the Home Owners insist that "the other Agent said I could get much more". I don't believe in carrying inventory that will not sell; most of the time, the Home Owners end up calling me to come back and take the listing; so TRUTH end up winning the day.

Great advise and telling the truth prvents hurtles down the road...well written.

All so very true Jason -- be upfront with the truth, facts and reality of the current market. So many sellers and even some agents still seem to be shell shocked at prices.

With sooo much inventory it helps to not only provide potential Lister's with comps but also the history of time on market and price reductions. Plus it is so true that appraisals today can be devastating and not necessarily the true story or reality, but, kill a deal.

Sue of Robin and Sue

Good post Jason - and so true. We hate to walk out without a listing agreement in place, but sometimes that it the end result. Sellers are know-it-alls. I often say this:

"You can list your home FOR SALE or list it TO SALE!" - It really makes them think about pricing.

Deryck Wilson

Jason:

Bad news does NOT get better with time.

If all else fails, just blame me...

The truth hurts. I've gotten better at delivering bad news but I hate to do it. It is easier to tell the truth up front than spend months looking for explanations for why the house hasn't sold.

Kathy

Hi Jason -- Very sage advice. One minor problem is when sellers do choose the listing agent based on the highest price, when I know there are NO comps to support it and on rare occasion a buyer bites and it appraises -- go figure.

Having sold real estate here in San Antonio for 5 years now.... I am well versed in the overpriced listing appointment. Used to take them, and this caused me to be their first agent, not their last one.....

I'm more sensitive now to that and will happily walk away if it's out of the realm of possibility.

If they have a problem with where you tell them it should be in price, the can always opt for an informal appraisal for a couple hundred dollars!

Great post and advice, honesty is always the best policy.

Hey man I think YOU may have now set the record of from post to feature time lapse! Let's get together for lunch next week!

Honesty is indeed the best policy. But, honesty without tact and kindness would suck.

Russell - Yours was 27 days, dude! I just looked it up. :) Lunch next week sounds awesome. Call or email me.

Jason, very well put, thank you. I have had this discussion with a few sellers recently and always bring up the appraisal issue. That seems to make a lot of sense to them!

Price...it just has to be constantly mentioned...in these days when such a small percentage of all the houses on the market are actually selling.

Very good points that I will make sure to apply to my business as well.

Hey, "the truth will set you free" as the saying goes....ha.

I would rather deliver truthful news, good bad or indifferent.

Patricia

Good advice and suggestions.

Those are all great ways to break news to clients. It is hard to break bad news to clients

Jason - I too hate to be the bearer of bad news, but I've never been one to beat around the bush. Sometimes we have to be blunt.

Well said! Especially like #3. Clients need to trust your judgement, and (as I learned the hard way) if they don't then your more than likely going to have trouble down the line/1

Jason...

As I read this post it looked familiar ... oh wait, I've already commented on it!

Hey Jason, honesty is always best, but as you stated, so is getting it out there fast and deal with the fall out!

Starting with the truth is so much easier than having to deal with it down the road.

"...and you shall know the truth and the truth shall set you free!" And my listing contract and me :-)

Wish I'd had line #3 on Monday - that said, I'm not sure it would have helped :)

Jason -

As always, you have offered just the right words/phrases to tuck in the memory bank - although I may need to pull them out soon.

Michael

OCT

I'm all for number one. A homeowner should understand the basics of selling and buying a home. Even if it's the first time they're selling. They've been in the market before when they purchased their home so they have an idea of how it works. I have found that most people appreciate just being told the truth.

Great post - your suggestions for what to say should help a lot of new agents get through this very stressful part of their jobs.

Giving people news they don't want to hear is always difficult, but in your job, oh so necessary!

Love the 'won't change the market value' line. ;-) I remain amazed at many stories I hear about sellers not realizing the value of their homes 'ain't what it used to be.'

It's like getting into a pool with cold water. Jumping in hurts for a second, but drawing it out is torture.

