10 PRICE REDUCTION TIPS

By
Real Estate Agent with Charles Rutenberg Realty - Naperville

After 15 years of selling financial products, I am very comfortable talking numbers with people...

Pricing is the key to selling homes.

Yes, you want the home staged correctly...

And yes, the home needs to be marketed properly...

But if it isn't priced right, you have no chance.

Period.

With that in mind...

10 TIPS FOR GETTING MORE PRICE REDUCTIONS: 

  1. Have a pricing reduction system and explain it to your clients up front.
    It is best to price homes correctly from the beginning. Nevertheless, many clients will want to test the market.  I understand.  So you need to have a price reduction system and explain it up front. 
    My system:  My listings will have at least 2-5 showings per month.  They will also have a contract within the first 10-15 showings.  If they do not, they are overpriced.
    That is my pricing system.  You better have one too...

  2. Bring a listing modification form on your first appointment.
    I want my clients to understand the process up front.  Part of that is being comfortable with the paperwork.  I show the listing modification form at our first meeting, so they will feel comfortable with the paperwork and the process.
     
  3. Set your clients up with an email search of their neighborhood.
    Keep them educated.  Using the local Multiple Listing System(MLS), agents can easily provide clients with detailed information from their neighborhood or subdivision.  With this information in front of them, your clients will usually understand the realities of their own market.

  4. Keep your clients focused on the buy side. 
    In this type of market, the selling of a home can be a difficult time. There are less showings, contracts, and offers than there were 5 years ago...
    Keep them motivated by looking at some homes.  Set them up with an internet search of homes that match their needs/wants.  If they find something they really like, they may be motivated to price their home to sell even sooner.

  5. Show them the internet traffic.  
    I send my clients weekly reports from Trulia and Realtor.com that show the on-line traffic their homes are generating.  They see their homes are being "seen" even if they are not being seen.

  6. Let the client have final say on pricing. 
    I try to act as an advisor for my clients.  An advisor who educates.  Who consults...
    But the ultimate decision is theirs.  Let them know that.  They will make the proper decision.  Eventually...

  7. Stay on top of the subdivision/immediate competition.  
    Become the expert for the neighborhoods you are market in.  Being the "local expert" will give you confidence that will lead to better pricing...

  8. Give them what they want.
    Host open houses.  Most clients appreciate their agents hosting open houses.  They will know you are working for them on that day.  They will adjust their prices quickly when they know you are working hard for them.

  9. Don't ask for price reductions.  
    I use a "passive aggressive" approach to sales.  I don't ask for price reductions.  I want my clients asking me to reduce the price.

  10. Post your thoughts on pricing.
    This post will probably be read more than 1000 times.  Some of those readers will become clients.  They will already understand my "system".  These are great clients to work with.  They called me.

 

I hope some of my tips work as well for you as they do for me.

Ken

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Re-Blogged 27 times:

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Show All Comments
Rainer
7,848
Chris Schneider
Artistic Staging and Design - Scotchtown, NY
Home Stager

Hey Ken,

Great Post on a HOT TOPIC!

Being a Home Stager, I like that you opened by saying a property should be "staged correctly"... but that is often not the case. Many realtors still hesitate to bring in a professional Home Stager, thinking they can "Stage" a listing themselves...or homeowners think a few hours in front of HGTV made them "Do It Yourself" experts, yet the cost of a professional Home Staging is always less than the cost of the first (and subsequent) price reductions. I've seen too many open houses with "Do it Yourself" staging that "Show well" but is so obvious to me, none were professionally Staged, and sadly even after leaving my card with the realtor I will drive past a few weeks later to see the big "Price Reduction" Sign hanging out front. Too Bad.

I'd love for more Realtors to realise the difference "Staged" and "Professionally Staged" can be.

Jul 13, 2010 09:04 AM #145
Rainmaker
479,175
Ken Tracy
Charles Rutenberg Realty - Naperville - Naperville, IL
Naperville Illinois Real Estate

Hi Ty, Valerie, Bill, Woody, Roseanne, and Chris.  Thanks for reading.

It sounds like many agents already have solid systems in place to get reductions in advance.  That is great.

I am still amazed how many time this post is getting read.  Even several days later...

Thanks again everyone!

Ken

Jul 13, 2010 09:55 AM #146
Rainer
56,501
Rose Marinaccio
Coldwell Banker Residential Properties - Scarsdale, NY

Ken- Have you ever had any problems with sellers who are not happy about #2- seeing a listing modification form, up front, before you even list the property? It almost makes it seem like you already have no confidence in getting the listing sold at that listing price, and are already preparing the sellers for failure. 

Although I understand the need for preparedness, I think showing a seller a listing modification form in the beginning and telling them that there is a possibility they will have to reduce their price would not instill confidence in their brokers ability to get the job done. At least not in my market, this would go over very poorly.

However, there are occasions where the broker knows that the listing is overpriced, or will have much difficulty in selling, and at that point, it is good to prepare the sellers for reality...a price reduction, so they are not surprised later on.

Jul 13, 2010 10:41 AM #147
Rainer
62,978
Nicole Donaghy
ERA Wilder Realty, Lexington SC - Lexington, SC

These are excellent tips.  We should all have a similar system!

Jul 13, 2010 09:02 PM #148
Rainmaker
604,157
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

No blog ever dies on the Rain.  They spring back to life through reblogging.  And, you will get your just reward for this one.  Very well-written. 

