From Listed to SOLD - How to Sell Those Listings You Work So Hard to Get!

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READ THIS Before Your Next Price Reduction Recommendation!

Why?

I have a friend who listed her house with one of the top agents in her area. They went on the market about two months ago, at the exact price the agent recommended and supported with his market analysis. Showings were brisk at first, then trickled off, as typically happens. Feedback has been generally positive, although the home is rather unique and simply not practical for many buyers, and the feedback has reflected that.

A few weeks ago, out of the blue, the agent recommended a $50,000 price reduction. This caught my seller friend by surprise since the feedback she'd received never mentioned that pricing was an issue; most of the negative feedback centered on the unique features of the home that made it "not work" for the buyer. But no one, to her knowledge, had mentioned price as an obstacle. My friend asked the agent for an explanation of his recommendation, but no explanation cometh, the agent simply reiterated his recommendation that she reduce her price.

My friend came to me for advice. I suggested she ask him the following questions as to the WHY of his recommendation:

  1. Has there been consistent feedback that we are overpriced? (If so, it has not been shared with us.) 
  2. How is the overall market right now? Is anything in our price range selling? Is the market typically slower this time of year?
  3. If the market is not interested in our home at the current price, would your recommended price reduction change that? 
  4. Will reducing the price by $50,000 overcome buyer's objections to the unique character of the home, or will buyers still expect a more traditional home?
  5. Are homes in your recommended price range getting more activity than homes in our current range?

and the kicker...

6. Has the market changed significantly since you recommended the price we listed at? 

My friend is not categorically opposed to reducing her price if that's the right answer, or to withdraw the home from the market and wait for a better time to sell. But she wants (and deserves) information. A coherent explanation. Some evidence that her agent (who is supposed to be looking out for her best interests) put a little effort and thought into her situation -- and his recommendation.

Contrary to what we like to believe, our sellers are not stupid and they aren't unreasonably stubborn. But when we recommend a list price, back it up with data, and then, like clockwork, push for a reduction to that price six weeks later without explanation or exploration of other solutions, home-sellers have every right to be frustrated with us and to question our credibility. To doubt our commitment to their best interests. Or perhaps, to reach the conclusion that we're just lazy.

(My friend is thinking all these things about her agent and I can't blame her).

The moral of the story... before you recommend a price reduction, make sure you have answers to all the questions YOU would ask if it were YOUR home on the market and your agent advised you to give up a chunk of your equity. DO your homework, not just to pacify the seller, but also to determine if, indeed, a price reduction is the right solution. Maybe it is, maybe it's not. But be a PROFESSIONAL real estate agent and find out.

Oh, and it wouldn't hurt to price it right in the first place.

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Comment balloon 173 commentsJennifer Allan-Hagedorn • October 21 2011 08:22AM

Comments

Great post.....the agent should of had comps to warrant a price reduction...and not just suggest this huge price reduction with no backup info.

Posted by Lori Gardiner, GRI, SRS, ABR, e-PRO (RE/MAX River's Edge) about 8 years ago

Hi Jennifer.  Could those "unique features" of the house be re-addresed by a good stager who might be able to make the space more usable? Good post, there are lots of unprofessional Realtors whose first response is cut the price rather than thinking a little outside of the box.

Posted by Joanna Cohlan, Designing, Decorating & Staging Westchester Homes (Fresh Eyes For Your Home) about 8 years ago

This is such a good article Jennifer.  Price changes should only be recommended if you first when on the market overpriced or the market is declining and one needs to keep pace.  Listings are taking a heck of a lot longer to sell in a lot of areas and price reductions aren't going to change that.  

I mean, as I have said before, you can bottom out the pricing and sell your home, but is that the goal or the right thing to do?  This home will probably take a unique buyer and stay on the market longer, but if the price is right, it should stay there :)!  

Posted by Brenda Mullen, Your San Antonio TX Real Estate Agent!! (RE/MAX Access) about 8 years ago

Joanna - The home is staged (and shows beautifully). The issue one of style - the architecture is more contemporary in a land of colonials. So for a family looking for a family-friendly home, this isn't it. I had a home like that once - my own - and it was a tough sell because as gorgeous and unique as it was, it simply didn't work for families. Interestingly, I eventually RAISED the price $100,000 as an experiment and it sold right away!

Lori - I know, I know. Sometimes my industry embarrasses me.

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Jennifer, your advice to your seller friend should be a wake-up call to all agents who work with ANY client - they deserve information, expertise and guidance - not just lazy fall backs. Great post!

Posted by Mollie Wasserman (Your Move Made Simple) about 8 years ago

Brenda - EXACTLY.

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Mollie - Oh, yeah! In fact, I ran this blog by my friend before posting to make sure she was okay with my telling her story and she said yes (obviously), hoping that it might help someone else! WAKE UP AGENTS! Our clients deserve BETTER!!!

 

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

When I approach any client about a price reduction I go in with the numbers to support my recommendation.  I have never really gotten a lot of questions because I lay it all out up front.

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) about 8 years ago

Great post Jennifer.  Any price adjustements should be supported with current market conditions.  I think the agent want's to under price the home just to get it sold. 

Posted by Delores Campbell, Your St. Louis Real Estate Resource (Keller Williams Realty - Chesterfield) about 8 years ago

Price reductions should always be accompanied by a stack of comps and a summary of other homes in the competing market area which would be acceptible alternatives to theirs. If making a huge price adjustment, on properties where comps are few, getting an appraisal from a local company can help answer the question and get the home re-marketed properly. Staging the home may  be a better investment than a price drop.

Posted by Daniel H. Fisher, MCRP - Charlotte Real Estate, NC or SC (www.FisherHermanRealty.com (704) 617-3544) about 8 years ago

Thank you Jennifer.  Well said and so on point! 
When I recommend a price adjustment, I'm doing so with all my information in hand...feedback from showings, a new and detailed market evaluation and everything I did the first time I went in with my price recommendation. 
If there is a change in the market, I provide the seller with all the supporting documentation to support my recommendation so they can make the most educated decision about their situation. 
It's not brain surgery people...but it is most people's most valuable asset.  We have an obligation to treat it with that amount of importance and priority. 
Thanks again for sharing.

Posted by Carole Helwig about 8 years ago

I agree. You always need comps and true reasons why you need to drop the price. Maybe because the home is so unique and the buyer market is smaller than usual, she wants to drop to get a larger piece of the buyer market. However, the agent should always explain why the need for the price reduction!

Posted by Diane Grady (Endless Summer Realty) about 8 years ago

Daniel - I agree. And before I'd recommend a big price reduction like that (which would, frankly, embarrass me since I'm the one who put the original price on the house in the first place - did I really blow it that badly?), I'm going to explore OTHER options first which will likely cost a heck of a lot less than $50,000! This home happens to be staged already, but yeah, if it weren't, I'd sure be recommending THAT first!

Delores - the impression I'm getting is that the agent went all out to get the listing and once the sign was in the yard, lost interest. Looked up six weeks later and noticed it hadn't sold and said "Hey! Let's reduce the price!" Ugh.

Gary - That's how it ought to be done!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

And yes the market does change even in a short period of time. All it takes is 2-3 sellers with aggressive pricing (for whatever reason) and there goes the "market". We've all had situations where we thought we nailed the price then a few properties in the area sell for a lot less than expected and our CMA goes out the window! 

Posted by Karen Salmon, Okotoks Real Estate Agent (Royal LePage Benchmark) about 8 years ago

Karen - Yep, that happens. And if that's the case, I'm sure the seller will understand... but only if she's told!

Diane - Or, as in my case - raise the price! ;-]

Carole - SO well-put "It's not brain surgery people...but it is most people's most valuable asset.  We have an obligation to treat it with that amount of importance and priority."

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Jennifer, very well said. As a Realtor we need to support our reasoning to why some things needs to be done it can be price reduction to asking seller to negotiate an offer. 

Posted by Ritu Desai, Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949 (Samson Properties) about 8 years ago

One of the reasons I never make the decision for the initial positioning of the home in the market. But, whether it is at the beginning or a little later, as in this example, no discussion about changing the price (or position) of the home takes place without a THOROUGH conversation with the seller providing both data AND information that the client can use to make their decision. (by the way...you gave the seller some great questions that deserve to be answered)

Posted by Ken Brandon, Camp Lejeune, Jacksonville, NC (Coldwell Banker Sea Coast Advantage (Jacksonville, NC)) about 8 years ago

Excellent points, Jennifer. I've never felt that knee-jerk price reductions served the seller's interests in and of themselves. You have hit every mark in thinking this issue through and dealing with it rationally. Suggested.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) about 8 years ago

There seems to be a generalized belief that if a home hasn't sold in the first 30 days (normal sale), it's over-priced but sometimes the home IS unique and needs laser marketing and more time to find the buyer. 

Posted by Wendy Cutrufelli, Contra Costa Realtor (Alain Pinel Realtors) about 8 years ago

Jennifer, I am reminded of a story you told on one of your webinars. You said you had a listing, a 700 sf house to which the seller had added a fantastic sunroom making the home 1100 sf. As weeks went on, you had lots of showings but no offers, so you and your seller sat down to figure it out.

  You simply changed the square footage in the MLS from 1100 to 700 and the house sold in a short time. No price reduction required!

There are a lot of reasons a home isn't selling, and price is just one of them.

 

Posted by Ann Cordes, Home Ownership is Not a Distant Dream (Century 21 Randall Morris and Associates, Waco) about 8 years ago

Since the home is so unique and would appeal to a much smaller subset of buyers, I'd ask also what the agent is doing in his/her marketing materials to reach that subset.  Does the photography and listing description highlight the unique features to reach those buyers, or attempt to hide them and bring in buyers who will ultimately be disappointed?

Posted by Cathy Perry (RedKey Realty Leaders) about 8 years ago

Jennifer, well deserving of a feature.  So many agents just have the suggestion of reduce, reduce, reduce.  Your questions to ask are so spot on.  And, I would add, what the question to the agent of what marketing has been done.  This may be the case of a very unique home which will almost always take longer to sell the generic homes.  Great job. 

Posted by Juli Vosmik, Scottsdale/Cave Creek, AZ real estate 480-710-0739 (Dominion Fine Properties) about 8 years ago

Hi Jennifer,  Well, some interesting issues at play here.

