5 Ways to Recommend Price Reductions to Sellers
I have found recently that one of the hardest recommendations for a Realtor to suggest to his seller is to do a price reduction. There can be a lot of resistance as it is an emotional timeframe for the person trying to sell their property. I compiled a 5 point list below to help take some of the emotion out of the equation.
The list can be helpful for a seller who is evaluating his position with his own home or a Realtor who is staying in contact with his seller making recommendations. Also, it is a good idea to go over this list at the initial listing presentation so there is a strategy in place from the beginning. I believe price reductions are a critical part of any listing strategy in this marketplace.
1. Days on Market (DOM) - A seller should consider price reductions at least every 30 days on the market. In the current market environment, I would also suggest to reassess every 2 or 3 weeks.
2. Number of Showings - Another strategy is for a seller to consider doing a price reduction after a certain amount of showings. My initial suggestion is 10 showings. The theory here is that after those showings the buyer pool may start to run dry so a lower price will keep the traffic coming.
3. Feedback from Showing Agents - If every agent that comes in provides feedback of "priced too high" than that is a signal to do a price reduction. I really love using eshowings seller reports which I email to the sellers once a week or even daily if they request it. These reports track the number of showings and feedback that includes pricing, how did it show, and if there was interest.
4. Recent Market Activity - Since the property was listed, if there has been new competition that has come on the market at lower prices, than it is time to be more competitive. Or if some of the recent homes have recently settled those numbers should be evaluated to determine and adjust the pricing of the home. As a listing agent, it is critical to track the recent activity around your listings to communicate these facts to your seller. This is great information to use for a client service call.
5. Stigma / External Factor / Personal / Other - Any other factor that relates to the sellers goals needs to be taken into account. If there are personal reasons that the house needs to sell faster, than it is time to lower it. Maybe the seller is trying to buy a house on the other end and needs to sell his first ? Well then it is time to be more aggressive. In regards to "other", there are some blocks in Philadelphia that can get really loud in the summer. That being said, I would be more aggressive now with the pricing than taking the risk that the house still has not sold by June.
What are other ways that you use to recommend price reductions for your listings ?
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If interested in buying or selling, contact Chris and Stephanie Somers at thesomersteam@yahoo.com or 215-400-2612 . Connect with us on Facebook and Twitter.
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