3 Strategies for Getting Sellers to Price Right
March 1, 2007
1. Do what buyers are doing: Shop in a larger area. Today’s buyers are less wedded to one neighborhood, says Monique Walker, a salesperson with Intero Real Estate Services in Scottsdale, Ariz. That’s why she pulls comps from more than just the listing’s immediate area.
“I up the area to a five mile radius because buyers are willing to drive farther for better values,” says Walker. “I ask sellers, ‘If you were the buyer, and you had the choice of your home and a similar home five miles away for $25,000 less, which would you pick?’ That gets sellers to look at things objectively, she says.
If sellers still won’t price at market value, she walks away. “I lost two listings yesterday,” she says. “The sellers weren’t motivated. With the time, energy, and money we invest, we can’t afford to take overpriced listings and end up with unhappy clients. They won’t be clients for life, and that’s what we strive for.”
2. Show sellers the numbers, and don’t fall for the wiggle room line. Sellers need to see detailed market statistics to understand why prices from six months ago are no longer operational, says Michael (Brick) Brickner, a salesperson with Lyon Real Estate in Sacramento, Calif. Brickner uses comps from only the past 30 days. “The message is that the pricing is right now,” he says.
Brickner walks into every listing presentation with detailed statistics showing trends in his market, including the number of units on the market, the number of pending and sold units, the average time on market, and the average list and sales price. “They can’t argue with the numbers,” he says. “It’s very strong stuff.”
If sellers still ask Brickner to leave some wiggle room, he holds firm, saying, “I’m sorry, but if you want me to market your property, you have to offer it at this price.” Brickner says he remains silent and leaves it up to the sellers to decide what to do. Eventually, he says, they agree with him.
3. Don’t blame sellers for not being experts. “Practitioners make a mistake when they think sellers are being stubborn about price,” says Jose Del Rosario, operating principal of Keller Williams Tierra Del Rey in Chula Vista, Calif. “Sellers are choosing the wrong price only because they’re not knowledgeable about the market. Can you really blame them when they don’t have all the information we have?” Del Rosario emphasizes that point to his sales associates, and it helps change their mind-set going into listing presentations.
Del Rosario also tells his sales associates that they have to work hard to develop correct comps. Some pull only sold listings, but Del Rosario says you must also include pending sales because they’re often a sign of where the market is heading. And remember, the MLS doesn’t display information on concessions given to buyers to close the deal. “You need to call listing agents to see whether they’re willing to divulge that information,” says Del Rosario. When you present comps, you need to show sellers how thorough your research has been but that there are unknowns that may affect pricing.
Getting sellers to understand today’s market might take time. Most practitioners are hostage to a single listing appointment, Del Rosario says. “But you have to build a relationship with sellers so that they’ll listen to you. Sometimes it takes five minutes, but sometimes it takes five hours over five meetings.”