1. Unique floor plan:  I understand but it may also be a positive in that she has the only listing offering that particular feature

2. Item #4 in your post:  If a reduction overcomes an objection ( floorplan ) it should be considered

3. Does the price reduction exceed the amount required to cure the floorplan ( is it even possible ? ) ?

Have a terrific weekend !

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) about 8 years ago

You are right - before suggesting a price reduction you should be prepared with facts about the market, feedback, etc.  There is so much to consider.  Thanks for your post. 

Posted by Joy Daniels (Joy Daniels Real Estate Group, Ltd.) about 8 years ago
The best advice I got was when a seller says I want to lower my price is, say LET ME DO THE RESEARCH TO SEE WHAT THE MARKET IS SAYING! Your clients deserve the knowledge you possess!
Posted by Yvonne Burdette-Van Camp, "Home"work, I have the Answers! (To Buy and Sell Real Estate, see me at Southwest Missouri Realty) about 8 years ago

I am struggling with this very issue right now!  Unique layout, great location, all the feedback regarding price has been positive (though I did list 10K higher than I wanted to), 3 months on market, about 15 showings, one early offer with unacceptable terms, and nothing since. And a market that has slowed down a bit.  

This post was wonderful, Jennifer.  I very much appreciate how you put yourself in the shoes of the client to help us agents get our heads out of our butts :)

Posted by Tanya Nouwens, Montreal Real Estate Broker & Stager (RE/MAX ROYAL (JORDAN) INC. / Tanya Nouwens Inc. www.readysetsold.ca) about 8 years ago

Seems like a huge price reduction I always have something to show why we need to drop the price.

Posted by Chuck Carstensen, Minnesota Real Estate Expert (RE/MAX Results) about 8 years ago

Excellent post Jennifer.  Whether its a recommendation for a new listing or a price reduction comps and data should ALWAYS be a determining factor.  We can't recommend anything to satisfy a whim or pacify our clients.  If I had to take a wild stab at this, I'd guess that the LA was getting nervous and didn't want to defend his marketing or the state of market.  Far too often as listing agents we come under fire for reasons beyond our control.....a sort of shell shock mentality.  I'm not defending your friend's agent but I can understand the knee jerk reaction to recommending a reduction.  Hope your friend gets a contract soon!

 

Posted by Dave Leiderman, ABR, SFR - Realtor - DE & MD Beaches (Coldwell Banker Residential Brokerage) about 8 years ago

Jennifer, that is great advice.  Pricing right from the beginning is the best strategy, and making adjustments when necessary makes hastens the sale.  

Posted by Jeff Harris, Selling Austin. Every Day about 8 years ago

Jennifer, excellent post!  We assume way too often that the sellers will just take our recommendations without the benefit of being educated or, being educated elsewhere which could easily have an adverse effect on our reputations as sales people and the reputations of Realtors everywhere!

Posted by Jenifer Lower, Your Dream. Our Passion. (Bozeman Montana Real Estate .net) about 8 years ago

Jennifer...I think it is important that as an agent you look at your facts and support your recommendation. I despise agents who tell their clients they are going to "walk the price down" until buyers will make an offer. This strategy makes the seller look desperate...and they will get low ball offers only.

Posted by Jeffrey DiMuria 321.223.6253 Waves Realty, Florida Space Coast Homes (Waves Realty) about 8 years ago

I tell ya, it warms my heart to hear so much support for this approach to being a PROFESSIONAL real estate agent who takes his or her fidiciary duty to clients seriously. JAH is very happy today - thank you all!

Bill G - those are great discussion items. If only my friend's agent thought so too ;-]

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Great list. The six things to ask your real estate agent when he/she asks for a price reduction.

 

I'll re-blog.

Posted by Gregory Bain, For Homes on the Jersey Shore (Mezzina Real Estate & Insurance) about 8 years ago

This is a very valid concern.  There are many agents, whose only marketing trick is to reduce, reduce and reduce.  And without some empirical evidence, as to 'why', it may be an un-necessary reduction.

Posted by Alan May, Helping you find your way home. (Jameson Sotheby's International Realty) about 8 years ago

No explanation is not good. Comps may even tell that the house should sell for that price, but the reality isn't always the same, sometimes there is not an explanation with today's buyers, and experience can guide you as to what it will take to make a house sell. Did your friend indicate they wanted to sell quickly? Was the agent acting on their previous interaction that you were not a part of?

I was in a similar situation, the sellers seemed to forget everything they indicated to me and everything I told them, and when I told the sellers the bad news (people didn't like the size of the kitchen, floorplan, and other items we couldn't change, so we did indeed need a price reduction...they became angry. Even though we had discussed a future price reduction before listing, they declined. They felt I had misled them, because I had just priced the house a few months before with comps to support their house. They let my listing expire and immediately relisted 25% less and sold in three days.

I felt misled because they agreed to a price reduction if we didn't get a good response. Somehow their memory failed them on that point.

Sometimes even if you tell them why it helps. Sometimes there is nothing that helps. The fact is, what looks good on paper may not play out in the marketplace.

Comps are not end alls. I would say, be careful advising your friend and/or judging this agent.

Posted by Dawn Maloney, 330-990-4236 Hudson & Northeastern Ohio (RE/MAX Trinity Northeast Ohio Real Estate Specialist) about 8 years ago

When we have a one of a kind property hard to price and/or hard to sell based on it's uniqueness (no exact comps) or we just don't know why it is not selling we do a pricing strategy. We will bring several top agents from our office to the home and each agent will recommend a price based on what their buyers would pay for the property and why. The seller is at least impressed that their agent can bring in several professionals and experts as a team all trying to help the seller get the best price because sometimes pricing can be as much of an art as a science and it is part of the overall marketing strategy.

Posted by Mitchell J Hall, Lic Associate RE Broker - Manhattan & Brooklyn (Compass) about 8 years ago

Very thoughtful post.  I think anyone could see why re-evaluating would be a smart move.

Posted by Ron Marshall, Birdhouse Builder Extraordinaire (Marshall Enterprises) about 8 years ago

Great questions to be prepared to answer as a Listing Agent ! If you are attemting to target a different audience you should be able to explain the why behind it to ur client !

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) about 8 years ago

If the listing agent answered those questions before they were asked when they suggested the 50k price reduction, I'm sure your friend's reaction would be more positive. I like Mitchell's approach #37, by having agent's tour the home and get their professional opinion. Sometime a very unique property is hard to pinpoint the best price for too.

Posted by Pam Graham, Jacksonville, Clay & St Johns Counties (All Real Estate Options) about 8 years ago
Every once in a while you get one that doesn't sell! Your answer is that it's unique. I had a 3 story waterfront that took forever to sell. We are un a retired area. MOST of us do not want to climb 3 levels of stairs. Just had to find the right buyer. It had been reduced very low and still hadn't sold. When I listed it, I suggested that they list it at fair market value and then wait for the right buyers. They did and sold it for 97% of the asking price. It took a while, but had they sold it while it had been reduced, they would have lost out on 60,000. It just wasn't necessary as they did not HAVE to sell. They were thrilled that they waited. :))
Posted by Joni Bailey, Your Huntsville / Lake Livingston Area REALTOR® (101 Main St. Realty) about 8 years ago

A $50,000 drop? I'd be curious as to what the original listing price--that's about a third of the price of an average home in Oklahoma City. Sometimes agents forget we are talking real money here. Thanks for a great post.

Posted by Steve Mangus (not active) about 8 years ago

Hi Jennifer - Homes are often overpriced at first because the seller wants more and a hungry agent wants to get the listing.  Since such an agent may have taken the listing without advising his seller of the comps and appropriate price, he will have a harder time explaining why he wants to reduce the price and by how much. Your list of questions is a good one, and these issues should also be considered even before the listing is posted, as I'm sure you do.  And we need to keep our clients advised of ALL factors that may be impacting their ability to sell or to find their new home.

Posted by Susan Neal, Fair Oaks CA & Sacramento Area Real Estate Broker (RE/MAX Gold, Fair Oaks) about 8 years ago

Jennifer,

Interesting situation.  I guess you're in a different marketplace than your friend's house? 

Each market is different and I don't know if the $50,000 reduction represents a 1%, 5% or 10%+ reduction.  I don't believe that price is all that matters, but in my marketplace, no offers is the feedback, and no additional feedback isn't needed.

Posted by Lloyd Binen, Silicon Valley Realtor since 1976; 408-373-4411 (Certified Realty Services) about 8 years ago

Love the blog. If you're going in a little high in the beginning, make sure you get a reduction agreement right off the bat. It'll make things easier.

Posted by Eric Michael, Metro Detroit Real Estate Professional 734.564.1519 (Remerica Integrity, Realtors®, Northville, MI) about 8 years ago

I would have asked if she's gotten any offers? What is the avg days on market for houses in her price range? Maybe the agents figured that they started $25,000.00 to high, so in reality they are only reducing $25,000.00? But one thing I would never do is rely on feedback to suggest a price reduction of $50,000.00  These could just be the type of agents that claim they can get sellers more money in order to get listings, with the intention of suggesting a price reduction right from day one.

Posted by Jeff Pearl about 8 years ago

One thing I didn't mention in the original post is that my friend did not list with the highest bidder; in fact, other agents came in $50,000 higher, but she felt that they weren't accounting for the unique nature of the home that would be off-putting to buyers looking for a traditional floor-plan. So, I'm guessing that the list price was in the ballpark to the best of anyone's ability to gauge the market's reaction to the home since it's not a typical style and architecture for the area.

Dawn - I agree with you that comps don't tell the whole story - or even most of it. I believe that proper pricing is 50% data and 50% gut + experience working with buyers. This is one reason I don't advise agents to show up at the door with a CMA before they've seen the house - the facts and figures are NOT all that matters when coming up with the proper price... and they're not all that matters when trying to figure out why a home isn't selling.

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Did your friend push for the original price, or was it the agent's suggestion?  Was there competition for the listing, causing the agent to suggest a higher listing price to get the listing, knowing he would shortly thereafter suggest a reduction?