I like your line #3. Clever, and it also makes you sound more knowledgeable in making your point. Good post.

Jason, the other thing to remember is to always give bad news in person.

So true Jason, it does get easier with time, and it can save you the hassle of dealing with an unrealistic seller

So well said Jason! Just because a seller doesn't want to hear it doesn't make it untrue! Honesty will ALWAYS be my policy and if that makes me "the second woman in" to get the job done...so be it!

Not telling sellers the truth about the value of their home and the nature of our current market, is not doing your job. I have been guilty of being a little too compassionate and holding back on the cold hard truth. It did nothing for my clients, but lengthen their time on market until the price is lowered to a marketable number. This cost them time, money and a lot of frustration. Lesson learned.

The tips you give for sharing breaking the news gently are great. Thanks for the post.

I love numbers one and four for their truthfulness ... BUT ... unfortunately, number three is the sad FACT of the matter. No matter what you say (or don't say) the appraisal will make or break your deal.

Great post, Jason. You have to be honest with your sellers up front. Why take a listing knowing that its overpriced and you are just going to have to ask for a price reduction in a couple months anyway? I think the fiduciary duty to our clients is to be honest with them upfront, no matter how much they may not want to hear it. They will appreciate it us for it in the longrun.

I just tell them never pay someone to lie to you unless sex is included. (wink) Now here's the deal. :)

Great post Jason. :)

Honesty is always the best policy. Nobody wants to hear bad news but I know the clients I've had to work with in this way are always much more appreciative.

I especially like the way you worded point number 4. Good article and I agree completely.

Good post. Its true, its not what you say but how you say it!

Some times the truth hurts, but it hurts a lot less than BS. good post.

Those are great words to live by when working with sellers, and the truth is good with buyers too! I have always believed in being direct and to the point.

Jason, as always, you're right on the money. Being honest and up front from the beginning is key!

Thanks Jason, you're generous to share this as it is one of the things I hear agents worry about most, especially in the current environment where appraisals are so tight. Steve, #13, addresses an important point as really if you can get the client to understand that you are alligned with their best interest you're in a much better positon to deliver realistic news and have them open to hearing it. How to have them understand that you care about their wellbeing, that it's business but you are a professional committed to their ultimate success, is the challenge. Like if you have a lawyer, you want to know that he really believes in your case and will put his whole heart into it. It's the same with real estate agents. If we KNOW we are doing everything possible in their interest it is easier to communicate and get heard.

Jason,

Good post have to be honest tell the truth it might not be what they want to hear sometime.

Jason:

Great blog. Well written and concise! I especially like points #1 and #4. Great job!

Absolutely! I never want those clients to go down the road with comments like "she just told me what I wanted to hear". We would never get referrals from that kind of relationship...but there are agents out there that will say whatever it takes to grab the listing!

These are good tips, and especially with regards to value, things that sellers just don't want to hear.

You bet Jason. The old adage of time is money really applies. Honesty will get you the art of the possible.

Jason, I believe the sellers want the truth, but some can not handle the truth. Good post and excellent points.

And the truth shall set you free------- the sellers really need to know truth so they aren't wasting their time, endless showings with no offers, an offer with failed appraisal, hoping - waiting.

I always perfer to be the 2nd Listing Agent... especially if the agent that listed the property and did NOT tell them the truth in the beginning and over-priced the listing. Once their listing contract has passed and very little activity on the home... the seller is always ready to listen to reason (and wishing the first agent had been honest with them from the get-go).

There is no need to talk negatively about the first listing agent either.... just focus on the property and state the facts.

I always for cutting to the chase. Your time is money and no matter how tough things are out there why waste your precious time beating a dead horse. My favorate saying, and you can steel this from me, is NEXT!!

Jason - Your post is timely. I just spent most of yesterday getting "beat up" by clients for telling the truth. Don't kill the messenger! I wrote a post in the wee hours of the morning to rant about it. Sometimes you just get tired of absorbing the reaction to the bad news you have to deliver.

