Does your real estate price reduction strategy give you an edge on your competition while keeping your sellers satisfied?
Reducing prices on your listings can be tricky business. You had better have a sound strategy in place or you are likely to anger sellers and lose business to other real estate agents.
In today’s episode of Real Estate Rockstar Radio, John Ames offers up two must-haves for every real estate agent’s price reduction strategy. Ames uses this strategy to the crush the competition during a market downturn, but you should have it in your toolbox for all market conditions.
Put your plan in place
Many of you remember the housing crisis, and your careers survived it.
Some of you reading this, however, may not have been agents at the time. For those who have been in the game long enough to have made it through market downturns, you understand that waiting to figure out what to do until the market starts falling puts you at a disadvantage.
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Prepare ahead of time. Take action and get a jump on the competition.
Good agents don’t want a stable market. A falling market is where really good agents, ones who are prepared and skilled, will shine and take advantage of the conditions to succeed.
The two-part price reduction strategy
In a market downturn, the number of buyer transactions decreases. Even a good agent with a nice portfolio of listings will sell fewer houses. To maintain production and have market penetration, you must do two things.
1. Be more consistent on price reductions
Create a proactive price reduction program with triggers and price points, and put it in your listing agreements. This eliminates any misunderstanding with your sellers when it is time for first price adjustment.
2. Always set expectations with your seller
Be clear about will happen (i.e. number of showings, number of second showings and so on) once the house comes to market.
More importantly, communicate to clients how data and the market’s response will trigger the need to reduce the price of their home.
For example, tell your sellers, “If we don’t have a strong second showing or offer in first 10 to 14 days, then the market is telling us we are overpriced and we are going to price at $X.”
Remember this: communication is key to the success of your price reduction strategy — no matter what strategy you use.
In the podcast, we role-play with the script Ames uses when his seller has second thoughts about reducing price — even when it was agreed to earlier in the listing agreement.
Listen to the full podcast to hear more.
Pat Hiban is the author of NYT best selling book “6 steps to 7 figures – A Real Estate Professional’s Guide to Building Wealth and Creating Your Destiny,” the founder of Rebus University and the host of Pat Hiban Interviews Real Estate Rockstars an Agent to Agent Real Estate Radio Podcast with Hiban Digital in Baltimore, Maryland. Follow him on Instagram or Twitter.