The Secret Sauce to Making Overpriced Listings Worth It
As featured on Inman News.
Listings, in many parts of the nation, are slim-pickings. For some, an inventory shortage can lead unknowingly to desperation and compromised business standards. Case in point:
A particular seller was adamant about listing her home almost $75k above what the agent determined as the market value. The agent, not willing to lose the listing, did the unthinkable. He agreed. Fast forward two months and the home had been sitting with only one lonely, low-ball offer. The sales agent practically pleaded on bent knee for the seller to reduce the asking price during those two months but his request fell on seemingly deaf ears.
Can you guess what happened next?
The agent got fired by the seller. In a predictable twist of events, the seller listed the home with another agent at the exact listing price originally recommended by the first agent. It closed shortly thereafter, with the original agent losing his marketing dollars, his good name with the friends of this seller, and likely a piece of his soul and motivation.
This scenario is what drives some salespeople out of our industry, or at the least resent the very people we initially wanted to serve. So what could have been done differently?
A: Don't take the listing in the first place
B: Ask for a retainer
C: Unsure
Do you agree with any of these or a combination of them?
I don't.
The better way is to build into the initial brokerage agreement stipulations that allow for automatic price reductions, eliminating selective seller memories.
Are you curious as to what selective seller memory is? Have you ever heard your seller pleasantly say, "Sure, we can reduce if we get no activity," when you caution them about being overpriced? Later, in a week or two, when you bring back up doing a price reduction, the seller no longer recalls (or does not want to admit to recalling) and you have no way of proving it. Unfortunately, you are at a stalemate, that leaves the listing priced as it was despite the market indicators, feedback from agents and buyers, and your own advice. That, my friends, is the infamous selective seller memory.
Stop relying on memories, which may make you lose control of your business, with a stipulation that is time-bound. For example:
If no offers have been accepted by _______ (date), all parties agree to automatically reduce the sales price to ________ (new listing price).
And, don't stop there - have tiered price reductions if need be:
If no offers have been accepted by _______ (date #1), all parties agree to automatically reduce the sales price to ________ (new listing price).
If no offers have been accepted by _______ (date #2), all parties agree to automatically reduce the sales price to ________ (new listing price).
And so forth.
The beauty of this is at the brokerage signing, typically everyone is the most agreeable they will be during the entire listing phase -- this is the point where you are all still on good terms, perhaps even friends. Help to keep it that way by stipulating directly on the brokerage how your listing process will unfold.
Sound off - I would love to hear from you! Give me a shout on Facebook, Instagram, YouTube, and Google+ or by visiting LearnWithLee.Realtor. Want the Listing Leader workshop for your squad? Message me for details and booking. Here's to your success! #LearnWithLee
