For years, I've talked about the power of pricing properties correctly. As a real estate agent, you can have everything else in place-great marketing materials, a powerful network of contacts, and listings galore. But if you don't use the power of corrective pricing, then you're in a fancy rowboat without a paddle.
Especially in today's real estate market.
Never before have my words on pricing been more valid-or more obviously correct. In years past, when we were swimming in credit, the importance of corrective pricing wasn't as obvious. But now there's a spotlight on it because many sellers still haven't received the message: Price correctly or perish.
The best way to get this message across to your clients is to not drop it on them in one fell swoop. I advise agents to stay in touch with their clients on a continuous basis, once a week at least. And when I say "stay in touch", I don't mean send recipe cards or stories about your kids. I mean send relevant and up-to-the-minute information about the market and how it applies to their listing.
By staying in touch so frequently, you're letting them in on your thinking. When you do recommend a price reduction, it then comes across as an informed decision based on current conditions.
Some agents hit the correct price the first time out. They list a property and it sells practically overnight. Then, they list another and it just sits there.
This is NOT a reflection of you or your client. It is only the reality of the market. It's not what you start out with that determines whether or not the property sells. It's the corrective pricing you do along the way.
If you have an overpriced property and you make a diligent effort to do regular price reductions, then you will eventually hit the market right and get it sold.
Want examples? I've got them.
An agent I know who has three listings. All high-end. All way out of range of the market. All difficult sellers who believe that their properties are worth more than the market will support.
The agent stayed in touch over the course of a few weeks-sending relevant market data that showed the clients in detail how overpriced they were. She made sure they knew the reality of the situation, backing it up with solid numbers.
One seller saw the light and relented, agreeing to a price reduction. That seller's property sold almost immediately. The other two still sit for sale. This is a prime example that corrective pricing works-even on high-end properties.
She stayed in touch with the clients, providing relevant market data on an ongoing basis. Then, she made a strong presentation to all eleven. She urged them to reduce their prices based on the numbers the market could bear.
Only seven agreed.
But out of those seven, six received offers. Corrective pricing works again.
This is most dramatic. An agent with listings coming out of her ears. So many that she was the envy of her colleagues. But, none of them were selling. She was overwhelmed. She had bills to pay. She was frustrated and didn't know what to do. She called me for advice.
I told her exactly what to do and she did it.
From that moment on, she made corrective pricing her Number One Task. Before doing anything else, every day she would get on the phone to her sellers talking about first, second, or third price reductions.
She created a vast storehouse of information to send out to them-proving that they are missing out on sales because of stubbornness.
Once she made this switch-focusing daily (and almost obsessively)-on corrective pricing, the floodgates swung open. She had multiple sales, all within a two week period!
She is no longer depressed about the market. In fact, she's excited. Now she can't wait to send out the next batch of information about the market because she knows she's finally getting through to her clients.
In many ways, the information itself does the heavy lifting. Some agents have said to me, "Denise, I can't just blurt out to people that they need to do a price reduction."
That agent was right. It's much better to slowly prepare them for the truth-with the truth itself! The numbers don't lie.
When you eventually do make the recommendation for a price reduction, it comes as no surprise because you've been keeping your clients informed all along.
If you haven't begun making corrective pricing a regular part of your daily tasks-perhaps even your Number One Task-then now is the time to start. Get in front of your clients with solid facts about the market and what it's telling them about how much their home is really worth.
Because in the end, it really is all about price.