Great post Jason,

It's so good I "re-blogged" it and I don't even know for sure what that means!!

Thanks

Truth, it hurts some times. Both seller and buyer clients know they get the truth from me. Sometimes i'm a little blunt. They know that i'm here to represent them. I liked #1 and #4, have used them several times.

Very true. Here is another good way to phrase it. "It's not about what your home is worth, its about what it will take to sell it in today's market."

great article! Dialogues and skill of communication makes all the difference here. If they really need to sell, and I am the one that shows them the facts, I will get the listing...period...

The other dialogue that works well is "Do I have your permission to be honest with you about the price range of your home, and also to tell you what you need to hear, not necessarily what you want t hear?" This usually brings a chuckle, and makes my job a lot easier

#4 is great. I have seen agents take a listing at a higher price and soon after there is one price reduction, then another, then ... Until the listing expires. It's better to price it right the first time and although it may be hard for some home owners to hear, it really is best to get it on the table right away.

Instead of "Location, location,location". It's now "Appraisal, Appraisal, Appraisal". Even with the cash buyer, it will in most cases, close at or below market value in the sellerks mind.

Jason, I think everyone appreciates honesty and that's what sets apart the good real estate agents from the rest. If we are not up front with people, whether or not they like it, it will hurt both the agent and the listing in the long run. Best to clear the air in the beginning!

Lay it on the line, I agree. Everyone will be happier, starting with ourselves.

Jason ~ Points well taken and I am going to steal you lines & incorporate them into my listing presentation. Thanks for sharing these great tips!

I love Realtors that are honest. It helps us stagers with our jobs, too! Sometimes I have to be the bad guy about recommending repairs, painting, etc in order to prepare the house properly. When you have a great team working for your client that is honest and forward about EVERYTHING the property needs in order to sell, you have a happy outcome! Aloha, Lachelle

Thanks for your post. I have to deliver the "bad news" today and dread it. I will use the "look at it like an appraiser" line. Thanks!

Being up front and honest is the only way to do it. My last two sales met with appraisal issues and the sellers didn't even blink an eye and accepted the Appraisal as the sale price. The last house I listed was based on The appraised value. Great Sellers! They used their brains instead of their emotions. I simply ask them if they would rather get blindsided at the point of selling the property or know their asking price was fair prior to any offers. I say this all the time to sellers. "Put your house on the market with confidence." I also encourage sellers to get the home inspected prior to receiving any offers. I simply tell them "I would never put my house on the market not knowing exactly what I was selling. I don't need a buyer telling me what condition my house is in. Doesn't that seem a little backwards? Knowing your sale price and having your home fixed prior to any offers will give us the confidence to get the house sold in the shortest amount of time for the most amount of money." OK sometimes it works and sometimes it doesn't but at least I said it.

Thanks Jason for the great post! Ill be using this in the future! Its always good to get advice on how others handle objections.

Honesty upfrom is the best policy. I make sure that I am armed with the most recent CMA, then have the seller determine the sales price based on the hard facts in front of them. Caution them to base the price on current market sales data in front of them, not sentimental value or what they must clear based on their financial issues. Explain "the market" and how appraisers reflect recent sales only. If they refuse to accept reality, go over the CMA again and give your opinion on the sales price, and why. If they don't accept reality, repeat your questions on how soon they need to have the property sold. If you must accept an unreasonable sales price, build in a price reduction discussion every 3-4 weeks.

Jayne Meaut, Exit Allstar Realty

Great Points Jason! :) I often spit things out and have to deal with the explanation later! Just ask my husband!! ;)

And like Brian Tracey's book, "Eat the Frog First" Share the bad news as soon as you can, otherwise it will consume all of your thoughts and energy worrying about the delivery. Hence #1 above, just say it!

Good stuff Jason!

Getting it to appraise out, is the trick we're finding isn't a trick any longer, around here. It's fact.

