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 better have a sound price reduction strategy in place or you are likely to anger sellers and lose business to other real estate agents.
In a recent episode of Pat Hiban’s Real Estate Rockstar Radio, John Ames offered up two must-haves for every real estate agent’s price reduction strategy. John uses this strategy to the crush the competition during a market downturn, but you should have it in your toolbox for all market conditions.
So, if you are ready, let’s take a look at how John handles reducing prices on listings. Speaking of listings…can you imagine walking into every listing presentation feeling absolutely confident you will win that listing? Check out Pat Hiban’s Certified Listing Agent course featuring 8 of the world’s top listing agents who will help you win more listings!
Put a Real Estate Price Reduction 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 real estate 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 when the market starts falling puts you at a disadvantage.
You need to prepare ahead of time. You need a plan in place to take action and get a jump on the competition.
But remember this, 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 market conditions to succeed.
This two-part strategy for reducing prices will help you when you start to see the market trending downward.
Two-Part Price Reduction Strategy for Real Estate Agents
In a market downturn, the number of buyer transactions decreases. Even a good agent with a nice portfolio of listings will sell fewer houses. In order to maintain production and to have market penetration, you must do two things.
Part 1 – You must 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.
Part 2 – Always set expectations with your seller as to what will happen (e.g., # of showings, # of second showings, etc.) once the house comes to market. More importantly, communicate to them 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 – 14 days then the market is telling us we are overpriced and we are going to price X.”
Remember this: communication is key to the success of your price reduction strategy – no matter what strategy you use.
Don’t miss the podcast to hear Pat and John role-play with the script John uses when his seller has seconds thoughts about reducing price – even when it was agreed to earlier in the listing agreement.
Would you like to listen to a more in-depth look at John’s price reduction strategy to help you succeed in a market downturn? Make sure to listen to the podcast right now.
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