Remember those words of Floyd Wickman? Even in these times of short days on market, highest and best auctions, and multiple offers, not all of the listings are selling; and not all of the markets are robust.
When your focus is on building a listing inventory, servicing the ones you already have can take a back seat to building, and we end up with listings that aren't selling.
If anything costs us money, time, energy, image, reputation and morale, it is unsold listings - crying out for a price reduction.
In the program, Floyd teaches us the "two forms" method of obtaining price reductions. In some ways, that particular method works best for listings we would rather not have if they won't reduce. Call it a "reduce or release" campaign.
Here are a few reminders about other ways to get price reductions that may help those who have unsold listings.
1. At the time of listing, whether it is priced right or not, remember that the market has become a moving target. Nothing is a sure thing anymore, so before you leave, always ask, "How much time are you willing to let go by without getting an offer before we adjust the price?" Let them set the timetable and they will cooperate more. Take out the Marketability Checklist and point out item 16. Post-dated price reduction. Take out a price reduction form, negotiate the amounts and times for automatic reductions, and get it in writing. The Agent/Broker Disclosure form also has a line for "Recommended action" for getting automatic and graduated price reductions.
2. If they suggest an unworkable timetable, use your hesitation handling track, with the right facial expression and voice inflection, "You probably have a good reason for suggesting we wait three months before adjusting the price. Do you mind if I ask what it is?"
Explain how critical the early weeks of exposure are to marketing. Explain how stale bread on the shelves is always discounted. Update your Trends Analysis to show how prices decline with time on market.
3. If you already have the listing and it isn't selling, update the Sellers on all showings and feedback, but more importantly, update the Sellers when there aren't showings. Use a lack of showings to suggest a CITO. Floyd says, "Negotiate money face-to-face whenever possible," and "Choose your ground when negotiating." You are in more control in the office.
Well, folks, another week has gone by without a showing on your home. Let's get together and revisit our marketing strategy. Why don't you come into the office and I can show you what's been happening. We can put our heads together and decide the best course of action to get you sold and moved, fair enough?
4. Sometimes a price reduction isn't the best way to stimulate showings and offers. Chances are only about 7% that you are going to sell that listing yourself. Which means 93% of the time it is a co-broke or colleague who will bring the buyer. A commission increase will incentivize more co-brokes and colleagues to revisit your unsold listing, and show it to their buyers.
CITO the Sellers and take out the Estimate of Net. A 1% commission increase will reduce their estimated net by 1% of the total price. For example, on a $300,000 sale with an originally estimated net of $98,000 – a 1% commission increase will reduce that estimated net by $3000 to $95,000.
Mr. and Mrs. Seller, chances are 93% of the time a colleague of mine is going to bring the buyer and sell your house. If you still want to sell, there's a way we can get their attention and get them really excited about talking to their buyers and showing your house. Let me ask you, if the best you could do was to net $95,000, but it got your home sold and got you moved – I'm not asking would you be thrilled, but if it was the best you could do, would you take it?
A $5000 or $10,000 price reduction is sometimes nothing more than blip on the radar. But a $3000 increase in commission is a great attention getter.