13 Points About Price Reductions
Posted: December 10, 2015 by Steve Keefe
1. The Worry Price – “you want to price your home at a price where when the buyer looks at it they are worried that someone will want it too”
2. The Price Point– “people don’t search in 3’s and 8’s they search in 100’s and 50’s, get your price under a major price point, imagine you are on realtor.com and the categories are preset”
3. Heart Attack-“At what price does your heart stop?”
4. Cash deal today –“If someone gave you a cash offer at X and could settle in 30 days, what price would you take it?”. If yes, then we need to just drop it to that and not negotiate.
5. You’ll forget-For when a seller is thinking or saying that you are going to convince him now to drop price and then bring a ridiculous offer to him later and act like you never heard him say he was at his bottom price already. Your response is “I am not going to forget that we had this conversation, so if we get an offer I’m going to recommend you counter offer it, I’m not going to act like we didn’t have this conversation and convince you to drop it drastically more”.
6. Beat the Builders-“Do you think builders have more market intelligence than most realtors? Meaning do they pay more attention to national trends etc? Well the local builders around here have been totally slashing prices and giving incentives etc. That means they know something that we don’t. I think we should get out in front and get this sold before the rest of the resale market starts making big slashes.”
7. The Only Two– “there are only 2 reasons in the world that a house doesn’t sell……….price and condition. Your house is in good condition, we have had no negative feedback there, so the only one left is price…………”
8. Normal vs. Drastic……”There are two types of price reductions…..Normal and Drastic. A normal price reduction would be X and a drastic would be Y. Which one do you want to do? (make sure your Drastic price is insultingly low)
9. “Spying on you”- For when the seller replies with………”well I don’t want to seem desperate or I don’t want to look like I’m in a drastic state……..” you reply with………………”Listen , there are so many Realtors out there and those Realtors have listings of their own. When they show your house if their buyer doesn’t like it they never look back again. They are only WATCHING your house if their buyer likes it. So far everyone that has shown it hasn’t liked it so no one is really watching it regularly but me. It’s not like everyone is paying attention to your price. They are only going to notice a price change if they have a buyer and you all of a sudden show up in that buyers range where you didn’t before, other than that don’t feel like people are staring at you?” Does that make sense?”
10. The Edge. “Basically if your house is priced at 500k and another one is at 500k but the other one is bigger………than the buyer will go toward the other one…….you don’t offer an edge compared to that one…….but if you are at the same price as a house and You offer a 2 car garage where they offer a one car………..then you have the edge. You need to have an edge and you get an edge either by offering the same house as the competition but you are cheaper or you are at the same price as the competition but offer more of a house…….does that make sense?
11. All Feedback leads to price ….for when the seller says…No agents have said it’s overpriced…..” Your Response: “And they won’t. Basically if they like another house, they are saying that for the same price range the other house has better carpet or a bigger lot…….so indirectly that means you need to reposition your house to compete with houses with smaller lots or the same carpet as yours. Make sense? If they say “home is too old”, it means there are homes that are younger for the same price as yours and you need to price yours with the older homes to compete……If they say “don’t like basement” it means other homes for the same price have better basements and you need to lower your price to compete with homes that have basements similar to yours. All negative feedback essentially means we are overpriced.”
12. NAR-“The National Association of Realtors says if you are on the market more than 45 days or you have had more than 8 showings with NO acceptable offers that you need to lower your price.”
13. The Snowball – The market now is like a giant snowball rolling down a hill. We need to decide whether we want to get in front of it or continue to stay behind it.