When Your Listing Isn't Selling, What's the First Thing to Fix? All Together Now...

By
Education & Training with Sell with Soul

excerpted from my new book "If You're Not Having Fun Selling Real Estate, You're Not Doing it Right!"

When your listing hasn't sold, what's the first thing you look at? 

PRICE!

Right?

Nope. Not always. Not even most of the time.*

Many real estate agents claim that price cures all. And in a way, they're right. If you have a listing that shows poorly or is difficult to show or smells funny, there probably IS a price that will inspire buyers to overlook the clutter, access issues or eau du Chef Boyardee.

But is price the RIGHT answer? Again, not always. Not even most of the time.*

Why on earth not?

Three reasons.

First, I hope that when we real estate agents price our listings, we're pretty proud of that price. If I've put a price on a property, unless the market has declined, I'm pretty sure I'm in the ballpark. And the thing is, in today's market, buyers are well aware that they can "make an offer," so a minimal price reduction--say, $229,000 to $224,000 probably isn't going to make much of an impression on the market. In order for a price reduction to be meaningful, it's going to have to take that listing into a different pricing tier, thus introducing it to a whole new set of buyers who weren't looking at it before. And, depending on the price range of the property, that might mean a price reduction of $20,000 or more.

Now, think about what we could do with that $20,000--seriously.

Second, automatically resorting to the solution of reducing the price is really not what my seller wants to hear, and in that mindset, he's likely to question my professionalism and commitment. Let's face it, a price reduction is an awfully easy solution to offer and often abused by the real estate community. We all know agents who "buy" listings at a too-high price and then, as part of their game plan, beat up the seller later for a price reduction. And this isn't a secret to the general public--a lot of sellers are aware this happens, too. So, when your first and only solution is a price reduction, I believe it can really damage your credibility, especially if you recommended or agreed to the price in the first place.

But the main reason I'm opposed to looking first at the price as the solution is because it's rarely the best solution for the seller.

The thing is, there are tons of solvable problems - some simple, some not-so - that can keep an otherwise marketable home from moving. Our job is to play detective with our non-selling listings to determine if there's a problem we and/or our seller can solve, outside of a price reduction.

Stay tuned... I'll pick this up tomorrow!

*Unless you're overpriced to begin with, of course.

 

 

fun

 

 

www.SellwithSoul.com

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Show All Comments
Ambassador
879,247
Larry Bettag
Larry Bettag - Cherry Creek Mortgage - Saint Charles, IL
Regional Vice-President

This is a great and different perspective.  It's obvious sometimes.  But sometimes the obvious needs to be pointed out.

Jun 24, 2009 09:06 AM #4
Rainmaker
76,224
Bridget Cella
Re/Max Connection - Sewell, NJ
e-Pro, Realtor

I can hear the enthusiasm in your posts!  I hae a few listings that are sitting and are priced according to the market.  I hate to tell my clients they need to reduce when the market is giving them the numbers.  A waiting game of sorts!

Jun 24, 2009 09:33 AM #5
Rainmaker
583,839
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

eau du Chef Boyardee....... LOVE IT!

I couldnt agree more.  a few thousand into the house up front will probably bring that extra 20k in the price.  I love your ideas of having a handyman as part of your team and bringing them in on the deal to get the little stuff fixed so the home shows well.

and Chef Boyardee, smells better than it tastes!

Jun 24, 2009 09:44 AM #6
Rainmaker
1,089,221
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc

Ok Jennifer.......you left me hangin'. If not price...what then? Assuminmg that the property is being properly marketed. I guess I'll have to stay tuned.

Jun 24, 2009 04:59 PM #7
Rainmaker
434,446
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Suma - Price is definitely the easiest solution - but I think it gives the seller the impression we're lazy ;-[

BB - I don't believe you can "properly market" an unmarketable home... but yes, stay tuned.

Rob - UGH! Don't you love those condo hallways that reek of Chef Boyardee???

Bridget - I had to recently reduce the prices of two listings and it broke my heart to do because I truly believe there's usually a better answer. BUT, in this biz - there aren't a lot of hard & fast answers are there?

Larry - I try... ;-]

Heather - Agreed. The thing is - very often a $20,000 price reduction can be avoided with $2k of work - and we really need to offer our seller the option instead of deciding for them that they can't or won't do the work.

Norma - Aggressive marketing can't sell a house that isn't marketable. This, I believe, is one of the most harmful myths of our business. The product needs to be a quality product OR priced extremely aggressively.

 

Jun 25, 2009 05:25 AM #8
Rainmaker
246,344
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

so I am waiting too! keep writing!

Jun 25, 2009 12:58 PM #9
Rainer
83,756
Andrew Haslett
Van Warren Home Inspections, NAHI CRI - Fort Knox, KY
Heartland of Kentuckynulls, Best Home Inspector

Jennifer, thanks for these thoughts. I certainly hadn't thought of this angle before.

And, how do you keep an idiot in suspense?

 

 

 

 

 

 

 

 

 

I'll tell you tomorrow :-)

Jun 27, 2009 11:25 PM #10
Rainmaker
1,345,674
Vickie Nagy
Vickie Nagy, Broker Associate Realty ONE Group BMC Associates | BRE#01363932 - San Ramon, CA
Broker for San Ramon, Danville, Dublin, Pleasanton

I agree that the cost of updates can help support a home's askiing price. However, competition does set market value.

Jun 29, 2009 10:10 AM #11
Rainmaker
120,264
Joanne O'Donnell
Chic Home Interiors - Stager, Trainer & EcoProfessional - Oakland, CA

Jennifer, your post reminds me of an old staging adage - "The investment in staging will be less than a price reduction..."

