Too high a price is the most common reason a property can sit on the market for months. As it happens, agreeing on the listing price with your sellers is a tough undertaking, especially if they’re keen on listing high first, and if that doesn’t work, reduce it in a couple of weeks. If you find it hard to deal with sellers who are divorced from reality, here’s your action plan on how to reduce the listing price and move the selling process forward at full speed.
How to reduce the listing price: convincing your sellers
1. Bring pricing to the table early on
All too often, agents consent to list the price that sellers want in order to sign them up after the listing presentation. Both sides are hoping to have it their own way. Your sellers want to list the highest price possible, even if it’s unrealistic, and keep it for as long as possible. As an agent, you understand that won’t work but you say “yes” for now in the hopes of persuading them later on.
The truth is it gets harder to convince sellers to reduce the price the further you move in the selling process. So what is the best way out?
As top-producing agents all agree, get this question sorted out early on. During your listing presentation, present some figures on the local market and the recent home sales. By giving objective, fair and concise advice, you are delivering a good customer service, rather than telling them what they want to hear.
2. Starting high and reducing later?
Another old argument from the sellers is to start with the high price and tell the agent to reduce it some time later. In most cases, this never works. It’s a convenient way for a seller to put an end to the pricing discussion but a month later you’ll end up having the same conversation all over again.
Unless you have come up with and agreed on a specific schedule for reducing the price in the coming weeks, do not agree to this course of action. Better yet, make sure to put this schedule into writing so both of you have copies you can refer to any time, should any disputes arise (as they often do).
3. Track the prices from the moment your listing goes public
To sell a property for a good price, watch the local market closely as soon as you list the home. Talk about the price with buyers’ agents you are getting inquiries from and ask what they think about it.
If they could leave you some notes with their arguments, these would be great to present to your seller as yet more evidence of your expertise that is now being confirmed by third parties. With that combined body of expertise, it might be easier to convince the seller to abandon the too high price in favor of a competitive market offer.
4. What to do if you did agree to start high, then come down later, even if you know it’s a bad idea?
We were talking that any pricing strategy should be agreed early on, but what if you agreed to some blurred definitions? For example, start high, then reduce to your recommended price a month or so later?
The most important thing here is not to wait the whole month before bringing the pricing issue up again. Wait two weeks at most, then press the sellers again in order to adjust the price. The reason for this is that the activity and buzz around the newly listed property won’t last long. In fact, some surveys found out that the number of open houses and showings decreases once the property has been on the market for more than six weeks.
This means you have to closely monitor the situation and encourage the sellers to take action now rather than later.
Listing a property at a competitive market price is both an art and a science. You must get the timing right and agree on an actionable pricing strategy with your seller which is often the hardest part. Still, in most cases the question of how to reduce the listing price pops up sooner or later. The key is to follow up consistently and amplify your arguments with solid figures on the local market.