Posted by Former Agent (None) about 8 years ago

Jennifer - These are good questions to consider as we are approaching our clients for a price reduction.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 8 years ago

Woops.  Don't know how I missed Jen's additional information post.  Oh well.

Posted by Former Agent (None) about 8 years ago

Jennifer, what a great list of questions we should be prepared to answer when asking for a price reduction. I'm printing them out to keep on hand so I don't forget any of them!

Posted by Chiara Petro, Your KEY to Home Sweet Home - Knoxville TN (eXp Realty - Angie Cody Team) about 8 years ago

This is a challenging post to comment on.  I just changed my response several times.  No one wants to do price reductions, Sellers or agents.  Buyers not making offers is a comment on price as long as all other variables are explored.  Maybe it's the amount of reduction that shocked your Seller?  Hard to know each city and each street and each market.  Good post!  Kristine

Posted by Kim & Kristine Halverson, Sisters, Realtors (Compass) about 8 years ago

A price is an easy solution to a house that has not sold. In some cases, that solution is arrived at too easily. Other avenues can be followed: target marketing, staging, an open house event all come to mind. If other endeavors fail, a price reduction may be needed.

Posted by John Juarez, ePRO, SRES, GRI, PMN (The Medford Real Estate Team) about 8 years ago

Studying the particular market trend has been one of the ways I am revamping my listing presentation, showcasing how I'm different from other agents. I'm glad I took my recent course to help me be yet an mproved agent.

Posted by Loreena and Michael Yeo, Real Estate Agents (3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co.) about 8 years ago

Hi Jennifer--great post.  This is almost exactly what happened to me when I sold my last house.  After 3 weeks the agent was suggesting a price reduction because the Realtors who had toured on the broker's open said it was too high.  I said, "No."  The house sold two weeks later for nearly list and appraised at that price.  My agent was surprised and so were all the naysayers in the local office.  A client can certainly be left with the impression that the Realtor has not cohesive marketing plan or concept of how to sell the property. 

Posted by Janet Jones, Home Staging, Interior Redesign Kihei, Maui, Hawaii (Just Your Style Interiors, LLC) about 8 years ago

Here's the thing - if an agent LEADS with a price reduction as the only solution, he's going to appear lazy OR incompetent since the agent suggested or agreed to the price in the first place. And when you're talking about a significant price reduction, it's almost certain that some of that money could be better spent improving the property to make it more valuable (e.g. building a garage, adding a bathroom, replacing the flooring, painting, landscaping, etc.).

If the seller can't or won't make improvements that the market seems to be demanding, then a price reduction is an alternative that may need to be considered. But I believe our job as professionals is to explore ALL options, not just the easy one for us.

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

I agree you really need support to warrant a $50,000 price reduction!  Most buyers in our area dont say "this home is overpriced" because they arent necessarily thinking that specifically when commenting.  Most buyer lingo terms for overpriced are "this floor plan just doesnt work for me", or "it just isnt 'the one'!" or "this just isnt the style we are looking for", etc.  If the buyer agent has done a good job of letting the buyers preview the homes they are seeing (by mls info) then they should already be aware of many of these things they are stating when they see the home.  Its hard to know if "this floor plan just isnt for us" really means THAT or if it means "Im not impressed with what Im getting for the price".  Non specific comments are usually a sign of an overpriced home.  If it is specific in nature such as "the master bedroom is too small for our furniture" then you can usually take them at their word. 

Posted by Teresa Tedder (Carolina Realty of Wilkes Inc) about 8 years ago

Excellent commentary, Teresa!!!!!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago
Some great tips and ideas on this blog and the related blogs - well donr
Posted by Barry McCormack (Ultimate Homes) about 8 years ago

I like you questions except #4. How could the agent (any of us) actually know the answer and want to provide it. We just don't know.

I agree with Teresa completely. SPOT ON!

I have the exact same situation with a local friend/customer selling their home out of state. It's a beautiful, upgraded home. BUT, it's small 1,200 sq ft and one bath. All the showings indicate they love the house but the bedrooms are too small and there is one bath! What do the buyers expect for bedrooms in a 1,200SF house and it's listed as ONE BATH.

A series of price reductions, no mention of the bedroom/bath and three offers this week. Price overcomes all objections. There is a buyer for everything at the right price. The initial comps using the traditional CMA analysis is only a beginning and doesn't always tell the whole story.

Buyers don't always say what they mean...

Posted by Bob Pisa, Broker Associate, Commitment, Service, Satisfaction... (Downing-Frye Realty, Inc. Naples, FL) about 8 years ago

Great post. Too often the answer seems to be lower the price. At some price a home will always sell, but it may not be the best price the seller could get. You can always give something away.

Posted by Todd Anderson, Park City | Deer Valley Real Estate (You In Park City group - KW Park City Keller Williams Real Estate) about 8 years ago

Hi Jennifer.  Good post.  I agree with the comments above, especially if people are using "code" for their feedback so as not to insult the seller, and most people will not mention price.  You last line of the post stated it best- it should be priced correctly from the start.  There are certain agents in my area that seem to overprice their listings, and I am assuming that they start their (with a false promise or sense of hope to the seller) just ot get he listing.  All of their listings sell at about 8-10% below what the original asking price was.  All of them.
I'd love to present an offer one day and have it about 8-10% below asking price and mention "since all your listings seem to sell at this amount below asking, my clients feel this is a fair offer!" but I wouldn't do that.
If it is getting attention, it could be fairly priced, however, but I agree with the main point of your post that information is key and keeping clients "in the know" is essential to our job.

Posted by Gary Frimann, CRS, GRI, REALTOR and Broker (Eagle Ridge Realty / Signature Homes & Estates) about 8 years ago

My take on the situation is that the agent needed a commission check in hurry and this was the fast track to getting it.

Posted by Camille Victour, Moving People Forward (HomeSmart Professionals) about 8 years ago

Certainly price solves everything, however there are certain things that need to be addressed.  

I've had one I've been battling for months.  The neighborhood used to have some bad duplexes next door.  That's been cleaned up but how to you market that?  Leading with "Not as bad as it used to be" just doesn't cut it.  And the house was expanded to one particular family.  It also worked for my seller but it's been 10 years and it's not what buyers want now.  Everybody wanted a bathroom upstairs.  My seller was out of work, not an option.  It backed up to a main street.  I can't change that.  That leaves the one thing I can adjust.  And eventually price fixes everything, although leading with a $50k reduction in Florida...?

Posted by Valerie Crowell, Broker Associate (Keller Williams) about 8 years ago

Valerie - the situation you describe really can ONLY be dealt with in the price! I call these sorts of properties "fatally-flawed" where the flaw can't be fixed and the only way to sell them is to price them very competitively. Hopefully the owner also got a great price when he bought due to the location, although it sounds as if he made some improvements that weren't going to be considered improvements in the market.

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Jennifer - You are right on target....great advice for your friend

Posted by Bonnie DuPree (ReMax Mountain Properties) about 8 years ago

It also depends on how much the seller/friend wants to sell.  If they are in no rush, then just leave the price alone.  But if they want to get it sold anytime soon, then whether or not they want to believe it price is a major factor.  Assuming the marketing is adequate and the house is getting showings and the problem is the layout and other property factors, if it has not sold then the price needs to keep going down until it does.  If they want to leave the price alone, then it might be years before that "right" buyer comes along if ever.

Posted by Rob Arnold, Metro Orlando Full Service - Investor Friendly & F (Sand Dollar Realty Group, Inc.) about 8 years ago

I sure can understand why your friend would want some answers. If this is a long-time agent, top producer - has he progressed with the times, or is he just relying on his reputation to get him business?  Back in the day, an agent could tell the seller something, and the seller had very little chance of challenging that information. Today's sellers have a ton of information at their fingertips. This agent has some 'splainin' to do!

Posted by Karen Crowson, Your Agent for Change (Coldwell Banker Residential Brokerage) about 8 years ago

We are the "professionals"  and need to demostate as much in each interaction we have with our clients, whether they are sellers or buyers.  Your advice was spot on and she is lucky to have you as a friend to provide her with such sage guidance.

Posted by Judi Monday, CRS-Green Valley AZ Expert, Green Valley Arizona R (RE/MAX Valley Properties) about 8 years ago

I only wish the LISTING AGENT would read this post!!!!

Posted by Ben Benita, Speaker, Author, Game Changer, Coach (Ben Benita) about 8 years ago

Excellent post. It's so important requests are reasonable and supported with comps and communication.

Posted by Sylvie Stuart, Home Buying, Home Selling and Investment - Flagsta (Realty One Group Mountain Desert 928-600-2765) about 8 years ago

Jennifer - price reduction recommendation should always be supported by updated market data.  However, low traffic/no showings is the best feedback, unless the property is located in a very depressed market.

Posted by Krystyna Baty Ryan, HONESTY TRUST TECHNOLOGY SERVICE RESULTS (The Real Estate Group) about 8 years ago

I have a uniquely styled home listing and the feedback has been because of the floorplan, but it really isn't all that weird.  Anyway, it's been up for a long time and we've had many price reductions.  It is a low priced home to begin with but there is a lot of competition, including forecloures and short sales priced better.  Every time I've gone in with a request for a price reduction (and they've been $5,000, not $50,000 - the list price doesn't support that) I have a reason that I explain to the sellers.  In fact, this is a vacant home, an estate sale, and I didn't expect them to be as difficult to convince them of price reductions based on feedback and comps, but it hasn't been easy even with proof. 

Besides the village it is located in still depreciating since we first listed it, they also have to overcome the feedback.  We need to get it to a price range where the floorplan won't matter.  We did finally get one offer but it was a lowball and they wouldn't accept it.  In this case it seems like we're following the downturn a step behind.  When I listed it I thought it was a cute house and the floorplan wouldn't have bothered me, but we keep hearing it over and over. 

Posted by Judy Orr, SW & Near West Chicago suburbs (HomeSmart Realty Group) about 8 years ago
"Unique and not practical". I think that feedback has a meaning that is being missed interpreted. Unique and not practical for most buyers does mean that the price needs to be adjusted to reflect it's less marketable appeal. Case in point. I had a listing that seller was sure was worth $15,000 more than I wanted to list it for. Feedback on showings was the " basement is not finished". Feedback from showings never said "your home is overpriced because everything in the price range has finished basements". Sometimes sellers and agents have a hard time reading the writing on the wall because we choose not to see the meaning
Posted by Sharon Schlott (The Shook Agency) about 8 years ago

PRICE DOES NOT SOLVE EVERYTHING!  Not yelling at you, Jennifer but continuing this spirited discussion.