Jul 13, 2010 10:43 PM #149
Rainmaker
479,175
Ken Tracy
Charles Rutenberg Realty - Naperville - Naperville, IL
Naperville Illinois Real Estate

Hi Rose, Nicole and Don.  Thanks for reading.

Rose, I have never had a problem.  I believe it is in the presentation...

Thanks again,

Ken

Jul 14, 2010 07:53 AM #150
Anonymous
Anonymous
Deanna Lopes

Ken,

What do u do when it a good listing in great condition, started out at a low price because the client just want to get rid of it and there are no calls on the property? Thousands below assessed value and still dead in the water. Could it be priced so low that they just assume something is wrong with it; structuraly or something else? At a listing price of $162,000 for a 3 Br, 1 Ba on the Cape. I am lost for what to do with it now.

Deanna

Jul 17, 2010 11:39 AM #151
Ambassador
1,113,041
Michelle Carr-Crowe-Selling Silicon Valley Homes in Top Schools San Jose, Cupertino, Saratoga, Palo Alto-Just Call 408-252-8900
Just Call 408-252-8900 Lynbrook Homes Cupertino KW - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

OK, I'll bite...how is it your clients ask YOU for the price reduction?

Jul 20, 2010 01:55 AM #152
Rainmaker
479,175
Ken Tracy
Charles Rutenberg Realty - Naperville - Naperville, IL
Naperville Illinois Real Estate

Hi Deanna and Michelle.  Thanks for reading.

Deanna, if no one is calling or looking, it is still overpriced...

Michelle, if I do everything right (including steps 1-10), my client understands the role pricing plays in getting a home sold.  Sometimes it takes time, but they usually come around to the reality of the situation and lower the price...

Thanks again,

Ken

Jul 20, 2010 09:37 AM #154
Rainmaker
190,298
Bobi Bigelow
Alpine Lakes Real Estate - Lincoln, NH
Advertising, Marketing, Public Relations

I enjoyed reading your post. We follow a lot of your values Ken.

It's my job here to do marketing for our customer's properties. I put a great deal of time and effort into making sure each property is advertised in as many places as possible and then I send reports out to our customers so they see their results of how many hits their property have had. I know the market isn't as good as it was 4-5 years ago, so that's why it's more important than ever that we show our customers how hard we are working to sell their properties. 

Jul 22, 2010 10:45 AM #155
Rainmaker
479,175
Ken Tracy
Charles Rutenberg Realty - Naperville - Naperville, IL
Naperville Illinois Real Estate

Hi Bobi.  Thanks. 

There is so much we do that customers don't ever know about...

Alpine Lakes?  Sounds beautiful...

Thanks again,

Ken

Jul 23, 2010 03:43 PM #156
Rainmaker
356,576
Sybil Campbell
Century 21 John T. Ferreira and Son Inc. 500 Centre St. Amelia Island, Fl 32034 - Fernandina Beach, FL
REALTOR ABR, SFR, SRES - Amelia Island

These are great tips. It is so important in this market to price properties correctly so that they will sell!

Aug 02, 2010 03:16 PM #157
Rainer
126,954
Herman Herrera
HERMAN & CO REAL ESTATE l Staten Island, New York - Staten Island, NY
Your trusted Staten Island Real Estate Expert

Great read Ken!  Thank you!

Aug 04, 2010 05:35 PM #158
Rainmaker
341,953
Don Wixom
RE/MAX Advantage Nampa, ID - Nampa, ID
"Looking out for your next move..."tm

Ken, great tips! I love #3!  That is a great idea to keep them informed of what's happening in their area! Nice post!

Aug 20, 2010 08:05 PM #159
Rainmaker
205,179
Ann Nguyen
Dickson Realty - Truckee, CA
Lake Tahoe Truckee Homes For Sale

Ken...all good tips to keep the sellers in the loop regarding correct pricing. It is imperative these days to educate the clients up front.

Jul 18, 2011 06:31 PM #160
Rainmaker
1,258,196
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I think your approach is very good.  Thanks for a great post.  Having educated sellers is always a plus.

Jul 20, 2011 01:12 PM #161
Rainmaker
479,175
Ken Tracy
Charles Rutenberg Realty - Naperville - Naperville, IL
Naperville Illinois Real Estate

Hi Gene, Ann, Don, Herman and Sybil.  Thanks!

Good to get some activity on an older post...

Price em right.  Get em sold!

:)

Thanks again,

Kn

Jul 21, 2011 03:09 PM #162
Anonymous
Anonymous
Jack Ehlert

Great tips Ken... Love your positive, proactive, upfront approach.  My rule is 10 showings or 30 days, whichever comes first!  Keep up the good work!

Aug 29, 2011 10:51 PM #163
Rainmaker
479,175
Ken Tracy
Charles Rutenberg Realty - Naperville - Naperville, IL
Naperville Illinois Real Estate

Hi Jack.  Thanks!

 

Aug 30, 2011 12:50 PM #164
Rainer
333,112
Paul Gapski
Berkshire Hathaway / Prudential Ca Realty - El Cajon, CA
619-504-8999,#1 Resource SD Relo

great post ken, i always love when clients ask to drop the price

Jan 28, 2012 10:14 AM #165
Show All Comments
Rainmaker
479,175

Ken Tracy

Naperville Illinois Real Estate
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