Amazing Jason, hit a nerve that so many of us deal with and the responce is crazy! Something we all deal with and desire to do elegantly and gracefully, being respectfull of our clients.

Wow...27 days? I will call you later this morning and we can pick a day.! BTW I am glad to see this post garnered so much well deserved attention!

Fabulous! Succinct and to the point. I am a new agent (since March '09) and glad to be learning this lesson early on in my career. I am the kind of person who doesn't want to "hurt anyone's feelings" but in this business, we DO have to be straightforward with the information, no matter how painful. Thank you for putting it all so well!

I find if I mention the nice upgrades or that the home will show really well, that's what they remember and then don't understand why I recommend such a low price - - mixed message = confusion. I know that the best thing is to "Just spit it out" and this is a timely reminder for me; I do tend to try to soften the bad news - see my first sentence above.

I always like to hear how other people do it. Truth is aways the best policy.

Jason! Great Post! Get the charts/graphs out and show them the market in writing! The charts and graphs will speak the truth for you!! It will make your job much eaiser! and walking away from the dinner table will be easier as well if they are not reasonable! Continued success in Austin!!

Good advice. Thanks.

Good Stuff, I think I have used everyone of these many time. Sometimes all in the same listing appointment lately. Take care!!

Too many agents are afraid of rejection that they don't want to say anything that might cause rejection from the seller. They need to realize that if they want to be treated as a real estate professional they need to always tell the truth, even if it hurts. Conveniently not telling the whole story will always come back to haunt you and it will only hurt more then because the agent will know they caused their own pain.

Excellent post.

You're absolutely right that it's easier to just say, than to think through and agonize trying to find an easier way to deliver the message as the message ... is just that, the message.

Jason: Good Stuff! I highly recommend honesty! I've lost a few listings to others who priced higher, but it was worth it to tell the truth, rather than have to field calls from disappointed sellers for six months or more.

Great post. Very useful in today's market situation.

telling a seller bad news is though but your right just spit it out and it will be ok

Giving people the best information helps them make the best decisions.

I have found that while offering the explanation, using the expression "the buying public is..." takes the opinion part of the explantaion. For instance, "The property sales in this neighborhood shows that the buying public will pay..."

Hi, Jason! Coincidentally, I had to have a tete-a-tete with sellers about doggy odor, clutter, and orange wall paint a few days ago. Actually, they acknowledge the problems and seemed to respect me for it. It's always easier to be honest about negatives when you have taken time to build rapport with clients. Bad news happens to good people!

Jason, thanks so much for sharing clear, simple, helpful tips! Thanks also for sharing sample comments, that always helps me put suggestions into practice! It also helps to remind yourself that, aside from the fact that it would be nice to have the listing, if we really care about putting their best interests first, we will be honest about the best way to do that. If they refuse, it's not because we haven't done our best to help them. And that is success building.

Appreciate your pearls of wisdom. And, as Kristi May sugggested some of your sample comments are also helpful. Hearing that the home they think is worth $2 million is not going to fetch that price is not something a seller wants to admit to. You'd think having their home on the market for more than 400 days (and not selling at that price would convince them). I didn't have the listing, but now they're looking at re-listing with a new agent and the comps just don't support a $2 million asking price. Honesty is the best policy."

Here's to better days ahead.

Aloha

Debra

When paradise is calling you, call me!

Great post!! I couldn't agree more that it is best to break the bad news right from the start. I'd rather lose the listing then have to hold an over priced listing. Good tips!!

Jason ... Thanks for your post about communicating with seller clients and possibly with news that they won't want to hear. I like that you are coaching "direct" but not "blunt" communication. I am good at "direct" communication and sometimes a bit "blunt", so I want to be thinking about the difference.

Great tips, Jason. I just recommended to a Seller to wait awhile and she agreed. She wouldn't even get close to what she's asking if she listed now. I have sent her updates on what's happening marketwise in her s/d and area and she is most appreciative. This also confirms I am not going to forget her, but just ride the wave until a better time. Thanks again.

