Price Reductions

This is an area that the pros excel in and the newer licensee’s tend to feel intimidated at. I wonder when your Doctor increases the dose on your meds if he begins to get this gut wrenching feeling and dreading the call to you that Realtors feel when they call the seller and ask for the reduction. Well that is what a price reduction is, increasing the dosage to get the desired healthy result.

If your listings are not getting the activity needed to generate offers you need to pick up the phone and re-prescribe a new price, if you don’t, that’s mal practice, not doing what needs to be done. Now you’re thinking, the seller may think I am inexperienced be because I told him I could sell it at that price. If your Doctor thought like that we’d have a lot more expiring people out there wouldn’t we? Make the recommendation, and be firm. By the way NAR says that if you have a property that has been shown 10 times and no offers, you guessed it, reduce the price, What if there are few showings and no offers? Right again.

Over the years I have withdrawn from many listings that I had taken when the sellers won’t take my advice, suggesting to them that they seek another Realtor who they may have more confidence in and who’s advice they’ll take. That is the right and ethical thing to do, not just sit there waiting for it to expire, which only hurts your reputation and keeps the poor sellers living in a fool’s paradise longer than they should.

One of the classes that we have at The Lyon Co. is a price reduction class held monthly which I teach. I am always amazed at how few show up to take this class, even though they have listings that need to be reduced. One of the training exercises we do is to actually call their sellers and discuss the price reduction with them over speakerphone. Sometimes they reduce, immediately, some actually wonder what took us so long to suggest it, some want to think about it, and some realize that they can’t compete in todays market and politely ask us to cancel their listing, which we promptly do, and that spells relief to the listing agent. Kind of like using Preparation H.

My recommendation for your first price reduction should be at the table when taking the listing, and if they are not reasonable walk away unless you are aware of a big reason for them to get motivated in the very near future. Just this past weekend I had a neighbor approach me when I was in the front yard about listing her home, it has been on the market for at least two years with a top competitor of mine, not once but twice, and once in between with another Realtor. I politely declined unless she was ready to get real.

On that Sunday evening at around 8:00 PM she knocked on my door, an example of why have avoided listing my neighbors for almost 18 years, anyway she wanted to talk about listing her home with me again. Using my best diplomacy, I once again told her that I could not help her at her price. I explained to her that she was asking me to hope that a fool of a Realtor would show the home to a fool of a buyer who would give her, her price, and then the lender would hire a fool of an appraiser, and the bank would be foolish enough in today’s market to fall for the whole thing, hmm you know what guys now that I think about it the bank was the best shot of finding the fool in the whole transaction. I declined anyway.

Monday at noon she shows up at my office asking if I had any international Realtors who could sell it to an Islander or a South American, it used to be that Florida sellers thought all the fools came from NY. I wonder if New Yorkers know what Floridians think of them when it comes to home buying? That thinking seems to be shifting to neighboring countries now. I guess that’s what we call living in a global market.

Anyway guys price it right up front and if you ere, get the reductions, or just walk away. In horse racing we used to have a saying, your first loss is usually you’re cheapest, that also applies to real estate.