Lots on interesting input here ... here is my opinion â€¦
To effectively sell, you need to be mindful of the 4 Pâ€™s: Price, Preparation, Presentation and Promotion â€“ your seller needs to be educated about these from the very first meeting you have with them.
Unfortunately, as we all know, educating and learning are two different things altogether.
There are a thousand axioms out there that illustrate this â€“ â€œyou can lead a horse to water BUT â€¦â€ (you know the rest). You can educate a seller, BUT, when the day is done, they are going to do what they feel or believe is the best thing for them to do. Their belief system dictates their actions and there is no way some sellers will align their systems with yours no matter how hard you try.
Some sellers really have to learn the hard way. Question is, as a REALTORÂ®, are you willing to be part of their education process, or do you want to get in, get a sale and get on to the next one? Iâ€™ve found that if you are patient and in it for the long haul, it is possible for sellers to come around. And for them to be grateful that you stuck with them and gave it your best shot.
It is easier if you are a full service REALTORÂ® who understands the 4 Pâ€™s.
Iâ€™ve often sat through listing appointments with unrealistic sellers. They have their own idea of price and no amount of reasoning or common sense is going to get them to deviate from their price. I am honest with these folks up front and tell them that I do not believe they will get their price. Then, on the other hand, I assure them that we will give it our best shot. I explain that their chances of getting top dollar are better with a full-service REALTORÂ® than with someone who only provides basic service. In other words, I explain that their best chance of getting their price (no guarantees here) will be with us. We then provide the absolute best:
(1) Preparation: we make sure their property is prepared better than others currently on the market â€“ this includes making suitable repairs and upgrades, providing inspection reports upfront and so on;
(2) Presentation: we stage their homes at our expense, bring in a professional photographer and present the property in the best light possible;
(3) Promotion: in our case, we guarantee that our marketing is the absolute best available and we actually stack our written marketing plan up against anyone elseâ€™s in the area.
If, after all of this, the property is not receiving offers, then we can confidently and with integrity go back to the seller and address the last P â€¦
In other words, we make sure weâ€™ve done absolutely everything WE can do by providing the absolute best service possible so the seller cannot say weâ€™ve left any thing undone â€¦ AND weâ€™ve mentioned that even IF someone gives them their price it probably wonâ€™t appraise â€¦
And then we let the market do the teaching from there.
Here are a few posts that may be helpful:
Top 15 Things A Listing Agent Wonâ€™t Tell Sellers â€¦ (But REALLY Should â€¦)
When Does A Home For Sale Resemble A Snow Ball In Orbit Around The Sun?
Testing The Market NOT A Good Idea: Top 4 Reasons Explained
I too liked Carl's answer, (which is great from the comsumer aspect) however here is another perspective from the Agent's side)
All Listings are fundamentally a business decision. You are in business to do what? Make money. Since you can only get paid when the Seller does (at closing) you MUST weigh the costs of carrying that Listing as part of your overall business plan.
Too often Agents will take overpriced listings. In doing so, they are performing a disservice to both their customers as well as themselves and Brokerage as these overpriced listings have little to no chance of becoming a closed transaction. Harming their reputation in the process.
When a Listing fails to sell who will a Seller blame? THEIR AGENT.
Therefore, if you are presenting the facts, comparables, and marketing plan to achieve the goal of getting the home sold and the seller is resistant to accepting the research of proven prior sales, that you are placing before them, it is a wise decision to take the listing?
There is an expense attached to each and every listing usually the burden of the agent to bear. This includes your time. In addition to the preparation time, the marketing expense, and the carrying costs there is also the value of your reputation which has a value as well.
The FIRST negotiation you encounter is that with the prospective seller.
If you fail to be able to negotiate that successfully and concede to List the home at a value you know to be unrealistic, you have little to no chance of being able to get paid for the work you have performed. Is that a smart business decision?
As a Broker and coach I advise my agents to weigh out the carrying costs of every listing they present. What is in an Office's inventory is a reflection of that office.
While it has been said, that you must "List to Last" in this BUYER'S market, WHAT you list, will determine how LONG you last.
Think about that for just a moment.
What you list will determine how long you last.
Are you a Non-Profit organization? No.
Will you be compensated for your time, and expenses if the house fails to sell? No
Will the seller of an overpriced Listing recommend you to their friends?... No.
So the exponential damage of taking an overpriced Listing will not only cost you future referals from that customer, it will also inhibit future referrals from potential buyers.... because who's sign is on the front lawn? Yours.
Too often Brokerages get wrapped up-in the competition factor of obtaining listings and lose sight of their primary objective which is to get to closing. Determining the value of any business what is the one thing we look for? The net.