Communication and honesty is the best policy in work and life.

Honesty done in a timely matter is what has always been what has worked for me

Have you seen the new show "Real Estate Intervention?" Sometimes I just can't believe how stubborn or in denial people can be. The truth can sting, but it's best not to have unrealistic expectations.

This is a fabulous post!!! You're suggestion in rule #4 is perfect. Thank you.

I like the way you put - straight and k.i.s.s.

Todays sellers have to fiercely compete with the abundance of bank foreclosures. It is not fair they are getting the short end of the stick - but they were once buyers, and if they were in this market buying they would understand a little better why their house won't appraise. Still, reminding them of this makes us the bad guy, as usual, so why worry about delivering bad news - right?

Reality is reality unfortunately not much good news in this market.

There are always options and I put them all on the table.

The best decisions come from being fully informed.

Great post...I have had a few clients that get a little crazy with wanting the upgrades to trump whatever is going on in the market. I will definitely be using this info...thanks.

It's always hard to deliver bad news, but if you are working for the best interest of your client (the Seller), it's easier to do. If you keep the best interest of your client in mind with all decisions, you really can't go wrong.

Great post - its never easy to tell sellers what you know they don't want to hear. As a stager I have to do it all the time. I find it helpful to put a positive spin on things whenever possible ... I often say things like, "we're just looking for ways to make a great house even better!" Being extremely respectful, tactful, compassionate, sincere and non-judgmental works pretty well for me too. I believe that sellers who are not willing to listen are more than likely not entirely committed to the idea of selling.

OCT

Oh, Jason - you are so right. I just had this conversation with a young lady on Wednesday afternoon.

This couple bought the home in 2004 for $97,500 and financed $99,500 - 750 square foot home -

the foreclosures and short sales are killing these sellers. Now is just not the time to put your house on the market if you don't really NEED to sell it. Clients will always respect you for being honest even if they really don't like what you are telling them.

Thanks for a great post - as always.

The number one thing we could do to speed up the process of getting out of these markets is to tell sellers the truth! No matter how badly we feel for these people, we must tell them the truth! Thanks for the post!

Been there, done that. I've even saved time by not going through my whole listing presentation and how great I am when I knew they wanted $100,000 too much. Told them the truth, hope they call me when they really want to sell.

Jason-

I am a Listing Agent for the most part. One of my Sellers told me I was "uncooperative" and "negative' since I wouldn't even "try" to get 30% more than market value. (Try...as in put it on the market at 30% higher and see if some fool with a pocketful of cash would buy it.) Needless to say I told him that I was unable to work with him.

I always preface bad news with "Do you want me to tell you what you want to hear... or do you want the truth?" And there is alot of bad news re: price right now for Sellers.

OCT

Jason,

All you can do is speak the truth in love and leave it alone. I have an expected outcome but I'm not going to wait too long for the seller to come over to my view for very long. The facts don't lie.

Right on! Jason, another post that is to the point.. Thanks!

OCT

Nothing like shooting straight fro the hip! Wish Pam a happy Birthday for me - hope its been special :-)

OCT

I will be delivering bad news tomorrow. Thanks for the reminders!

www.REChamp.com/agents

http://www.youtube.com/watch?v=mXUOg8mbb8U

You do not have to give sellers bad news-give them a full price offer now!

Great post and so true! Lately it seems that most of the sellers I meet with aren't necessarily happy about the value of their homes, but I'm always up front about it. And I use #4 often. :)

OCT

Jason, You are so right - honesty is the best policy. I believe one of the reasons real estate agents aren't held in the highest esteem by consumers is due to the "get the listing / sale at any cost" mentality of some agents. As I firmly believe, that attitude needs to change. I hope to help change it!

Jason, as everyone has noted, the truth is always best.

OCT

Jason... you said "direct and honest" ...I agree are
not only the best policy for the immediate situation,
but the foundation for a good future relationship
based on trust.

