By Bruce Keith
Here are some ideas for what to say the next time a price reduction is required on one of your listings.
How do you respond when your vendor says, “It’s pretty hard to justify dropping my price when you are not advertising it in the newspaper/having an open house.”
Your answer: “I can see why that might frustrate you but let me ask you a question. Why do you think I am not doing that?
“The fact is that neither of those activities gets results anymore. Five to 10 years ago that’s how homes were promoted to the public… things have changed, as you know. Now everything is done through the Internet. Do you know how many websites we are showing your home on? (No idea, they’ll say.)
“Your home is promoted on no less than seven websites! We are getting interest in your home. Do you want to know how I know that?
“We are able to track the number of ‘hits’ every week. The buying public is definitely looking at your home on the Internet. The trouble is, they are not coming to see it because there are other properties with many of the same features as yours for less money. So we need to reduce it by $15,000. The new price needs to be $299,000. Can I have your approval to get that done right away?”
* * * * *
What about when your vendor says, “They can always make an offer, can’t they?”
Your answer: “Well, you would think that would be the case. In this market that doesn’t seem to work… can I tell you why?
“Let me start by telling you there are homes similar to yours that are selling every week. It is important to understand… the homes that are selling, are selling very close to asking price. So do you know what this means?
“It means that the buyers are looking at your home and your price, and saying to themselves that because they would not be prepared to pay ‘close to your asking price’ they are just going to go on to another home that has pricing that is more appealing. Make sense? (Your vendor may say something like, “I suppose, but I don’t like it.”)
“I don’t blame you Mr. Seller. At the same time, we need to get some offers in here, don’t we? Let’s reduce it by $15,000 down to $299,000. We should do that right away. May I have your permission to go ahead?”
* * * * *
Your vendor says, “Well this is rather silly because everything I read says that the prices are going up!”
You: “That’s a very good observation. The problem is that sometimes when the information is published in the newspaper, they aren’t very specific about exactly what is happening. May I explain?
“When prices go up in a market as broad as ours, certain price ranges go up when other price ranges stay flat or even go down. Your home is in the $300,000-$400,000 price range. There is an excess of inventory for those homes. The price range that is going up in price is the next level below you…the $200,000-$300,000 houses. We need to act now. Can I tell you what we should do?
“The good news is that most of the other sellers in your price range haven’t figured this out yet. We have an opportunity here! Let’s reduce your price by $15,000 down to $349,000 before the competition catches on. That way we will beat them to the punch. Make sense?
“Let’s sign the paperwork right now for $349,000, fair enough?”
* * * * *
Your vendor: “What difference will it make? We are not getting many showings anyway.”
You: “You know Mr. Seller, at first glance what you’re asking makes sense. The fact is though, there is an opportunity here that we are missing. May I explain?
“You see, when a real estate agent is working with a buyer, the agent looks at the price range that the customer can afford and then chooses from all the houses up to their maximum price range. For example if a customer said they could afford up to $400,000, the salesperson would look at all the properties for sale up to, say, $425,000. Any homes above that amount are ignored. We need to reduce your home $15,000 down to $425,000. Let me tell you the difference that will make.
“This will open up your home to a whole new group of buyers! All those customers who were maxed out at $425,000 have never been exposed to your property. Let’s reduce it right away to $424,900 so we can broaden the group of buyers who would love to see your home. Let’s sign the paperwork right now, okay?”
Bruce Keith, the “Sales Coach”, began his sales career at IBM and 15 years later used his marketing and sales expertise to develop a highly successful real estate business. He is a master of teaching “what to say and how to say it”. His high energy and entertaining training style has allowed him to create a popular coaching and seminar business for numerous sales organizations during the last 12 years. www.brucekeithresults.com.
Bruce Keith is a leading Real Estate Coach/Author/Speaker. Like Bruce Keith Results on Facebook or connect with Bruce on Linkedin. Email Bruce Keith.