So the bottom line is going to determine whether or not your business is successful. Unsellable and unsold merchandise is not an asset.
In this Buyer's Market, selecting which homes go into your "store's" inventory is much more important that stocking the inventory with products that no one will want.
Do not be afraid to gently and diplomatically decline a listing with an unrealistic seller. If done correctly, you will not only preserve your "Value" as a Real Estate Professional, you will earn their respect and their future referals as a "knowledgable area expert" at a later time and usually after the listing expires if taken by an agent willing to tell them what they "wanted to hear" instead of what they needed to know.
That is Reality vs. Realty 101
The wishes of the seller factor in, of couse, too. Some sellers just can't sleep at night unless they have a chance to 'try" their number - and we have to be sensitive to that ....... I am not always so sure it isn't worth the try at a slightly higher, but still reasonable number to give the seller that peace of mind - it
s a fine line to walk............ it reallydepends on just how far into, or out of, that "gray" area the seller wants to go.
But, here's the thing...after all that research, knowledge, experience, sharing of comps with actual visits and elaborate cma's.............we can still get it wrong once in a while, and along comes a buyer who pays more than we thought someone would...........of course, conversely, we can think we priced it right on the mark, and it winds upselling for less.
So...........We can try to guide people, but we can't dictate....we can always walk away, though.
Kind of a rollerocaster ride - especially these days.
Ultimately of course, it is the market that will decide the price of this home, and the sellers, if they truly want to sell, will have to "listen" or essentially buy their home back at the inflated price. You might try that tact, it is a little strong, but I've used it before to drive home the realty...."congratulations, you just bought your home back for $XXX. It certainly makes for great food for thought when a seller resists a market listing price or a market offer price.
I also think it very powerful to show your seller the perils of overpricing - the portfolio of every brokerage, in every region has one case after another that demonstrates the overpriced homes that take the long path through numerous price reductions to reach their strike price ultimately fetch less NOT more than the sellers who price wisely out of the gate.
Good luck to you.
Unwavering Commitment to Service
Actually seeing their competition and having them see properties as buyers are seeing them can be a great reality check.
They will have the final say on price.
I had one guy in particular, he was so stubborn he alomost had me in tears. After about 45 days on the market at" HIS" price, several showings but no offers. I informed him that he was a great neighbor, because he had priced his home too high he was helping others in the community sale their homes.
Once I was able to show him other home in his neighborhood, that were homes price right, listed after he had listed where already in escrow, he changed his tune.
Best of luck to you!
Kawain Payne, Realtor
Kawain Payne, Realtor
I think this a great question! I know that a lot of real estat agents struggle with this all the time.
Your presentation and delivery has a lot to do with the proposed listing price. Asking them questions to get clues of their motivation is a very important process.
The first thing I like to ask my sellers in a listing presentataion is:
"How soon do you need to sell"?
"Why are you selling"?
"Do you need to sell"?
"What is your current situation"?
These questions are amo for when you propose the listing price.
Obviously you will show them the comparables around the area, but most importanly share with them the foreclosure activity in the area, and how it is affecting price values.
Shared with them statistics that Todays market is the best to sell: Low interest rates for buyers and there will be many potential buyers in the market.
Present them your strategic plan:
Normally, this is the part where i can get most of my sellers to agree with me amd trust my propose selling.
I tell them that my job is to expose this house to as many potential buyers as I can. Bringing lots of traffic is key to find a buyer who can fall in love with the property.
Price needs to be set competitive and agressive compared to the market in order to do this. Once we are priced correctly we start seeing offers coming in. If we are position correctly sometimes we can get multiple offers and have the buyers drive up the price a little more. At that point you are able to see the type of offer you are getting.
Again! My goal is to find the buyer that will fall in love with your property, it is then when a buyer's decision is based on what he wants not on price.
OBJECTIVE REAL ESTATE
6399 WILSHIRE BLVD SUITE 908
LOS ANGELES, CA, 90048
I feel that it's best to find out upfront what is really going on with this sale.
Is this a necessity? - If it's a true need, then I'd find out more as to how soon they need to sell and qualify them on their net proceeds from sale. That's when you might find out it's an estate, divorce or a short sale situation (before you spend your marketing dollars, time and effort marketing an overpriced property). Each type of situation will require a different approach to your presentation and the marketing proposal. You got to be ready for all situation types.
You got to get your sellers to the place of being truthful with you. If they don't know you, and you weren't referred, they won't trust you right away. Bring other credible sources (articles, blogs etc. - especially those written for consumers' education) to explain the "stale listing", "traffic", "agressive marketing", average days on the market in proportion to the sold to asking ratio, local area solds, asking and pendings graphs showing the current values trend etc...
