There’s no denying that the market has made a huge shift in the past several weeks. And now we’re faced with a new problem: How to have the price reduction conversation with our seller clients without them going berserk and throwing us to the curb. 

But, as real estate agents, we know that having this sticky conversation will be in the best interest of our clients. So, how do we make them see the silver lining?

I sat down with Sean Moudry, one of the most successful brokers in the Denver market and a frequent contributor at The Close, and asked him to share some of his best pointers on how to best handle this touchy subject.

1. Start With How We Got Here

via GIPHY

When Sean knows he needs to have the price reduction conversation, he goes back to the beginning. He likes to frame the situation with context and reminds his clients of when they first began talking about selling their homes. Typically, the process started several months prior.

“I typically take them back to how we got here.”

Sean Moudry headshot

Sean Moudry, 16Strategies.com

“I typically take them back to how we got here,” Sean says. It’s important to paint an accurate picture of where the market was and where it is currently, pointing out just how much has changed since the process began.

How to Have the Conversation With Your Client

Let’s say you started the conversation with your client back in March, then took a month or so to spruce up the home, invested time into staging, photography, and pre-marketing, and then finally got the listing active in June or July. 

“And in that time, the interest rates changed and raised; over the past 30 days, we’ve had 25 showings; we discussed adjusting for the market. You were hesitant to adjust at that time, and now the market has shifted,” Sean says. 

It’s imperative that your clients understand how much the market has changed since you first started this process.

The Close logo

The Close Recommends

Having the conversation about reducing your price is tricky, and you want to make sure you’re fully prepared with all the latest information about what’s happening in your market. Elevate’s integrated comparative market analysis (CMA) wizard will help you easily stay on top of the latest market trends, comps, and anything that might impact the sale of your client’s home.

2. The Hero, the Victim & the Villain

via GIPHY

“Anytime you’re telling a story, there’s a hero, there’s a victim, and there’s a villain,” Sean explains. If your sellers are mad, they’re going to try to make you the villain

Sellers are naturally emotional and looking for someone to blame for their anger, disappointment, and fear. But Sean has a strategy for reframing this idea and taking that blame off of you as the agent who’s trying to help.

Reframe the Seller’s Mindset

“This is the secret weapon: The heroes are the sellers who are heeding your advice. The villain is the market. And the victims are the sellers who don’t listen,” Sean explains. 

When you show it’s not your marketing efforts but the market that’s shifted, and everyone’s experiencing the same slowdown, that takes the pressure off of you and places it where it should be–on the market.  

So, don’t let your sellers turn you into the villain and themselves into the victim. Show your clients how to be heroes.

3. Be Bold

via GIPHY

Don’t be timid when you suggest a price reduction. If you believe that slashing the selling price will make all the difference, then go big. The way Sean explains it, a typical price reduction in real estate is $5,000 to $10,000. But if you have an average-priced listing, then your reduction will equate to only about 1% to 2%. 

“Yeah, nobody’s running to the store for a 1% off sale,” Sean laughs. 

Stand Out With Bolder Numbers

If you want to make a meaningful price reduction, do the math. Reduce the price by a minimum of 5%. That will create a more substantial price reduction that should get people in the door, increasing your chances of finding the right buyer for the home. Otherwise, you’ll end up chasing down the market, always behind the most recent price point.

4. Sell Them on the Second Number

via GIPHY

When you’re ready to present the higher price reduction, you can expect to get some pushback. But Sean has a great way to address those objections. Sell your clients on the middle ground instead.

Use the Rejection-Retreat Strategy

When you need to have the price reduction conversation, give your clients a much higher number first. Sean explains when he needs his clients to be OK with a $25,000 reduction, he’ll first go to his clients and ask for a price cut that’s around twice that amount. Typically his clients settle on the number he actually believes they should choose.

5. No One Likes Surprises

via GIPHY

One approach Sean uses to soften the conversation is he gives his clients a heads-up days in advance. Sean calls his clients on Thursday or Friday, which gives them time to prepare and sets their mindset for Monday.

“Let them emote over the weekend, stress out, cuss you out,” Sean explains. “Let them get their defenses ready.”

Let Your Clients Decompress Ahead of Time

By the time Sean talks to his clients on Monday, they will be more prepared for the conversation and also more accepting of Sean’s suggestions. Giving your clients some time to pre-process bad news helps everyone involved. 

“My job isn’t to get you the most money for your house. It’s to get you what you want.”

Sean Moudry headshot

Sean Moudry, 16Strategies.com

6. Focus on Their Goal

via GIPHY

Remind your client of their own goals. As Sean puts it, his job “isn’t to get you the most money for your house. It’s to get you what you want.” 

When you originally sat down with your client, you most likely asked them the question, “What is your priority goal?” Now is the time to go back to that priority. 

Stay Focused on Their Priorities

Sean reminds his clients of what their goal is and reframes the conversation around getting them to that end. 

“So if you want to be in Florida before the winter, I can make that happen. But what I can’t make happen is you getting to Florida by the winter and getting $800,000 for your home,” he says.

“If anything, during these times, you have to communicate more.”

Sean Moudry headshot

Sean Moudry, 16Strategies.com

7. Don’t Be Mad at Me

via GIPHY

Managing expectations will help mitigate any negative feelings your clients may have in the long run. It’s your responsibility to level with them and give them the opportunity to make a fully informed decision. 

Have Conversations Early

Sean says he strives to have these uncomfortable conversations with his clients as early as possible. “I say, look, my concern is that if we don’t have these conversations now, in 30 or 60 days, you’re going to be mad at me. And you’re going to blame me for the fact that your house didn’t sell. And if I didn’t have these conversations with you, then it would be my fault.”

8. Don’t Fall in Love With the House (or the Sellers)

via GIPHY

“Don’t fall in love with the house,” Sean advises. “Just like the seller, you’re emotionally attached to either their story or the house. And that will influence your objectiveness on the price.” 

Keep a Healthy Distance

It’s difficult to remain objective when you let yourself get too emotionally invested in the outcome of your sellers and their listing. Some of the best advice I ever received was, Don’t become part of the transaction. It’s so important to keep that objectivity with your clients.

Your Take

At the end of the day, having the price reduction conversation is difficult, but it’s truly the best way to serve your clients in an ever-changing market. No one wants to chase the market down. Be honest and upfront with your clients, and they’ll appreciate your integrity and sincerity. 

Have you had to have this conversation with your sellers? How have you handled it? Did you handle it differently than the way Sean suggested? There’s no one right way to handle these delicate conversations with clients. We would love to hear your best ideas. Share some in the comments, and let’s all learn from each other.

×
Want More Leads? Download Our Free E-book
61 proven lead gen ideas from coaches & top-producing agents to help you close more deals.
This email address is invalid.
×
Want even more free resources?
Tell us about you so we know what to send.
×
Want More Leads? Download Our Free E-book
61 proven lead gen ideas from coaches & top-producing agents.
×
Want even more free resources? Tell us about you so we know what to send.