How to broach the conversation about a price reduction successfully.
How should you discuss a price reduction with a seller? This is a common conversation with clients in this market because things are changing daily. Previously, inventory would only last two to three weeks, but it’s now at five to six months, which is a normal market. Unfortunately, many sellers have not yet realized that. If you’re seeing 70% of properties around you get a price reduction, and if the property you’re listing is sitting on the market too long, it may also be time to discuss a price reduction with your client.
When you first take a listing, it’s essential to discuss the fact that we are in a changing market and that we don’t know how many other properties are going to be on the market for buyers to choose from on the day that your property goes pending. When working for your seller, you should also take a buyer’s stance. You don’t need to apologize for what’s happening in the market. The market will tell them when it’s time to reduce the price—you just have to open the conversation and show them the facts. How many properties are on the market right now? What is the average number of days on the market? Which properties went pending? How much is happening in their neighborhood?
“Get real with your client, but be patient and kind and deliver the facts.”
You need to have a plan of action and follow up with them regularly. If you see diminished showings and either no offers or offers that aren’t accepted because they don’t meet your seller’s expectations, you need to have another conversation. Even if you could wait forever for the right buyer, are you prepared to take on the upkeep, taxes, and maintenance until that happens? Eventually, the market may reach your desired price, but even if you got that price, would the house appraise? In our current market, people aren’t paying way over asking price like they did six months ago.
If your seller is holding out for their dream price, chances are that if the house isn’t getting offers, it also won’t appraise because the appraiser will look at five to six properties that have sold in the last three months in that neighborhood. If they can’t find that, they may go back six months or slightly outside the neighborhood, but they won’t consider one home that sold at a great price five months ago. You need to get real with your client, but be patient and kind and deliver the facts.
If you have any questions, don’t hesitate to reach out to me by phone or email. I look forward to hearing from you.