I like the idea someone mentioned here - of asking the sellers of how they arrived at their "stubborn" figure. Prepare to be surpirsed by the seller's answers. Keep on educating. Showing other properties on the market is yet another great idea.
If the sellers are still don't see it your way, you got to decide if you want this listing.
Yes, it hurts to see sellers making a mistake and loosing as the result of it.
But, it's their right to make this mistake (and it's their property). The sellers will respect you as a professional later on, if you proove to be right, and if and when you take the listing on.
In an overpriced listing, work on teaming up with the sellers to fix the problems before the inspection (no reduction there), stage the property and declutter, and market otherwise like crazy. I've seen people buying overpriced listings and even overpaying for the overpriced properties, because of how showcased the properties were...
You can also have the seller hire an appraiser to do the formal appraisal from the buyer's point of view (comps to get the mortgage).
To get to the correct pricing, send the showings' reports weekly, and CMA's for each price reduction...as well as market place updates. This shows that you did your part - so the adjustment of asking price is needed due to circumstances beyond your control.
Best of luck with this seller!
Beachfront Realty, Inc.
Well there isn't actually that much you can do besides give your professional and statistical opinions. It's up to the seller to price the home to sell. Is it possible the seller really does not want to sell the house? No one will buy a house for one price, if they can get an equal house for 50,000 to 100,000 less in the same neighborhood!
Now it's up to you to make a few decisions about going forward or not.
Look at market trends in our area (we talked about that) and ask yourself the question if values are going to continue to decline because of this upcoming glut of inventory (in our area for those of you out of state). If the listing is overpriced now, what will it be in 3 to 6 months?
Like Mack said, do you want to deal with that?
You'd be wasting your time and theirs to take the listing otherwise knowing that their listing most likely will rot on the market until they get a clue.
As agents, we all have encountered the seller who feels their home is worth more than the comparatives suggest. I would suggest that even though they want to list at a certain price, they need to know that the Appraiser is going to use the same comps that you have shown them. I made the mistake several years ago taking a listing that the seller wanted a higher price than what I suggested. This was back in December of 2006 and the sellers just recently lost the house through foreclosure after going through 3 other agents while chasing the market down..in 2010..over 3 years on the market!!! You can have them sign, as one agent suggested, a price change timeline depending on the showings, but would not let it go beyond a month..should be weekly as this is the most important time when a new listing comes on the market. It all boils down to their motivation. A motivated seller is more open to listening to your professional advice to get get their house sold. If they insist on not signing the timeline, or want to stay at the higher list price, I would nicely tell them thank you for giving you the opportunity to list their home, but no thanks. All the best!
Cindy Westfall, GRI
Prudential NW Properties
5 Centerpointe Dr., Ste, 150
Lake Oswego, OR 97035
As for my signature, here in California We have requirements mandated by the state of California Department of Real Estate. I use to have the designations as it was a part of my signature. In keeping with Trulia guidelines and DRE guidelines that has become my signature for Trulia.
As for Cameron and dealing with the frustration of being hired and that gut feeling of someone who is stubborn I agree we all run into it often.
I am often amused when a buyer says they have to have list
4 bedroom, 3 bath, family room, single family home, etc
and then I get a call out of the blue that they saw a 2 Bedroom 1 1/2 bath condo that they want to put an offer on.
While it may drive us all a bit crazy, I also remind myself how people buy automobiles on a car lot.
They came to see a mini van and end up buying a some sporty model, while I am still negotiating on the car I came in for.
I have also found 9 out of 10 sellers who list their home already know what price they want to list it at and have researched it in their mind thoroughly.
I guess the best question to ask the sellers would be,
Can I ask why you believe your house is worth this price as opposed to this price?
The last time I asked a question like that I found the seller wanted to sell and needed to sell but was upside down and simply did not understand that a short sale was very possible. The seller was just trying to anything to sell the home to get the lender of their back.
Harold Sharpe - Broker
So Cal Homes Realty
California Department of Real Estate License # 01312992
With patience......a great deal of patience.
Real estate is one of the few professions where we are called in for our "expert" opinion..........and then the seller tells us why we are wrong, and they are right as far as the pricing goes!
Selling is an emotional process...............sometimes there is nothing you can do to convince someone their idea of price is off...way off...........I have taken sellers out to see other homes...........talked till I was blue in the face, but nothing convinces them their pricing is too high.