OCT

Sometimes you have to be the bearer of bad news. I've had to do it in the past. Some accept it and others.. Well you know the outcome.

OCT

Hello Jason,

Love the post.

In my five years I come to realize that terminology and choosing the right words is critical. I like to view the home first before I go over numbers with my prospects and then as we sit at the table and after I told them about the nice features of their home; I say things like "Now lets see what THE MARKET" shows us your home is worth. I take myself out of the equation at this point and point it right back where it belongs, on the market.

When addressing objections, I also like to use analogies that they can understand like; If you are going to super market to buy a gallon of milk and Kroger has it for $1.99 and Albertsons has the exact same milk for $3.19, where would you buy your milk? They say well Kroger of course. They I go on to say, lets say that Albertsons puts on a carnival in the parking lot but is still selling their milk for $3.19; where would you buy your milk? I usually get things like I love to check out the carnival but then I would go across the street to Kroger to buy my milk. Then I use the phrase given to me my first year in the business; "Over priced listings sell other peoples houses".

I recently read an artical that mentioned how to use the prospects own reason for selling to keep them focused. The artical went on to say that you should ask them why they are moving, but don't stop there. Ask them to tell you in their minds eye what that would look like to them. Having this information for me has really helped because it as allowed me to bring them back to THEIR reason and vision of why they are selling in the first place.

Keep up the rain! www.starstatehomes.com

OCT

Such a great reminder. With the way the market has changed, I know many sellers are very disappointed with the numbers their agent gives them, or what the buyers offer. But not telling them the truth in front is really only going to waste your time and theirs, so do at the beginning (then make your quick exit if needed!).

OCT

really important post, i send e mails out to my agents on and off and one was about telling the clients the truth, no matter how hard it is. we don't want to hurt their feelings but what if the doctor told you your blood pressure was fine or your labs came back great because he didn't want to upset you, or lose you as a patient. a professional needs to be a professional and i think sometimes we forget this.

Hi Jason, I just got a call from a seller who I gave a CMA to 3 months ago. I said his place might sell for $625-$635,000. He did not like my suggestion and when with an agent who "bought the listing' by saying he could get $725,000.

Thw seller reduced his price 4 times, finally down to $675,00, had over 40 showings and no offers! He called after it expired and said I could have his listing if I still wanted it.

I said,"what price?, he said "$665,000 and for 60 days" and I said "No thanks!". Some sellers just don't get it.

OCT

Good, direct communication that is considerate always wins the day. I've had people decide not to list, then rethink as the days, weeks go by. I think that will happen to some potential sellers over the winter in particular.

OCT

In the current Arizona market you better be able to spit out the truth! I think that even if the seller's get defensive, which we all know they sometimes do, reality does sink in and they have a much higher level of respect for your professional, accurate and honest advice.

Taken from an episode of 'Two and a half men', Charlie had women eating out of his hands by simply saying; "I understand." Even when he didn't, he still said it to them and they just doted over him. I admit, I use that more and more since I saw that episode. It seems to work and what's more....I usually DO understand. debra edwards Highlands/Cashiers, N.C.

OCT

Excellent tips! Thanks!

So here's an angle that I don't see anywhere else in the comments. Hire a home stager! We can help the client get the absolute most for their home, even in tough markets. We don't cover problems up... we identify them and encourage the seller to address them.

We also protect your relationship with the client by handling tricky conversations for you, plus your image is given a real boost for bringing a specialist into the mix.

You will likely be able to list for more, and staging costs WAY less than even the first price reduction would.

Give it a try.... what have you got to lose?

I will follow-up with Christine's comment......Yes, not only can we deliver the 'tough to say' words with professionalism, we also know how to improve the marketability of the home. Sellers take it very well from those of us who are Professional Home Stagers.....they are used to see it on HGTV. Realtors do not have the same impact (usually) and rarely will a homeowner look to you as a decor expert. That is the TRUTH.

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