It's "Economics 101" -- if a home is priced right, it will sell. The age old problem is that every almost seller tells you they want -- no, need -- more out of their home than what it's really worth. Most agents end up taking a listing at a price they know is a little high because they are fearful of losing the listing if they insist on a realistic price. So what do you do?

Well, first, having great name recognition and a strong personal image in the marketplace gives you a lot more leverage than the average agent. Also, little things like the quality of your marketing materials, your personal brochure and house flyers can add to your credibility as a professional and give you an advantage in the mind of the seller. This is why the highly visible agents seem to always be able to get listings at more realistic prices.

Next, accept the fact that consumers would all like to get more than their home is worth, and that they look at price emotionally, not rationally. That is why even the most logical presentations on correctly pricing a home do not work. Don't get me wrong: I believe that you must be able to present a logical explanation for the prices you suggest, but that is not enough to insure that you will get the listing at the right price.

I believe you must learn to deal with price head-on. So many agents beat around the bush and leave the price to the end, or try to avoid it altogether. It is more effective to operate from a position of strength. You are the one that must bring up the subject of price. As an agent I always want to get the price on the table quickly, so people can get used to considering a price lower than they were thinking.

Early in the listing presentation I like to say something like, "Let's talk about the price that your home will sell for. According to the recently compiled sales, if you want to sell your home fast, it should be listed at $X." I will hand them a CMA and go over the comparable sales that justify my suggested price. The price I give is always a price I know will produce a fast sale. Some people will stop me and say that's not the price they were expecting, but most become quiet and let me do a quick review of the comps.

Then I sit back and say, "It looks like you were expecting a higher price. Let me explain a little bit. Price and time are inversely related. The higher the price, the longer a home takes to sell, the lower the price the faster it sells. As the sellers you have to tell me what combination of price and time will best help you achieve your goals. The price I gave you is a price that I know, in conjunction with my marketing efforts, has a good chance of selling your home within 30 days."

"Tell me, John & Mary, did you have a price and time frame in mind for selling your home?" Most sellers now tell me, "We were hoping for $X." I look at them and say, "That's great! How long do you think is a realistic time frame to get your home sold at that price?" At which point sellers say something like, "Well, it might take a long time, I don't really know." Look at them and say, "John and Mary, if you are willing to give me a year-long listing, I believe that I can get you what you want. Then say, "John and Mary, as a real estate professional my job is to market your home effectively, negotiate on your behalf when an offer comes in, and then follow up with all the paperwork to get it closed. As sellers you have to tell me what price you are willing to accept. I can give you some guidelines about what is going on in the marketplace, but you have to decide on the combination of time and price that you are willing to accept."

I then go on and finish my listing presentation. At the end I ask them, "If I had an offer for your home right now, what price would you take?" If the price they give me is within reason I say, "I think that's a little on the high side, but I am willing to gamble my time and money that I can get you that price if you give me a X day listing." I write up the listing and have them sign it. After they have signed the contract, I say, "John and Mary, I am going to go to work for you, I am going to spend my time and money working to get you your price. If at any point during the listing you feel like I am doing a good job marketing your home, and it is not getting the number of showings that are needed to get it sold, I would appreciate it if you would call me up and ask me to reduce the price of your home."

Now I go to work letting my clients know everything that I am doing for them. I call them once a week and follow my listing service plan that gives the seller the feeling I am earning every dollar of my commission. Four to six weeks later if the clients have not called me to reduce the price I just call and ask, "John and Mary, do you feel like I have been doing a good job on your behalf?" They always say "Yes." Then I ask, "Have you thought about reducing your price?" Eighty percent of the time, I get a price reduction and do it in a way that makes the seller feel good about the process.

Best of all, I enjoy the process and feel that I am helping my clients get a fair price in a reasonable period of time.

Published: November 28, 2003

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Co-founder of Hobbs/Herder Advertising and Hobbs/Herder Training, Greg Herder is recognized as the real estate industry's foremost authority on residential real estate marketing and agent productivity training. Herder is also a licensed Certified Residential Broker (CRB) and owner of MegaAgent Realty, and co-owner of JDG investments, a real estate investment company. Herder is a featured columnist on real estate marketing and training issues for Realty Times, Real Estate Executive Magazine, Savvy Executive Profiles, and, as well as a contributor to a variety of other industry publications, including Realtor® Magazine and Real Estate Business Magazine. He also authored the innovative how-to book “Satisfaction Guaranteed - 100% Satisfaction Guaranteed or Your Money Back," which ushered this unique concept into the world of real estate service. Greg has conducted over 1500 one, two or three day seminars over the past 17 years for the real estate industry and is a professional member of the National Speakers Association (NSA). He graduated cum laude from California State University with a BA in psychology and is currently working on getting his PhD in Organization Behavior.