Specialty homes, with unique characteristics, take longer to sell, unless you want to give it away.  And the Sellers should be told that up front. 

And even if you want to give it away, sometimes there are no buyers in the market.  A few years back, we went 6 months without a single parcel of land selling in our town.  Not one.  If there are NO buyers in the million plus price point currently, and we went through that, too, what do you do with the $3 Million house?  Price it at $900,000?  And it may be months or a year, before a buyer at that price point appears again.

Price cannot solve it if there is no market.  Sometimes there is no market.  Sometimes no one shows up at a real estate auction except the bank.  I specialize in "wood" houses e.g. Arts & Crats.  These are a giant step from neutral and a tough sell.  Sometimes you have to wait to find that needle in a haystack buyer.

I loved your post, Jennifer because you read my mind!

 

 

 

Posted by Margaret Mitchell, Seacoast Maine & NH Real Estate (Coldwell Banker Yorke Realty) about 8 years ago

It's hard to imagine how a "top agent" would suggest a price drop without data to support it.  

Posted by Kate Akerly, Manhattan Beach Residential Sales (Kaminsky Group) about 8 years ago

I just had two listings just like this.  Both were in excellent condition and locations, but the interior styles were ones that were not the most popular with many buyers.  I asked the sellers to remember what thay were thinking when they  bought the home and then recomended PATIENCE to wait  for new buyers who felt the same way.  They both sold.

Posted by Tom Curtin about 8 years ago

A lot of the time too, the agent "buys" the listing and just agress with what the seller wants in order to get that listing.  So the agent will tell your friend that they will list it at the price the seller wants, then after the 2 months or whatever, a price adjustment will have to be made.

I can only imagine a $50k price reduction being made because it was overpriced from the start.

Posted by Jennifer Chiongbian, Real Estate Broker - NYC (Specializing in all types of Manhattan apts & townhouses) about 8 years ago

COMPS, COMPS, COMPS, HOMEWORK, HOMEWORK, HOMEWORK and a little thinking on your feet goes a long way as well. Are we Sheeple or Sellpeople?

Posted by John DL Arendsen, Crest Backyard Homes "ADU" dealer & Contractor (CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS) about 8 years ago

I might be the only one to disagree. I have a listing that is more of a traditional floor plan but the feedback we consistently get is that buyers want a more open, great room layout. We have been on the market over a year, priced right in line with neighborhood comps but time and time again, other homes in the neighborhood are selling but not this listing. Since the seller can't change the floor plan, the only thing they can do is compensate with price. We've tried the strategy of waiting for that one perfect buyer and it hasn't worked. Buyers rarely say "this home is overpriced." That's what agents say. Buyers say "I don't like the floor plan" and what they're really saying is "compared to other homes we've looked at in this price range..." fill in the blank.

Posted by Cheri Smith (Total Property Resources) about 8 years ago

Good morning Jennifer - after reading your post (great job by the way) I feel really good about adding our new feature "special offers" to our site.  This can be a great alternative to the standard "price reduction scenario" and is also a motivational inspiration to potential buyers who may not have seen the listing sitting on the market for any length of time.  By adding a special offer to the property like a $1000 or $10,000 gift card or cash at close, it provides the agent a new way to approach a seller and a price reduction if as you say, it's actually necessary. 

Posted by Brad Andersohn, ActiveBrad - 707.646.1876 (Executive Director of Education at eXp Realty) about 8 years ago

The market generally communicates loud and clear about pricing.  One with their feet they come and two with their pocketbooks they make offers (Mike Ferry line).

If they are coming and not making offers - Wrong Price!  If they are not coming, wrong price!  This is assuming the agent did everything else correctly to get the property exposed.  Joy

Posted by Joy Carter & Jeff Booker Brother and Sister Team, Trust Your Family's Move To Our Expertise! (Keller Williams Parkland/Coral Springs Realty-GreatFloridaHomes Team) about 8 years ago

The point is, in spite of careful market analysis and an educated guess, in the current market, we don't know what a home will sell for, especially in communites where most homes are unique in design and style. 

I think it is important, up front, to suggest to potential Sellers, "if you don't have a compelling reason to sell in this market, don't".  Waiting for the market to improve is an interesting strategy...that suggests to me a Seller who has no compelling reason to sell. 

What we need to do as Listing Brokers is ascertain the reasons a homeowner wants to sell and the timeline with which they wish to accomplish that goal.  Then, we need to assit them in setting their expectations according to their answers.

After numerous showings, and no forthcoming offer, I don't believe it is unreasonable to suggest a price correction.  Regardless of what Buyers say, price is the bottom line of why no offers have come forth from the showings. To suggest that someone put more money into a home they want to sell is generally not great advice, unless the deficiencies are universal and everyone involved believes that the home won't sell, at all, because of them.  The statistics bare out that rarely do homesellers get out of a remodel or improvement what they put into it.

The other point is this....communicate!  Continual feedback and updates of changing market conditions to Sellers are imperative.

Posted by Anne Mayberry, Living the Steamboat dream since 1978! (Steamboat Sotheby's International Realty) about 8 years ago

I had a listing that had a similar exterior to the community but a highly upgraded interior.  My client priced it very aggressively to sell quickly due to a relocation.  We were getting the occasional showing but no solid offers.  My suggestion was to RAISE the price.  He looked at me like I lost my marbles!  "It's not selling at X, why do you want to price it at X+30K?"  Because it puts you over the next $100,000 price marker!

How many times do you do an MLS search by price?  Your client states they want a home in the $200-300 range.  You don't search $182K just to see what comes up below what they want.  This home was priced TOO AGGRESSIVE to attract that buyer demographic. 

We raised the price for a two week trial.  Within the first week, we were in a MULTIPLE offer situation.  HAPPY ENDING for my seller!

Another possible suggestion is the wording of the listing.  Agents are not always the best copywriters.  Instead of downplaying the uniqueness - highlight it.  It's going to take a special buyer to appreciate the features.  If it isn't a "family-friendly" structure - write the copy for the 'Executive couple looking to entertain guests in the gourmet kitchen featuring the latest in appliances and contemporary design.'

Don't hide the unique - FLAUNT IT!

Posted by Bea Lueck (Coldwell Banker Rox Realty) about 8 years ago

I try not to suggest price reductions especially $50000 drops!  Instead we look at what could be done to the home for that same amount of money ... What could we do to upgrade or attract the right buyer?   Good luck to your friend!

Posted by Susan Emo, Kingston and the 1000 Islands Area (Sotheby's International Realty Canada - Brokerage) about 8 years ago

Great post.  Unique homes sometimes just take longer to sell and a price reduction may not be the answer.  I may even make you appear desperate. 

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 8 years ago

Agents should only recommend a price. You don't say but the property could be overpriced to begin with. That's the toughest part of this business...getting it right...up front and giving the seller the truth no matter how bad the news is. It really gets down to "...hate me now or hate me later..." This guy obviously chose to have your friend hate him later. Certainly a price reduction recommendation needs to be accompanied by solid information and research. But so does the original price recommendation. The true indication of a good price is TRAFFIC. If the traffic has fallen off it's because the buyers do not perceive the value...whatever the price. Unfortunately, the only weapon a seller has is the price. Frankly, I'm a little surprised that many people here are assuming that the listing agent in this case is lazy. He may be...but many of you seem to be wrongly abdicating your position of responsibility to get it right in the first place.

Posted by Randy Berner about 8 years ago

 

Jennifer, A friend of mine recently went through a similar experience with her “top” area agent. There were lots of showings … home unique and not a good fit for most buyers.  How is reducing the price going to change the feedback none of which was around price. Other homes at even higher prices were selling. Does the home become more desirable at a lower price? Good question. It may.

 

Posted by Kathleen Daniels, San Jose Homes for Sale-Probate & Trust Specialist (KD Realty - 408.972.1822) about 8 years ago

Hi Jennifer

Great post. So true some explaination is certainly nccassary even if it is #4 trying to pver come the objections with price. How can you go go in with no prepared eplaination? Not even a lame one..........Brad

Posted by Brad Hornshaw, Realtor, Listing Agent, Buyers Agent, Investments (Brad Hornshaw Realtor Lynnwood, Bothell, Everett) about 8 years ago

A couple of things here.  1.  I never give feedback on price.  2. Price cures all defects.  When you say the home is " unique and simply not practical" that tells me that the style of the home is not widely appreciated by the buyers in the market.  If you have a 2011 metalic purple mercedes with gold flakes embedded in the steering wheel it may have cost the owner plenty to get it that way but most people will not want to buy it for what the owner feels it is worth.  When comps are generally based on age, sq footage and location they do not generally take "uniquness" into consideration.

Posted by Lucien Vaillancourt, Jacksonville Florida Real Estate (Native Sun Realty, Inc.) about 8 years ago

Jennifer,  You obviously put some thought into this post.  I have had a few unique properties listed in the past and the pricing can be very tricky.  Nevertheless, I had a recent listing appointment and gave a price that was considerably less than some of the other agents.  I went back and looked at all the comps and threw out a few of the lower ones and was able to come up a little higher.  Unfortunately, some agents just don't take all the facts into consideration when they list a home.  They know that most sellers are interested in one thing and so they give it to them.  Then they come back later for a price reduction.  Tell your friend, if the agent cannot justify the price reduction don't give it to him and find another agent.  If it was priced wrong to begin with on purpose to buy the listing, find another agent.

Posted by Don Taber, REALTOR / BROKER / CRS / GRI (Our Town Properties, Inc., Wilson, NC) about 8 years ago

I try and start at a fair market price and show owner comps and what is on market, pending and sold past 6 months. Also, letting them know which homes were updated. I also take my seller out to see these homes on market so she knows her competition.

I learned to prepare my seller before hand that if we dont get any bites this first few weeks to a month we need to re-evaluate the price. That way they are prepared for a price reduction and it is not a surprise. It is about educating the seller about the market.

