Jennifer has written such a fantastic blog about price-reductions. Sometimes even though we thought we set the price where it should be based on the market, we still need to try something to move the property. Check out Jennifer's other blogs too, what a fantastic writer!
Related to a recent blog entitled "READ THIS Before Your Next Price Reduction Recommendation, today's post is about HOW to recommend a price reduction if it comes to that without blowing your credibility, or, frankly, ticking off your seller.
In a perfect world (and why not strive for that?), a price reduction is rarely necessary. In this perfect world, real estate agents price, prepare, and present their properties properly (I love alliteration) and therefore homes sell in a reasonable amount of time without the need for a price adjustment. Agents don't capitulate to the demands of sellers to overprice a home, nor do they "buy" listings with inflated estimates of market value, planning to push for a price reduction six weeks later.
Okay, so it's not a perfect world and L'il Miss Smarty-Pantz JAH didn't always score a 10 on the beam either when it came to pricing her listings for sale. Pricing is an art, not a science; the "right price" is a constantly moving target, and can be affected by many factors outside our control. So, it happens. Sometimes a price adjustment is the right thing to do.
So, what might be some ways to approach the price reduction conversation with your seller without jeopardizing your credibility (hey, YOU suggested or agreed to the price in the first place!) or otherwise creating unnecessary drama and angst between the two of you?
I have a few suggestions, but would like to hear yours!
1. Prepare the seller ahead of time that a price adjustment may be required if the market doesn't respond as favorably to the home as we hope it will. But do this carefully, not with a pre-printed price adjustment form or with a snotty attitude of "Well, we'll TRY it your way if you insist, but BE PREPARED to reduce the price," but rather as if you have just as much to lose as the seller does. In other words, "as if" you're on the seller's team... which you are, right!?
2. If you recommended (or agreed to) a price believing with all your heart that you were in the ballpark, but discover that, um, you weren't, take the blame. Admit that you were wrong and that you're very sorry you got the seller's hopes up. Perhaps something like: "Bob and Sue, I blew it. I really thought your house was nice enough to overcome XXX, but I was wrong. I'm glad we gave it a try, but I do think we're going to have to reduce the price significantly. Let me tell you what I'm thinking..."
3. As pontificated about in the original blog, it's best NOT to lead with a price reduction as your primary solution, for several reasons. One of those reasons is that if you are able to suggest alternatives to a price adjustment and the seller rejects your suggestions (e.g. stage the home, replace the carpet, mow the lawn, etc.), then you can feel much better about recommending a price reduction because it's actually the seller making the choice to reduce instead of fix or improve.
4. Related to #1, when a seller wants to push the price beyond your comfort level and if he's not too far removed from reality, agree to try his price for a week to ten days, no more. Don't get snotty about it because the fact is, you don't have a crystal ball; maybe the market will respond more positively than you expect! Say something like this: "Okay, let's try it for a week or so. It's a bit higher than I'd like, but I don't want to give away your money if I'm wrong. If we aren't getting the activity we need or if the feedback indicates the price is high, we'll reduce it to $XXX,XXX, deal?"
So... there are some suggestions that worked for me... any you'd like to share with the class?
Note to My Readers - Selling Soulfully blogs are written with the goal of inspiring intelligent discussion and good-natured debate among readers - not just a back and forth between me and you. Feel free to 'hijack' any of my posts with your own relevant links, opinions, rants or discussions - no need to ask for permission - just go for it!