1. Do not take a listing under the pretense that you will take it at their price then get them to reduce it later.
2. If you continue to use an outdated business model, your effort will increase but your results will not.
3. If we spend the majority of our time on inventory that won’t sell, we will have little time for the inventory that will.
4. Don’t blame anyone or anything when your listing doesn’t sell. This is a result of your actions.
5. If a listing is not selling, you need to be honest with yourself, determine why and make adjustments.
6. Ensure you are constantly monitoring your results against what you forecasted in your business plan.
7. Remember that technology will not replace the fundamental best practices in our business.
Best Practices in Pricing:
During the seller’s market in the first half of this decade, very little emphasis was given to best practices in pricing. Salespeople who joined our industry never had to develop the skills required to communicate price effectively. The average time on the market was not measured in days but in hours. Everything sold with multiple offers, and in some cases above asking price. Pricing strategies drew very little interest. As the market slid into a recession, pricing became paramount, yet many salespeople had either forgotten these skills or they had never learned them in the first place. Here’s a quick overview to help you understand how effective pricing strategies can affect your success.
Overpriced Inventory:
1. In a declining market, if you don’t price your properties to get in front of the market you will always trail behind and in time, the sale price will be less than what your original suggested list price was.
2. When a house does not sell, the seller becomes impatient and your relationship will start to deteriorate.
3. When a house does not sell the seller will begin to inject themselves into your strategy/plan and ask for more open houses, more newspaper advertising and more magazine advertising. Agreeing to their request has a direct impact on your profitability. If you refuse their demands for more advertising and effort, you run the risk of damaging your relationship. Even if you eventually convince the sellers to reduce their price to position themselves ahead of the market and you sell their property, you most likely will have damaged the relationship, losing any possibility of referral or repeat business.
The Solution:
1. Listen carefully to what the sellers want to accomplish.
2. Make sure you have done your research.
3. Be honest and sensitive in your communication.
4. Have more than one strategy prepared to communicate price.
5. Have data to support your suggested sale price.
6. Explain the benefits of moving NOW. Use common sense reasoning to support the benefits.
The key is to approach your business knowing that you don’t want every listing – you only want the listings you know you can sell. Industry leaders understand every listing requires aninvestment of both time and money. Success comes not from one opportunity but from many.Helping the seller understand the current market value of their home and why it is to their benefit to price it properly the first time will ensure they sell their house in a time that is acceptable to them, with a reasonable return for your investment.
I wish you great success this month.
Chris Leader
President, Leader’s Edge Training