Posted by Michelle McCarthy, Experienced Realtor Call 415-279-5329 (Berkshire Hathaway) about 8 years ago

No doubt whatsoever, the sellers deserve information to back the price reduction and the agent needs to provide it to protect himself.  However, that no visitors or agents have mentioned the price as an obstacle does not mean that the price is not an issue.  If everything is lining up, i.e., good visits, positive feedback about the home's character, agents checking the home, etc., but no contract is forthcoming, the agent and seller have to ask, "What is keeping buyers from offering?"  By process of elimination, it usually is the price.

My experience with visitors to open house is that virtually the only ones who complain about price are the ones who have no financial capacity to purchase.  The ones who say, "Nice house," then leave never to be heard from again, usually find the price to be the problem, but won't say so. 

Posted by Robert Schneider (Blue Ribbon, Realtors) about 8 years ago

Jennifer,

 It's  unfortunate the agent cannot communicate effectively with the seller.  It's also  true some things are harder to explain than others and intangibles such as a "unique" floor plan and it's potential affect on sale price can fall into that category.  As we all know there are homes priced in accordance with the comps that might appraise in line with the comps but are unlikely to sell for a comparable price because of a unique floor plan or other "unique" quality.  

Here, in the Wilmington, NC area, only 10% of homes are selling in any given month.  Since, sales are inherently about probabilities, the probability the buyer for such a "unique" home is actually in the market at this time are pretty slim.    

Since the property did receive showings in the beginning, it sounds as if the agent did price in accordance with the market and was marketing effectively.  If there is nothing further it is sensible to do to improve the home's marketability quotient, reducing the price or taking it off the market till the market is better are the likely choices.  At least that would be true in our still declining market in the Wilmington, NC area. 

I find it very hard to second guess anything about this listing except the apparent inability of Seller and agent to communicate effectively.  I'm not "there," don't know where "there" is nor what's normal today for "there!"  

Posted by Beverly Femia, Broker Realtor Stager - Greater Wilmington, NC Are (BlueCoast Realty Corporation) about 8 years ago

Seems like a rather high amount for a price reduction (unless of course the home is 5 mil). Good post, good advice for all.

....and alas, your friend should have hired you to sell her home.

Posted by Laura Higginbotham, Broker/Real Estate Consultant, Mesa, Arizona Home (Arizona Real Estate Options) about 8 years ago

I think you are missing a point here.  It does not matter whether your friend received feedback from the buyers that the home was over priced since by your own statements those buyers were not interested in the home due to its unique features and being "simply not practical for many buyers".  What those "buyers" think is irrelevant since they are not actual buyers for this home regardless of the price.  If your friend is not getting activity from the buyer pool that would be interested they need only investigate two items at this point:

  1. What is the buyer pool for this home and are they locating it with their marketing?
  2. Is the home over priced?

If you are hitting the buyer pool for this home and the buyers still are not showing up then you better start lowereing the price.

 

Posted by Jim McCormack, Nashville Short Sale REALTOR - Stop Foreclosure (Nashville Short Sale Specialist - Jim McCormack - Edge Advantage Realty, LLC - 615-784-EDGE (3343)) about 8 years ago

Jennifer, thank you for this timely post. I too have a listing that has some unique features and although it is priced competitively, it is going to take a specific buyer to appreciate it. I did not want to push for a price reduction, but I did suggest to my sellers a few things that appear dated in the otherwise updated house could use a facelift and they are going ahead with that work instead. But I am going to take a tip from Bea #85 and rewrite my descriptions to "flaunt" the uniqueness rather than hide it.

Posted by Suzi Sandore, North County San Diego Homes (RealtyONEGroup) about 8 years ago
Maybe that $50k would be better spent making the home either less unique or uniquely wonderful. Sellers want to know whether there's been sufficient time, exposure, the overall market etc.
Posted by Terry Kilby about 8 years ago

Hi Jennifer, thanks for the discussion. I think that we should do 2 things up front:

1. With the comparables suggest a starting price "range" for the sellers. Explain to them that the market will be changing, and for today's market they should pick the price in the range that matches their goals - lowest price to generate the most showings quickly, or higher price within the accepted range to "test the market" but be prepared to drop it if we don't get showings, or more importantly, an offer. The seller should always pick their price with our assistance and guidance as the experts.

2. Prepare them up front when pricing - for a price reduction (in 2, 3 4 weeks, etc.) when you first list it. Let them know that we will be monitoring the market and will again share the comparable sales and current market activity so that we can see the changes and get guidance on what price to reduce down to. Let them know that it may need to be checked and possibly reduced every 2-3 weeks until it sells. These days we have to be more proactive and aggressive with pricing to keep up with the market since it is constantly changing.

Posted by Stacey Johnson-Cosby, Selling Kansas City-Real Estate & City Blog (Reece & Nichols Realtors-Kansas City) about 8 years ago

This is why I try to educate real estate agents on the benefits of Home Staging. Price reductions are much more costly and less effective than Staging. 

Many times, the home's price is on point, but fails to "speak to" potential buyers. Too many personalized room colors, too much clutter, perhaps cat odors or other odors. 

Wallpaper border is a huge turnoff for the majority of home buyers. It's an inexpensive fix.

When looking at the whole picture, it makes sense for real estate agents to recommend and perhaps even team up with a professional Home Stager. It's a win-win situation for all involved.

The seller gets listing price (and sometimes even higher than asking price), the real estate agent gets a better commission (due to less price reductions) less time on the market (which helps their reputation) more respect in their field (because they cared enough to go above and beyond for their seller client to make the home stand out from all the rest) the buyer (they don't see a lot of "DYI projects while viewing and home appears in "Move-in condition").

Before recommending a price reduction to the seller client, recommend Home Staging. 

Great article!

 

Kathi Howland

Nicole Interiors Home Staging

 

 

Posted by Kathi Howland about 8 years ago

I love what Bea (#85) suggests. Don't hide it, flaunt it!

Several years ago I had friends who were trying to sell their house unsuccessfully. They engaged a series of agents who fell into the "list it and forget it" category. I'll have to admit, my friends were pests.

For instance: When an agent used a picture of their bar sink and mini-fridge with copy about the gourmet kitchen, they asked to have it changed.

But what took the cake with one agent was when she yelled "If you'd drop the damn price we might show it!" And... it was that agent who had suggested the price.

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) about 8 years ago

Great post - especially for us new agents out here.  One of the best tools I have in my arsenal is my reputation and it is mine to protect.  The more information we have about a home and the various marketing techniques we can use the better an agent we will be.  I agree with several of the posts about flaunting the uniqueness of the home which means the agent needs to be able to see past the obvious "problems" of this unique home.  Protect your reputation, and provide more options than just "reduce the price".

 

Posted by Wendy Miller about 8 years ago

Jennifer, Super post, totally deserving of the feature, well done!  Some "Top Agents" tend to rest on their laurels.

Posted by Marge Piwowarski, Phoenix AZ Horse Property, LLC (Phoenix AZ Horse Property) about 8 years ago

Hi Jennifer,
I think this is a great blog subject, and there are some outstanding comments here - read and learn. 
One thing that is being missed I think - is the other thing that affects a sale - Exposure...

I tell my clients that price and exposure is the most important selling factors, and that even with a the right price, bad exposure can keep the property from selling.

Kinda like an open house wiht signs in the front yard - no exposure on the main streets will not get you all the  traffic that is out there. 

Posted by Terkel Sørensen, Realtor, 951.805.0773 , Bank owned and Short Sales (Real Estate Places) about 8 years ago

Jennifer, great list of questions.  No agent should ever go into a listing without documentation to confirm the recommendations.  So sad that some just don't do their job.

Posted by Maria Picardi Kenyon (Re/Max Tri County) about 8 years ago

Your friend should have consulted with you first before listing with the other agent, so regardless of your friendship, as a RE agent, any advice would be inappropriate while under contract with the other agent. 

A homeowner just completed a renovation  and the design and style were not conducive to the homes in the neighborhood, so should they ever decide to sell, it would be a major challenge. Sellers who have unusual styles or design homes must employ a marketing strategy to attract a particular buyer for their home and if unsuccessful, the only solution to get buyers excited again is pricing.

Your friend should have been aware of these challenges and it appears that the top agent might be tops in listing and using huge pricing reductions to close yet didn't inform your friend about the consequences because of their unique home design. 

Selecting an RE agent based solely upon their sales numbers could be detrimental. Would you select your lawyer, doctor, financial adviser that way, I hope not?

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) about 8 years ago

I wish your friend luck in resolving this dilema. Mine is simpler but still challenging. Priced right, showings come & go but only offers are lowball tire kickers, with arroganze to boot from one prospect that just came out of a foreclosure and wanted me to finance them.

Posted by Tina Gleisner, Home Tips for Women (Home Tips for Women) about 8 years ago

Fantastic post!!!  What a great topic and very well written!!!

Posted by Lea Ann Muriset (Prudential NW Properties) about 8 years ago

Jennifer

How about a basic fact instead of a thrill seeking $50k, $50k off what?, That would have only been a 2.5% reduction on my last sale. How was her home priced in relation to her competition, did any competitors sell . As far as I'm concerned a little more info would be nice but not as discussion worthy as agent asks for $50k price reduction for no reason. And yes it is possible to make some assumptions such as if there is nothing wrong with the house and the agent has done a decent marketing job that the only thing left is price and that is the thing to work on, or take it off the market.

And in this case absent the facts it may well be possible that a $50K price change is what is needed to stimulate buyer interest unless he is one of those agents that asks for $50 but hopes for $25 and thinks $25 may stimulate some action thus isn't really asking for a $50 reduction, just thinks seller will go along with half the request, but if you only ask for the $25 you want, it will get turned down. He knows the client better than us.

I'm sure the point of your post is for us to give our reasons for our suggestions, but I for one won't jump to the conclusion that he didn't, and she may be giving you a common line of owner BS. At this point it's hearsay, he said, she said, and selective hearing. We have all been through a very detailed discussion on why a price reduction is needed and the owners response is the famous let's just try it for a little while longer at the current price and see what happens.

