Q&A MEMBERS CALL: How to Discuss Pricing Strategy with Sellers

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Transcript:

Part of the seller phone consultation is asking, "Are you going to a meeting with other agents?" and if they say yes, asking them what the timeframe is and when they expect to make a decision.

You can decide if you want to be first or last and if it’s worth you being involved in any of that. You’re going to have leave behinds, and hopefully those brownies will hit to give you some additional likeability.

Equity Evaluation

But the only thing we would do is go through, what we say and what I coach my listing partners to say is, when the time is right we go through, we leave an old equity evaluation with them. So let me leave, what I can do is go through some comps.

We have to price the home as we list it, because I don’t know what’s going to happen between now and then. So I can go through some general comps. I wouldn’t show them the punch line. Don’t show them the overview page, because you don’t want them to see the numbers on that page yet.

But you can go through some comps. And say, we do a way more extensive analysis when we actually come up with a pricing strategy. And there are different strategies. And I always talk pricing strategy. And I coach my listing partners to talk pricing strategy.

Because, I will caution you Mr. and Mrs. Seller, some agents will come in here and they won’t talk about a pricing strategy. They’ll give you a high price but not tell you that it’s going to take multiple price reductions and 6-9 months on market to get you a price that you could get in 30-45 days. And that’s where that scatter price analysis Clarus metrics page is critical.

We leave that packet with them, and I would leave that page open. And say "Listen, I’ve just got to caution you. A lot of agents are going to come in here and try to buy the listing with a high price. So I’ll tell you right now, I’ll be open with you on my recommendations on pricing. When it gets to that point we can go through the comps generally speaking. You can see there’s a smaller comp that sold for less than you want. You can see that there’s a bigger, maybe a nicer comp that sold for more."

Leading Them to the Decision

That’s why as part of that phone consultation, we ask them what they think their home is worth. So we know a lot going into the appointment. You want to make sure you don’t lose it by giving them a low price. Your price is going to be lower than other agents.

So there is a little bit of dancing with them a little bit there to make sure you don’t ruin the rapport by saying, "I’m not going to leave my equity evaluation with you. I’ll leave you an example of what we do, and I’ll go through some comps. And then when we decide that we’re definitely going to work together, we’re going to get you the most aggressive pricing strategy to make sure you get top dollar on this property.

"Make no mistake, my job is not to convince you to commit to a lower price than your property is worth. It’s to get you absolute top dollar for your property. But a lot of times an agent that isn’t very strong on knowing the market and helping with a pricing strategy, they’ll just, the only thing they have is to overprice a listing."

And then the data shows - this is past data. It doesn’t include an opinion in that Clarus Market Metrics report. This shows you that people who overpriced stayed on the market for 3x as long. And they have two price reductions.

So the data really helps. When you pull all that together, it’s a slam dunk.