So what happens when you make a pricing mistake?

The stark reality is that even with the consultative approach to setting the right asking price you and the seller can easily still make a pricing error. This is why it is so important to plant some early pricing seeds.

Think of these seeds as concepts or ideas that you plant with the seller during your first listing appointment. If for some reason the listing fails to sell you will have planted these ideas early enough with the seller that it will be far easier to re-position to the listing to sell if needed. Let's look at the first seed:

Price versus Time

Sellers are almost always motivated by one of two main issues. They either want to secure the highest price possible on their home regardless of how long it will take, or they want to sell their home within a set time frame.

Top producers have learned that it is imperative to help sellers thoroughly understand the difference between these two key motivations. This can be especially critical later during the listing period if the home has failed to secure an offer. Let's take a look at how one top producer might tackle this issue during the listing presentation:

One item to consider when pricing your home is timing. As they say timing is everything and that is true in real estate.

In general the higher the price of your home the longer it will take to sell. The more competitive the price the faster your home will sell.

What do you feel is your highest priority -- selling quickly or selling for a higher price?

You might ask, "Why is this discussion so important?"

Fast forward two months from the date of the listing. The home has received very little activity and the sellers are becoming frustrated. Today is your day to follow up with all of your clients and you need to talk with the seller about the lack of activity. Let's look at how you might follow up your earlier price vs. time discussion.

Follow Up:

You know when I took the listing I asked you a very important question. I asked you what was more important to you -- selling quickly or selling for a higher price?

At this point we can continue to try and find a buyer at the listing price we started at, which may take even longer, or we could make a price adjustment so that you can secure a buyer faster. Which would you prefer?

This approach shifts the responsibility of securing a buyer back to where it should be -- the seller's shoulders. The seller decides how long they are willing to hold out for top dollar, and when they are ready to make a price adjustment. Sellers need to realize that the more competitively the home is priced the better their odds of finding a willing, able, and ready buyer.

Set the Stage for Price Adjustments

When taking a listing many top producers use the price adjustment letter technique. This ensures that should a new listing not sell quickly the seller will have multiple opportunities to adjust the price if need be to a more competitive price.

The key to this strategy is to explain to sellers during your initial consultation that as a normal part of your sales process your team mails out a price adjustment letter every thirty days to any listing in your inventory that has not yet received an offer.

Let's take a look at a superstar sample letter:

Mr. and Mrs.
123 Any Street
Any town, Any City, Zip

Dear ,

As a service to my sellers I provide a monthly opportunity to consider a price adjustment. Price is the number one reason why homes sell in any market, and it's my firm commitment to help you sell your home for top dollar.

If you think now may be the right time to make an adjustment in your price strategy please fill out the enclosed form and mail it back to my office. Rest assured we will immediately market your new adjusted price aggressively through every medium available to our firm.

If you would like to talk to me personally about this important issue please call me at your earliest convenience.

Warmest Regards,

Jim Remley
Broker

Can you see the power in using this technique? Every month you will be planting a seed, an ongoing reminder, that price is the number one reason why homes don't sell in any market. Also notice the key words price adjustment as opposed to price reduction.

A price reduction suggests that the seller is coming down from a price that they actually may have received if they had just hung in there long enough. But nothing could be further from the truth. It could take years for the market to catch up with an overpriced listing. By using the words price adjustment you can ease the seller's resistance to lowering the price, and help position the listing to actually sell.

Let's look at how superstar Sally set's up the price adjustment letter technique during her initial conversation with the seller:

Listen, I want to really thank you for this listing I'm very excited to begin marketing the property. I want to take just a couple of minutes and talk about the follow up process. Would that be okay?

One of the things that my team does is to mail out a price adjustment letter every thirty days to all of our listings that have not yet received an offer. I don't want you to be offended by this we do it with every seller.

You can do one of a few things with the letter. Of course you can throw it away, or you can save it just in case you might want to use it in the future, or you can just fill in the price adjustment and mail it back in. If you do adjust your price let me tell you what will happen then.

Notice the last line in this sample discussion is to offer to explain to what will happen if the seller does decide to adjust their price. Top producers have a pre-built marketing plan that they can immediately implement should a seller decide to adjust their price during the listing period. This added incentive may motivate sellers to make price adjustments, especially if they have had very little activity on their home or even no activity.

This brings us to our last early seed -- Setting the Stage for No Showings.

Setting the Stage for No Showings

Imagine that you are a seller who has been dazzled by a top producing real estate agent. You were so impressed that you immediately signed a listing agreement with the agent. Over the next couple of weeks the agent does everything he tells you he was going to do: A sign is placed in your lawn, flyers are distributed, a group of agents tour your home, and you even see your home in the local paper twice! But one thing bothers you, you have had no showings. Zero! Nada! Zip!

As the seller who do you blame for this lack of activity?

Once again the target is placed squarely on the back of the listing agent. Even though we often work like dogs to market a listing, the truth is no amount of marketing will sell an overpriced listing.

This is why it is absolutely critical that you set the stage for the possibility of no showings, and more importantly you explain to a seller what can be done to fix the problem. How? Let's take a look at one top producer strategy:

Occasionally what can happen when we begin to market a listing is that your home will receive no showings. What this means is that buyers are rejecting the price.

Buyers can see your home on-line, in newspapers, and in the local real estate guides, but if they aren't interested enough to take the next step and see the home in person your listing will never sell.

So if we receive no showings or a very small amount of showings it may be a wise decision to consider a price adjustment.

Now let's revert back to being the seller for a moment. If the listing agent had taken the time to use the no showing discussion with you when they took the listing how would your feelings change about a lack of showings? More than likely you at least would consider the possibility that lowering the price would trigger more activity.

By planting early seeds with the seller you can help your client to accomplish the goal of selling their home, and you can accomplish your goal of having a new satisfied client.

Published: October 12, 2005

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Jim Remley is a speaker, author, and consultant. He is also an active real estate broker in Southern Oregon where he owns a network of six offices. Jim won the Rookie Instructor of the Year award in 2001 from Realty-U, the largest network of real estate educators in the nation. He was the winner of the 2002 Pacesetter Award, and nominated for the Real Estate Instructor of the Year Award during the first quarter of 2003. To learn more about Jim, please visit ProPerformer.com or e-mail him at .