I remember being in a coffee shop overhearing the owner of an expired listing telling his friends in response to a why didn't you lower the price, and him saying that he would have if the dumb agent had let him know that a lower price was needed, I recognized the seller and knew the agent and knew that request was made often. 

Posted by Brian Park about 8 years ago

Sometimes all it takes IS a price reduction, and a call-to-action, to get fence-sitters to make that leap from "thinking about it" to "let's write up an offer".  But a drop in listing price just to satisfy the listing agent's needs and not the seller's isn't the right thing to do.

Since you say the home is "unique", then your friend should find out if the listing agent is marketing to people that fit that uniqueness.  

Posted by Randy Elliott, REALTOR : Lodi / Stockton, CA (RE/MAX Gold) about 8 years ago

Hi Jennifer,

 

The question is, where to go from here.

1) An appraisal would be a good start. An it might be a good idea to have an appraiser go over the reasons of the appraisal price with the sellers, where they may cover such topics as functional obsolescence.

2) The sellers may want to offer to finance the $50,000 for a buyer, instead of dropping the price by that much!

3) The sellers may wish to have a contractor bid on any additions or modifications that are needed to make the house more ideal for the area (if possible and practical). Just getting a bid, and showing to potential buyers is a good start.

 

All the best,

 

Arpad

 

Posted by Arpad Racz, 408-252-0976 - www.aracz.com - Cupertino and Bay A (Altas Realty) about 8 years ago

Great post Jennifer.  We need to always keep in mind that the home is often their most valuable asset.  If the price needs to be reduced, there needs to be some reason.  Surely, the agent has some reasoning behind asking for a $50k reduction.  What percent is a $50k reduction?

Posted by The Hollinden Team, Serving the Greater Louisville area (EXP Realty) about 8 years ago

There is always two sides to a story.  I wonder what the original "expected sales range" showed?   If this is a $1.2 million house, with a suggested price range of $1.15 to $1.25, and they started it at $1.25, then a $50K price decrease is what the market may be demanding, in order to entice an offer.

I'm with you, Jennifer, as well as many of the other posters.  If there are no price objections in the showing feedback, price may not be the issue.  It could very well be presentation,.  Or, it could be just a very unique house, requiring a longer marketing cycle.  

I'd personally want a lot more information before recommending a $50,000 price drop, even if it IS a $1.2 million house.   In my book, $5,000 is still a lot a of money to leave on the table, if not required.  We're not in the negotiating phase -- so $50,000 is a HUGE amount of money.  IMO, that large of  decrease has to be justified (with a new CMA) to be serving one's fiduciary responsibilities.      

I have one listing where we've only dropped $12K in over a year, but we've had over 50 showings!   This means, the market still likes the price, yet the buyers are being disappointed some of the home's features.   In this case, it's not an easily correctable feature.    

So, this is not an easy question and thus the lively discussion.  Congrats on that!    

 

Posted by Andrew Lietzow, MBA-Exec Dir Iowa Real Estate Investors Association - (IaREIA | Iowa Landlord Association) about 8 years ago

Jennifer

As my algebra teacher used to say..." 'splain!" He no doubtdely provided data to justify the original price so why not do so in the case of a suggested price reduction? Feedback is important but not the only factor as price may be the issue based on data but it is not being revealed in the feedback. And sometimes everyone seems to think the prcee is off when the data justify it. Is that just buyers looking for a deal?

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) about 8 years ago

The listing agent may work for a company where price reductions are rewarded!

The problem in the case is the disconnect between the feedback and the price reduction recommendation.

It appears that even thought the price is within the price range for the location, number of bedrooms, lot size, etc., it is the style of house that is creating the issue. The agent and seller need to determine who the potential buyer would be, and what changes need to be made to attract that buyer. Maybe it's price, maybe it's changing the staging. 

 

Posted by Kathleen Sheridan (WEICHERT, REALTORS ® - McCarthy Associates) about 8 years ago

I'm torn on this one... I definitely agree that a reduction like that should be backed with SOMETHING to support it, but I am of the line that a lot of showings and no offers equals feedback that it IS overpriced, even if people don't come out and say so.  Again, I'm not going to go in and recommend a significant price reduction without some meat, but that meat isn't always going to be about comps.  Maybe you need to reduce to get in a different price range to get in front of different online searchers?  Maybe you need to reduce to trigger FHA eligibility?  I think sometimes a little "gut" comes into play too.  I know if I have a lot of showings and no offers, I absolutely look at pricing, even if I am the one who recommended the initial price.  I just emphasize that the market changes daily, and we need to be proactive before the competition is. Things that used to make a difference -- closing cost assistance, home warranties, etc. -- just don't cut it anymore, at least in my market, so pricing often is the hot button.

Posted by Amanda Shore about 8 years ago

Wow - it's been a full-time job just reading all the comments - and I thank all of you! I'm heading out to watch some football, but would like to share a few more thoughts before I do...

First - my seller friend is following this blog and she's very much enjoying the discussion. She's finding it fascinating to see the different ways agents run their businesses and communicate with their clients. Very enlightening for her ;-]

Second, if you're wondering if there might be more to the story - of course there is. In the interest of discretion and brevity, I summarized the situation to capture as much of the essence of the story without complicating it with details that don't lead to the point I hoped to make.

As far as the price range in question is concerned - again, in the interest of discretion, I won't share it exactly, but just know that a $50,000 price reduction is significant enough that my friend isn't interested in reducing the price that much without an explanation that satisfies her.

And finally, for those who proclaim that Price Cures All, I can't help but argue - "Perhaps... but so what?!" If the only value we as real estate agents bring to the table when our listing isn't selling is an amendment to reduce the price, we aren't bringing much value at all. Price is one solution, but it's rarely the only one, and it's often not the best solution for our sellers. We can do better than that...so... LET's!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Hi Jennifer. It's a great subject matter and I really like your suggestions - but for your own clients, not other agents' clients.

I would like to say this - be careful - contrary to other comments made, I am hoping the actual listing agent does not read this and does not recognize you as making those suggestions to his 'client' in a direct conversation or engaging this person with real estate advice as you are not "the" listing agent whether this is a friend or not.  You could be the target of an investigation, an ethics violation for interfering with a client, disciplinary actions that may include a probationary period and real estate estate classes, a monetary fine and/or suspension of your license depending on your local or state association.

The appropriate answer and advice would have been to say that you are not familiar with all the circumstances of the listing and encourage them to discuss the matter with their own listing agent. Also mention that it is inappropriate for you to discuss the listing at this time while listed with someone else. If the client is not happy, they have options, one of which where they 'may' have the option to cancel their contract and move on with another agent or you in this situation.

The golden rule is never to provide professional or real estate advice to a client which is not yours. Period.

I don't think you would want other agents offering advice to your clients for which listings you can't sell right now post 60 days.  Just saying.

Posted by Richard Bazinet /MBA, CRS, ABR, Phoenix Scottsdale. Sellers, Buyers & Relocations (West USA Realty) about 8 years ago

We are suppose to be the "Real Estate" experts...so we better take the time to be able to answer all our clients questions with back up.  Great comment #120 - It's hard not to answer questions for a friend, even it is not your listings, but I do understand the ethics violation for interfering with some one else's client.  Thanks for sharing!

Posted by Cynthia Streza about 8 years ago

Good questions, but the market has rejected the property at this price point. Feedback that says "doesn't work for my buyer" really says "doesn't work for my buyer at this price point".

That being said, your seller deserves answers .

Posted by Marianne Bandy, CRS, GRI, Certified Negotiation Expert (Bandy Homes) about 8 years ago

Sometimes price is not the only way to sell a home.  Home values will vary based on the buyer.  An investor demands a lower price than the average owner occupant. 

Posted by Karen Steed, Associate Broker Haralson Realty (Tallapoosa, Bremen, Waco, Buchanan, Temple, Carrollton) about 8 years ago

Dear Jennifer,

Good points. Sometimes, the obvious is not the solution. Better to dig a little deeper and find out exactly why a home is not selling. Finding buyers for unique houses is not easy, but one day a person will come and like it the way it is, even, if we personally do not care for it.

Posted by Dörte Engel, ABC - Annapolis, Bowie, Crofton & rest of Maryland (RE/MAX Leading Edge) about 8 years ago

I've actually talked with people about NOT doing  a price reduction for that very reason...that the feedback I have gotten has nothing to do with the price. I almost always represent both sets of clients, the sellers and the buyers, so I without fail ask for feedback, whether in detail, or a number system (1-5 and why) or just a perfunctory explanation as to why it's not a fit at this time.

I've also talked with potential sellers about NOT LISTING right now. I'd rather they be happy, I'm being ethical and they don't end up giving away the farm.

Posted by Gayle Rich-Boxman Fishhawk Lake Real Estate, "Your Local Expert!" 503-755-2905 (John L Scott Market Center) about 8 years ago

Jennifer, This just shows that not only do you have to price it right but you also have comunicate with the seller of what is going on, whenever there is a change for a buyer or seller, they need to not only know how or why, but understand, why and how it is needs to happen. 

Posted by Michael Morgan, Serving Seminole County FL (Remax) about 8 years ago

Great questions, Jennifer. Though this doesn't sound like the case with your friend, there are definitely those sellers though who want to list for what they believe it's worth and will not even look at the supporting comps. I agree with Marianne in #122.  Your friend does deserve answers regardless.  Good luck to her!

Posted by DeeDee Riley, Realtor - El Dorado Hills & the Surrounding Areas (Lyon Real Estate - El Dorado Hills CA) about 8 years ago

Marianne (#122) says it all very simply.  Also, many of the individuals who made comments about ethics and interferring with another agents client do not realize you are now an author and no longer an agent. therefore free to dispense advice to your freind as you see fit!

Posted by Steven Pahl, Real Estate Consultant Tampa, FL 813-319-6423 (Keller Williams Tampa Properties) about 8 years ago

Why would a seller think more days on the market is a good thing? It never is. A serious seller needs to be AHEAD of the market and nothing brings excitement to a listing more than a new price. It's a fact. Without knowing list price it's impossible to say if 50k is even enough. Buyers will RARELY say it's overpriced-but if there are NO offers guess what? It is. Homes are selling and I've had multiple offer situations in THIS market but only when the PRICE is RIGHT. The seller could spend money on improving the home-but let's be realistic, they could end up losing what they invested an STILL have to reduce 6months later by even more. It happens all the time so most time the hardest but smartest  thing to do is to take dramatic action for RESULTS. The 50k may get them in to the next price point that a whole new set of buyers who haven't seen home will come.