So..what to do?...........I politely, but firmly tell them that it is against my advice and better judgement to list at the price they have in mind. I tell them that several times.....wanting to go on record. I tell them that ultimately, the choice is theirs. I then try to get an agreement to lower the price after a relatively short period of time.
If they are really in the stratosphere with their number, I will walk away. Otherwise, ti will just be a frustrating situation for all involved.
What you don't want to do, however, is paint them in a corner, and not give them a graceful way out...you never want them to think you're thinking.."See, I told you so"! It's a fine line between telling a seller they are wrong in their thinking, yet still being supportive and on their side!
I agree with what you are saying.
Yes, we work for the seller.
Perhaps the question was worded a little..... crudely.
However, I think every agent who has had a listing in the last several years can relate to this question. We have all felt the frustration of dealing with people who, because they refuse to take the advise they are paying for, end up hurting themselves in the long run.
It is so tough for so many sellers these days and it is beyond frustrating to see people lose money, unnecessarily, because they can't accept the reality of the market and their house languishes on the market while prices continue to decline.
I absolutely sympathize with the sellers in this situation but when you are hired to sell a home and they refuse to listen to what needs to be done to sell it, it can be beyond frustrating, especially when you know it is going to cost them even more in the long run.
I don't think Cameron has lost track of what his job is. I think he is just expressing the frustration we have all felt of not being able to convince the people who hire us to do what is in their own best interest.
By the way, I would respectfully suggest leaving your contact information( including your license # which is slight overkill IMO), on your profile page.
Is it your property to sell?
Are you the boss?
It is your job should you choose to work with these sellers to suggest aid and help the sellers.
It is not your job to make the decisions.
If you feel they are making a mistake perhaps you can take them through competitive listings in the area to aid to help them make a good decision.
You can also list the home as they wish at the price they ask you to and let them see how that works out.
You can also walk away and leave them in the hands of others to who might be able to assist them.
I don't want this to come out the wrong way I want you to put this into perspective and realize you work for them.
Perhaps a different mindset is in order.
Harold Sharpe - Broker
So Cal Homes Realty
California Department of Real Estate License # 01312992
Reading you question I believe you have lost track of who you are and your job.
After 3 years of an extremely tough market in Northern Virginia, most sellers have figured it out. I take my sellers out to preview solds and available properties if they question my advise. Let them see for themselves what you and I see everyday.
Eventually the market will dictate the price. Hang in there!!
Best of luck! -Pat
Why don't you take them to view some comps in the area. Let them guess how much the house is worth and then see how close they are. At least they will see that you are guiding them in the right direction. Some that have been on the market for a while and some that have sold quickly.
Here is what i suggest as it is not our job as a realtor to tell sellers what they should sell their home for, simply to advise them as to what comparable homes have sold for in their area. If they do not want to list at the price you suggested, tell them that is ok, you will list at the price they want and get it in writing that if you market the home as you say you will and if little or no activity persists over the 30-60 timeframe that they will agree to lower the price to the suggested price. If they are unwilling to put this in writing, I would not take the listing and politely and professionally tell them that they may be suited to list their home with someone else. What should happen if you do this properly is they will call you in 90 days when it does not work out with the other agent. I hope this helps
I think that is a great suggestion. However, I have done that and I always get the same feedback. Well, but.....my house this and their house that....................
The old saying that "beauty is in the eye of the beholder" or perhaps "love is blind" definitely "fits the bill".
That said, it's certainly worth a try.
I hope that helps.
That said, sometimes buyers are a little too high, in that case I offer to list at the price they think it should sell for as long as they are open to reducing the price within several weeks if there is no activity. This is, of course, after everything else is complete such as staging, cleaning, declutering etc. If they agree, I put it right in the contract so that there is no misunderstanding at a later date.
99.99% of the time, we end up reducing the price several times before we get activity, but that's okay with me because it satisfies the seller.
On a side note, I once had a friend who needed to get a certain price for her home. We all knew it was a long shot and it was overpriced by about $13,000. However, she got very close to asking price and we all called it nothing short of a miracle.
Hope that helped.
If a seller does not agree with the listing price that you have come up with based on accurate closed sales in the last 3-4 months then use then you have a choice to make, either you take the listing overpriced, or you don't take the listing at all. There are plenty of agents out there that will take the over priced listing just to have a sign in the yard to get calls on and then go sell the potential buyers other homes when they realize the one they called on is overpriced. You can tell your seller that as well.
Also you can ask the seller "What specifically causes you to believe that your home is worth $XXX more than all these others that have recently sold?" They will give you an answer then you can handle the real objection.
If you want more advice or need more objection handlers feel free to email me direct. I have many and I am happy to share.