Jun 30, 2009 09:54 AM #12
Rainer
28,058
Michelle Yackel
Divine Redesigns - Atlanta, GA
ASP, IAHSP

I think if more agents would tell their sellers this truth - the house will not sell "as is" for this price - and recommend raising the condition of the house (through staging, repairs, minor renovations/updates), the market wouldn't be so overflooded with houses that haven't sold!  Like Joanne just said, the investment in staging is always less than a price reduction!

Jun 30, 2009 10:05 AM #13
Rainmaker
434,446
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Michelle - here's the thing. So many agents scream about how nothing is moving in their market and they have all this data and statistics to back it up - and yes, times are tough. But maybe nothing is selling because the inventory sucks!! If more listing agents would strive to help their sellers create marketable products, maybe some more of them would sell...

Jun 30, 2009 10:40 AM #14
Anonymous
Anonymous
Melissa Brown

Can't wait to hear everyone's suggestions.  I have been on both sides of this issue - I've had overpriced listings that I'm embarrassed to say that I took because I was a rookie and was just thrilled to have a listing.  I've also had homes priced way under what I perceived to be market value based on a detailed CMA that sit and sit.  I am finding that buyers are being so picky now (because they can) that price is not really their primary concern because they will offer what they want anyway.  If a listing is not in the best condition and staged beautifully, buyers will just pass it by. 

 

So I'm dying to hear everyone's suggestions!  For me, after pricing the home right, staging is where I'd spend the money.  My problem is that only one of my sellers in the last year forked over the money for staging, and then it still didn't sell :(

Jul 02, 2009 11:15 PM #15
Rainmaker
434,446
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Melissa - WOW ! What an insight! "Price is not the buyer's primary concern because they will offer what they want anyway!" Holy Schmoly. That's flippin' brilliant.

We all take overpriced listings - so don't fret if you've done it and continue to do it. Just don't do it intentionally anymore, k?

I'm working on a blog about how to get the seller on board with your suggestions... stay tuned.

Jul 03, 2009 05:36 AM #16
Rainmaker
245,993
Troy Erickson
Diverse Solutions Realty www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Jennifer - Doing other things to the home instead of lowering the price means that the seller must be on board with that suggestion as well.  Many times sellers don't want to make that extra effort, and would just as well reduce the list price by $5k.  I agree that there are many other things we as agents can recommend to make the home more appealing to buyers.

Jul 04, 2009 02:40 AM #17
Anonymous
Anonymous
larry Jebsen

Price is not the only answer, but it is the largest part of the answer. My company will have a listing (automatically) on 160 web site and on social networking pages. Every listing has a virtual tour on every web page as well as on web able telephones. But marketing cannot sell an overpriced home. Try educating sellers to the reality of the market. Price the home where other,similar, homes are "selling" and then use marketing, door knocking and open houses to drive many buyers through. This combination will get people to buy the home over asking price in a short period of time. The perception of the "good deal" that they are all seeking will get them to begin to bid. We have been doing this quite a bit. This is using price as a marketing strategy and not as a default position.

Try it.

Jul 08, 2009 09:27 AM #18
Anonymous
Anonymous
Sybil Campbell

Jennifer,

How many times have lost a listing to one of those "buy the listing" agents and then watched the sellers struggle for months or even a year possibly using several different agents before selling it at a lower price than you originally suggested?

Jul 30, 2009 11:33 AM #19
Rainmaker
977,730
Sharon Alters
Coldwell Banker Vanguard Realty - Fleming Island, FL
Your Fleming Island Relocation Agents.

Jennifer, I'm in suspense until I can find your next day's post! While a smaller reduction doesn't put it in another price category, it does get it back out there for automatic emails. Wonder what you would think about that...

Sharon

Jun 14, 2011 11:37 PM #20
Rainmaker
434,446
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Sharon - I dunno... I wonder if most real estate agents ignore those automatic emails - if they have a buyer in that price range, wouldn't they already have seen the listing in the MLS? And if they don't have a buyer, they won't care?

Jun 16, 2011 09:38 AM #21
Rainer
97,246
Karen Salmon
Royal LePage Benchmark - Okotoks, AB
Okotoks Real Estate Agent

Not sure what the rules are in the US but in some cases we can offer a "cash back at closing" to "fix" an issue. Sometimes if the problem is something that is easily fixed (eg purple carpet) it is easier to offer $5000 to replace the carpet rather than reduce the price by $5000. At least then the buyer has the cash to do the fix rather than a lower mortgage payment. Hope that makes sense. (I really should check to see if we can still do this!! Sometimes the seller will offer gift cards to home depot as well)

Oct 21, 2011 09:22 AM #22
Rainmaker
64,986
Karen Mathers - YOUR Vero Beach Realtor
Dale Sorensen Real Estate - Vero Beach, FL
When it Matters, Choose Mathers! 772-532-3221

THERE IS NOTHING THAT THE RIGHT PRICE WONT CURE!

I love it when I have listed a home that shows like a model because I know it is going to make it easier to sell. It may not bring $20,000 more but it will certainly sell faster and maybe even get multiple offers.  

I think we need to do a better job educating our homeowners.  I know I have a hard time telling a seller that they need to pick up laundry and do the dishes . . . I just assume they know that.   Lately I have been listing the home and then setting an appointment to come back and take pictures when they have had an opportunity to get the home ready. Half the time it looks the same. I know that home is going to sell based on price.

I am going to make a checklist of things homeowners need to do and removing all the magnets off the front of the refrigerator is the first thing!

Oct 22, 2011 12:33 PM #23
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Rainmaker
434,446

Jennifer Allan-Hagedorn

Author of Sell with Soul
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