Posted by Anonymous about 8 years ago

Hey Jennifer!  Very soulful blog post, m'dear!  I think it's completely asinine for an agent to ask for a price reduction of $50k without any explanation or data to support it.  Some ideas for the seller are to focus in on the parts of the home that make it non-family friendly.  I have brought in contractors to give estimates on what it would take to "cure" a defect, and sometimes just having a written estimate will allay some buyers' concerns.  "Oh...it would only cost $2,000 to knock out that wall?  I thought it would cost $15,000."  

If a seller is not in a position to go ahead and make the improvement, then he could share that estimate with any buyer who mentioned that problem.  Most often, those estimates are FREE!

I would also BLOG, BLOG, BLOG about this unique house and it's wonderful attributes.  That way buyers who see the blog and come to view the house already know it is unique and are coming because they like what they see.  Using boiler plate descriptions on this home in the MLS won't work because buyers will be surprised when they get there!

Posted by Melissa Brown, Realtor - South Charlotte NC Homes for Sale (Helen Adams Realty) about 8 years ago

Great post with great reasoning.  Your friend should move on and hire you to sell her home!

Posted by Laura Gibson about 8 years ago

Jennifer  -- liked your systematic and analytical 'soul' approach...

...like Gene #87, Unique homes sometimes just take longer to sell...

I also had a unique house on the market; neither I, nor the seller via private treaty, and last, the subsequent agent via Auction and later by normal treaty could Sell...is it to do with the  changing local and international  economical parameters?...is it Karma? (the sellers? mine? is there a sublime 'lesson' to be learned??? ...)  or a mixture of all the above...I believe when the time is right, the universe will unfold...Thank you for sharing -- very inspirational comments. Please keep us updated. Peter from Perth, W Australia

Posted by Peter Michelbach about 8 years ago

Excellent points were made here, but also, in the difficult market we are in it is hard to predict a sales price for some properties, even more so for unique properties. I prefer to educate my Sellers by explaining and illustrating the market activity and conditions, but I also explain the fact that we cannot manipulate the market, we can only react to it. Then I pull out my crystal ball...

Posted by Anonymous about 8 years ago

This is a valid point of consideration .From it's definition, the market value of a property is determined by the "market". A very unique home that appeals to a smaller pool of buyers should come lower in a CMA, as there will be less interest in it.  The sellers should be made aware of this.

Posted by Monique Ting, Your agent under the sun (INET Realty Honolulu, HI) about 8 years ago

Hi Jennifer Good points made in your blog. If Sellers are educated by their listing agent from day one and  are kept informed  about pricing trends and market conditions on a weekly basis it should not come as a great surprise when a price adjustment is suggested.  

Posted by Joan Congilose, Helping Sellers & Buyers (New Jersey Properties) about 8 years ago

#122 you are a woman of few words and yet as far as I'm concerned you said it all!!!!
Jennifer I dont know where your market is or where your friend is but I tell my clients all the time "in this market their are only 2 things that get homes sold, price and exposure. You're in charge of one and I'm in charge of the other".I want to be clear I keep my clients informed and empowered at every step of the process and when your truly thorough and keep your clients informed and the property doesn’t sell there is only ONE answer listen to the market and drop the price!!!!
I hesitate to be contrary but your friend deserves to hear the truth. We are here to serve our clients and the two most significant components are know your market and tell the truth.

Posted by Eileen Rivera- Long Beach Ca. about 8 years ago

So true and simple all the agent needs to do is explain.  

Posted by Michael Singh,Broker (Singh Real Estate) about 8 years ago

Thank you, Steven #128 - regarding the appropriateness of my providing advice to my friend. I suppose if I were in the position of trying to get the listing and was doing so by badmouthing the current agent, that might be inappropriate, but since that obviously isn't the case here, I have no qualms helping my friend (from 2000 miles away) on a subject in which I have expertise. And for the record, I am not a member of NAR, so I'm not bound by the Realtor COE; however, that said, if I felt that dispensing advice to my friend was unethical, I certainly wouldn't do it. And she's certainly free to accept it or reject it!

Whether or not I would appreciate my clients asking other agents for advice during our contract period - would I like it? No, not at all. But I wouldn't blame them, nor would I blame the agent who offers advice - I'd look in the mirror and blame that person!

Again - I'm honored by all the comments and feedback - THANK YOU!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Great post and shame on that agent for not providing feedback that the listing was overpriced if that was given by other agents.  Communication is the name of the game.  No wonder your friend balked at a $50,000 price reduction!

Posted by Kathryn Maguire, Serving Chesapeake, Norfolk, VA Beach (GreatNorfolkHomes.com (757) 560-0881) about 8 years ago

Knee jerk price reductions are a discredit to every real estate professional. You are written a very well though out blog and have provided a guideline for agents who care to follow.

If an agent can not respond to those six questions, they are clearly one-trick agents. "Reduce the price" is the only act in their performance. Don't, please don't, be a one trick poney.

Posted by I see a ray of sunshine about 8 years ago

Some excellent comments and observation. My feeling is this....When one has a unique home to sell, the Agent should make that the central selling point, Market the home as different. there are lots buyrs out there looking for "different" and not the cookie cutter type home. Don't pretend the home is not different!! Off course, if the home is hidiously unattractive and different, that could be the game changer and price could be the primary factor in it not selling.

Posted by Bob Publicover, Thinking outside the box (Publicover Realty Group, inc) about 8 years ago
Im going to be a minority voice here, I guess. In the end, the market sets the price, so I list at the high end of the CMA range, and do quick price reductions every few weeks if there are no offers. It's a bit scary, but I get the sellers to agree to this strategy up front. I do a lot to get the word out and promote the listing, and since I started using this strategy my listings are getting an accepted offer pretty quickly, and above what my sellers hoped to get. It sounds like the only real mistake this agent made was not to discuss this up front with the sellers, and $50K is a lot for the first drop. I usually do price reductions of 1%. If my sellers don't want to do this, I'm OK with it, but so far they have all agreed.
Posted by Deb Nicholls, Realtor - ABR, LCM, e-Pro (Keller Williams Boston North West) about 8 years ago

I agree completely with you that a rationale and strategy should be given with any recommendation we give to a seller. However, in the circumstances you describe - and we have all been there - feedback can come with price as a disguised objection. When the market reacts to an offering that has quirks, sometimes price is one of the only ways to solve the situation. Objections to unchangable features of the house - street, floorplan, adjacent attributes, lot characteristics - generally require a unique buyer (may take more than normal marketing time for them to surface) or a price that is more favorable than the "comps".

Posted by Anonymous about 8 years ago

Pricing isn't an exact science. If it didn't sell in 2 months it either needs a condition or price improvement. Prices certainly aren't going up right now, so I have no issues asking for aggressive price reductions to avoid chasing the market. I think the agent would be doing a disservice by not bringing the price issue to light.

Posted by Brandon Hoffman (RE/MAX Connected) about 8 years ago

The seller deserves more information and facts.  It is a unique home and price has not been mentioned?  If it doesn't work for the people that have looked at it , maybe the verbiage needs to be changed so people know what they are looking at and get real potential buyers.  If price was not brought up, then it is not an issue.  This approach is just a shot in the dark.  There are three reasons a home doesn't sell: Cost(price), Condition, and Clutter(shows well?).  In this case it seems to be marketing to the wrong prospects.  A general listing for a unique home.??? 

Posted by Ric Mills, Integrity, Honesty, and Vast Real Estate Knowledge (Keller Williams Southern Az) about 8 years ago

Enjoyed your article very much Jennifer.  Thank you.

Posted by Chuck Marunde, Sequim Real Estate Broker (Sequim & Port Angeles Real Estate) about 8 years ago

I agree with you, why not price it out to begin with? 

Posted by Christian de Almeida about 8 years ago

Hi Jennfer,  Great post.  Yes consistent communication is important all along the way.

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) about 8 years ago

Jennifer, sounds like your friend needs lots of answers.  She needs to call her agent go over the good and bad features.  You did a great job on communicating with her.  Now, it's her agent's turn.

Posted by Kay Van Kampen, Realtor®, Springfield Mo Real Estate (RE/MAX Broker, RE/MAX) about 8 years ago

WOW - I too would be a bit frustrated. Good advice!

Posted by Anonymous about 8 years ago

Its always important to have data to back up pricing decisions.  Otherwise why should you expect a seller to just lower their price for no reason.

Posted by Pam Dent, REALTOR® - Charlottesville Virginia Homes / Horse (Gayle Harvey Real Estate, Inc.) about 8 years ago
Whenever you are talking about reducing someone's equity by $50,000, you are right....there should be compelling and significant data to support why it is necessary and how it will change the viewings to the property. Hopefully, that kind of reduction would open the home to a completely new set of buyers, ones that may be looking for a unique home like that. If the feedback has been that the floor plan is not what they are looking for, perhaps it is in a price range where it is predominantly families that are looking. Perhaps the lower price range will attract a younger professional couple or single that will be sold by the lifestyle that this unique home can offer! Best of luck to your friend!
Posted by Karen Feltman, Relocation Specialist in Cedar Rapids, Iowa (Cedar Rapids/Iowa City, IA KW Legacy Group) about 8 years ago

Very interesting post Jennifer!! Thank you for sharing with us!!

Posted by EMILIA B COOPER, REALTOR® SFR.NCHSE.AHWD, Short Sales, Foreclosure & Bank Owned Real Estate (LAROSA REALTY) about 8 years ago

Wow Jennifer you really stirred something up:)  I have wondered and stated so many times why the first thing I see many agents do is lower the price..  I don't usually hear about a list of reasons that they back the suggestion up with, other than it hasn't sold so lets lower the price and get it back up to the top of the listings??:)

It would cost home owners a whole lot less to invest in a Walk thru Consultation with a Professional Home Stager.. they can then take that information and decide if they want to hire the Home Stager to do it or do it themselves  or not.  

