No homeowners want to hear that their home is overpriced. So, it is essential for real estate agents to use effective price reduction scripts, dialogues, and techniques to serve the best interests of their clients. When a home is listed for sale for too long, the price is usually the problem. Therefore, finding the right price becomes crucial to address concerns about the home's size, condition, amenities, or location. In this article, we will explore some of the top-producing agents' price reduction strategies to help homes sell at the right price.
Setting Expectations Beforehand
A crucial aspect of price reduction conversations is setting proper expectations from the start. During the initial listing appointment, it is important to discuss the concept of the "magic month." By presenting detailed multiple listing service (MLS) data reports, agents can illustrate how most homes sell within the first month of being on the market. It is crucial to explain that if a home doesn't sell in the first month, a price adjustment is usually necessary. Using positive terms like "price adjustment," "price improvement," or "more competitive pricing" can help remove the negativity surrounding price reduction conversations. Additionally, proactively contacting sellers weekly to update them on marketing activities, feedback received, and the number of showings and website views can also help them understand the need for a price adjustment. By the third or fourth week, expressing concern about the price and suggesting a re-examination of comparable listings and sales in the area can prompt sellers to acknowledge the pricing problem. Watch the video below to hear from top producing agents about their price reduction scripts and methods.
Video: Price Reduction Scripts & Techniques
Price Reduction Scripts & Dialogues
Click Image for more Scripts to Establish How Far to Reduce
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INITIATE THE PRICE REDUCTION CONVERSATION:
- "Thanks for meeting with me, it shows me that you’re also concerned that your home is not sold. On a scale of 1 to 10, how honest do you want me to be?"
- Assuming the answer is 10, continue . . .
- "Great! Other agents might price a home too high to get or keep a listing, but my job is to get your home sold for the best price possible & protect your best interests. Is that fair?"
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COMPARE LISTING RESULTS TO MARKET STATISTICS:
- "We’ve had views online, showings, and __ offers to date. According to National Association of Realtors statistics, we know that when listings have a low amount of showings, a home’s price is 10% too high on average. Similarly, when homes are getting showings but no offers, a home is priced 5% too high on average. So if you’re getting views and/or showings, we know the price is the problem. Does that make sense?"
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RE-DISCOVER MOTIVATION FOR SELLING:
- "It appears that the market is rejecting our price. So tell me, is it still your intention to sell your home to _____? " (insert motivation here, i.e., move to a better school district)
- "Don’t you think we should do something about this immediately so that you can __?" (state motivation again)
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ESTABLISH THE REDUCTION AMOUNT:
- "So do you think we should roll the dice to see if a 5% reduction makes a difference, or play it safe by making an impact with a 10% adjustment so that you can __?" (insert motivation for moving again)
- Note that these percentages may be too high in many circumstances, but sellers are likely to feel much better about a 2.5% reduction when they are made aware that a 5% reduction is the national average.
(OR)
- "I don’t want to recommend that you “give it away,” though we need to make a price adjustment that will cause your home to sell now instead of having to make a larger reduction 60 or 90 days down the road. Remember that I work for you, so this must be your decision. So tell me what you are thinking . . . should we adjust by 5%, 10%, or 15%?"
Remember, using the right price reduction scripts and techniques can make a significant difference in selling a home. As a realtor, it is your responsibility to guide your clients through the process and help them understand the importance of pricing their homes correctly. By taking a proactive approach and using effective dialogues, you can ensure that your clients' homes sell at the best possible price.