I understand the home you are describing is well staged.  However, the marjority of the ones I see dropping their prices are not.  One Agent told me the reason Realtors don't recommend a Home Stager is "because they are afraid the home owner is going to expect them to pay for it."  I think that is all in how the Agent presents it, if done correctly that won't happen.  Also if the realtor needs help in how to present this to the home seller, I am sure whomever, the Home Stager is in their area, will be happy to help them with how best to present the recommendation.

Thank you so much for taking the time to share this post and to read all theresponses.

Sincerely appreciate you and will suggest and recommend and share:)

Posted by Brenda Hughes, Home Staging & Re-Design Southern IN, KY (Evansville Home Staging & Re-Design) about 8 years ago

Great post.  It is very important to have supporting documentation when requesting a repositioning in price.  Although we do not often get feedback that a home is "over priced" - all the other feedback usually adds up to the same thing.  Unique styles are also like looking for a needle in a haystack when it comes to finding the right buyer for a home.  At a minimum, the agent should list any and all negative comments and try to help the seller understand what that takes away from the value.  Such a hot topic these days.

Posted by Jane & Garry Smith, ABR, GRI, Realtors - Portland, ME - (207) 253-3195 (Coldwell Banker Residential Brokerage) about 8 years ago

Good post, however the "$50,000 price reduction" might mean almost nothing if the property is listed at $4million. If the property is listed at $200,000 then it is a much bigger deal. Hard to put in in context without all the details.

If you say a 5% price reduction, or a 10% price reduction, etc. That might mean more to most of us.

 

Posted by Jayson Holland, Jay Holland (Listings.com) about 8 years ago

Thanks for the reblog, Brenda and I agree with you 100%. I used to own a home staging company, so "selling" staging was never a problem for me - in fact, in my last full year of selling real estate 2008-2009, every single one of my listings hired my stager (and paid for it). If you have a great stager and you believe in staging, it's very easy to bring a seller on board.

Jayson - it's definitely not a $1M+ property and the $50k adjustment would have been a significant one - more in the 10-15% range...

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Great post. I agree, the listing agent should certainly have comps ready to justify a price reduction. Never blind side the seller.

Posted by Scot Draper, Broker/Realtor, ABR CDPE CIAS (RE/MAX Executive Realty) about 8 years ago

Such a great post Jennifer.  I agree that if your friend's agent did not provide any background information, then he may well be lazy. Or a bad communicator.

Unfortunately, I have a listing right now that both I and the seller felt was priced very competitively 2 months ago.  All the agents said "what a great house - good price!" and buyers feedback never included comments on pricing.  Yet, this property as beautiful as it is, has a couple of, shall we say, peculiarities, that limit the buyer pool interested in this home.  And here's the thing:  the more buyers you have for something, the more it's worth.  The fewer buyers, the less it's worth.  It's the law of supply and demand. 

If the buyers at that price point are essentially rejecting the house, the only real option is to open up the buyer pool by adjusting the price - because we're not likely to "fix" the peculiarities or uniqueness any other way.

It's too bad your friends agent did such a poor job of working through this with the seller.  I did communicate all this, and the fact that other homes in the price range were selling, there were buyers in the market (including solid relocation buyers), and that we needed to reposition to meet buyers' expectations, which are very exacting to be sure.

Good luck to your friend.  I hope it works out well for her.

Posted by Patrizia "Trish" Giassa, The Shannon Aronson Group (Keller Williams Realty, North Central New Jersey) about 8 years ago

Your words of wisdom to your friend were right on target. As Realtors, we have many tools at our fingertips to analyze the market.  The resulting reports are essential to helping our clients understand the current market.

Posted by Sharon Parisi, Dallas Homes (United Real Estate Dallas ) about 8 years ago

good advice

Posted by dale taylor about 8 years ago

FWIW, I find that agents rarely give feedback that the price is too high.  The few times I've said that in feedback -- thinking to help the listing agent get the seller to see reason -- I've gotten back defensive responses trying to justify the price, as if I'd attacked the listing agent's judgement when I didn't mean that at all.  So now, like everyone else, I just say "Unfortunately, the [whatever] doesn't work for these buyers" and we move on.  

"The price is too high" is in the feedback by implication, but not in so many words.

Posted by Dianne Goode, Realtor/Broker (Raleigh Cary Realty) about 8 years ago

Dianne & others who commented that "it doesn't work for my buyer" = "it's overpriced." I've been thinking about this and I'm not sure I agree with this as a general rule. We all show homes to buyers that simply don't work for them, although they may have appeared to be a good fit on paper. But that home MAY work great for another buyer - and it's not as if by simply pricing a home right, every buyer who walks into it will buy it, right?

I also wonder at the assumption we jump to that "specific objections are just code for overpriced" - that when an agent provides non-price-related feedback, they're really saying that, indeed, PRICE is the issue. Do we KNOW that or do we just tell ourselves that so that we don't have to dig deeper? I've shown plenty of houses that my buyers didn't write on and I didn't provide feedback that the pricing was off because even at a lower price, the house would not have worked for my buyer. 

Am I making sense here with my ramblings?

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Jennifer, I think the bottom line is that if there are enough showings and no offers, no matter what the specific feedback is, generally speaking price should be taken into consideration to open the buyer pool.  It might not be all about price with some unique homes, but even with that, maybe lowering price will make the next buyer accept that unique feature, which the buyers at the current price point will not.  If the seller can't reduce price or gets to their bottom line of pricing, then their choice is to wait or take the home off the market, especially in this market where most areas have way too much inventory vs. ready, willing and able (and super-picky-because- they-can-be) buyers. 

I just showed a charming and very unique home that intrigued my buyers but I think at the listed price they found fault with the floorplan.  They want charming and unique, they lingered at the house, they loved some features of it like the awesome kitchen.  Would they have accepted the bad features at a lower price - maybe - we'll see if it drops and if they reconsider.  As it was, at the current price they nixed it and will continue looking.  My feedback didn't mention price, I only said it was charming and unique but my buyers didn't care for the floorplan.  I don't mention price unless a home is grossly overpriced and I know there's no way my buyers would consider it.

Posted by Judy Orr, SW & Near West Chicago suburbs (HomeSmart Realty Group) about 8 years ago

Hi Jennifer - You need to have a valid reason to lower the price and it can't look like you are just rying to get a fast sale.

Posted by Ruthmarie Hicks (Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605) about 8 years ago

Judy - Appreciate your thoughts! I agree 100% that the price must be considered and it may very well be the primary obstacle to sale. But to lead with that as the only solution without an explanation that satisfies the seller just isn't going to sit right with that seller. I know it wouldn't sit right with ME if my real estate agent just pushed a price reduction amendment in my face as his only suggestion!

RM - EXACTLY!!!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Jennifer, I agree with the fact that being asked to make a substantial price reduction without supporting data or an explanation is not adequate and I mentioned that fact in my prior comment.  My last comment was in response to your comment #163.  I think we're pretty much in agreement.

Posted by Judy Orr, SW & Near West Chicago suburbs (HomeSmart Realty Group) about 8 years ago

Judy - yep - sorry if I implied I was disagreeing with you... I wasn't at all. ;-]

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

Here's a follow-up blog about HOW to recommend a price reduction IF that's really the right thing to do!

http://activerain.com/blogsview/2568348/how-to-recommend-a-price-reduction-without-risking-your-credibility-or-upsetting-your-seller

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 8 years ago

I agree whole heartily on having comps and information to support the price.  Some of what should be talked about has to do with the supply and demand per price point for her character of house within that neighborhood. A simple analysis of the last 6 month's sold information by increments of $10,000 or so as one column, the pending and active market as two more columns, then the time to sell the inventory at each price point would be a useful piece of information in her case. 

Posted by Robert Adams (Keller Williams Realty, South Tampa) about 8 years ago

Hi Jennifer.  Just had to go read the other blog on price reduction.  Thanks!

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) about 8 years ago

Bookmarked it. In fact, very timely one. I have a meeting with a seller who needs...what else? Price reduction!

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) about 8 years ago

Stupendous information, and great recommendations.  Some agent's only strategy to refresh a listing is to drop the price, but that's not always what is needed.  I'm assuming that since he was asking for a $50k price reduction that it's in a high price range, and if it's a unique house, I think 6 weeks is way to early to start cutting the price.  It's probably just one of those houses that needs to wait for the right buyer.  This is an older post, so hopefully she worked it out, and it's already sold.

Posted by Matt Robinson, www.professionalinvestorsguild.com (Professional Investors Guild) over 7 years ago

Your question for the agent no. 6 on changing list price is good that "Has the market changed significantly since you recommended the price we listed at?"

However, a reasonable response would be complicated.  Market changes happen, and this impacts reasons for buyers presenting an offer at any price.  Market changes are usually not the most important reason to need a list price reduction. 

Posted by Harrison K. Long, REALTOR , GRI, Broker associate, Attorney (HomeSmart, Evergreen Realty) over 5 years ago

I just created a post about "functional obsolesence" and how it effects price.  I have a listing right now that has this because of the 'closed floor plan'.  It was appraised at $199,900 before I got it listed so I felt I had to list it at that but there was no showings at all so I finally got the seller to reduce to $179,900 and we finally have a few showings but people aren't liking it because of the closed up floor plan and it's also odd. This is what I would call "functional obsolensence" wouldn't you?  It's very difficult because I feel like I am insulting the seller about this but I have already presented my view via email.  One agent thought it should be listed at $149,900 and I'm afraid that I agree. I find it difficult to ask for that much of a price reduction because I feel like I am insulting the sellers.  Has anyone else had experience with this and if so, how do you convey this to the sellers?  

Posted by Janie Lapka, Realtor, real estate sales, Broker Associate, CRS about 5 years ago

Ugh - I hate it when that happens, Janie!

Not that I was perfect but how I would try to handle a situation like this is to take the "blame" for being wrong on the price. That I'd hoped the market would overlook the functional obsolence (smoke smell, busy street, whatever) but unfortunately I was wrong. "I know you're disappointed, and so am I, but here's what I think we'll need to do..."

Always use "we" "our" and "let's" as if it's "our" problem to solve - which it is. 

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) about 5 years ago

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