We all know that sellers hear what they want to hear and believe what they want to believe when it comes to how market conditions will impact the sale of their home. They believe their home is special and people will be knocking on the door with full price offers within days of hitting the market. When that doesn’t happen, who do they blame? The agent, of course! The market has calmed a bit in some areas. It is still a sellers’ market, just not the frenzy that it has been. There are a few less showings and a few less offers and more days on the market. Some of the properties you are listing may need at least one price adjustment. As you go into meetings with your sellers and list properties you will want to have a “setting the expectation conversation.” Below I share some of my scripts for having those tough conversations with your sellers.
Script for when they ask, “Do you think this is a good price? Do you think it will sell for this price and sell quickly?”
“Mr. and Mrs. Seller, I feel we made a careful and mindful decision as we selected the list price of the property, and I want to assure you that I will fight to extract every possible penny from the sale for you. However, I cannot promise you that the home will sell for this price because the real estate market is a lot like the stock market, it goes up and down and is very unpredictable. So, while I cannot promise you that the market will accept our price, what I can promise you is that I will do my best and I will keep you well informed of the progress every step of the way!”
Set the expectation once the listing Is signed.
Once the listing is signed and back in your hand, spend another 10-20 minutes in the letting — the — expectation conversation. This could be one of the most important segments of your appointment, so don’t skip it!
“Mr. and Mrs. Seller, I am delighted to have the opportunity to represent you in the sale of your home. And I want to assure you that I will leave no stone unturned to find our perfect buyer. I have every reason to sell the property for the highest price possible because then I make more and you are happier!”
“Now that we are business partners, I would like to have a confidential conversation with you. Because we have all the data in front of us, now is a perfect time to strategize together to create a game plan of what we will do if the market doesn’t respond to our price.”
“I know that you may not be in a hurry, however, I do want to be sure you are aware of the fact that all agents and buyers can see our days on market and if the home doesn’t sell reasonably quick, they will use the high number of days on market to rule us out or to justify making a lower offer.”
“This is why I will be carefully tracking the market response over the next two weeks and reporting back to you. If we see the market is rejecting our price, then we will want to make a decision to adjust the price within 2 weeks to 21 days.”
“Again, confidentially, can you share with me what price adjustment you feel you would be willing to make at that time if the market doesn’t respond?”
The goal is to get a lower number in their mind and on the table, and even potentially to get the first price adjustment in writing to make it easy to move forward with it when the time comes.
If they won’t give you a number, it’s still okay because at least you have opened the door to the discussion.
Caution: If you are doing net sheets for them, do not under any circumstance, do a net sheet at the listing price. Instead, suggest that it might be best if you do one at what could be the worst case scenario, the lowest potential price a buyer might come in at, knowing that while that’s not a number they would accept it will at least provide a baseline to start at when calculating a counter offer number.
In this setting-the-expectation conversation, you want to be sure to let them know how and how often you will be communicating with them. They will be happier and easier to deal with if there is a plan they can depend on.
Be sure to under promise and over deliver, not the other way around. Keep your commitments and be patient. This is a very stressful time for them. The more often they hear from you, the more cooperative and calm they are likely to be.
Script for when the seller responds that they don’t want to reduce the price, they will just take it off the market and wait.
“Well, Mr. and Mrs. Seller, I can appreciate that. If I were you I would probably be thinking exactly the same thing. May I ask you a question? If you did take it off the market, how long would you wait before trying it again?”
(Often, they may say 6 months to a year or so.)
“I’m curious, is there any market data that you have reviewed that makes you feel comfortable that 6-12 months from now would be a better time?”
“You see, my concern is that there is actually the potential that it might take years to see a significant improvement.”
“Would you be willing or able to wait out a 5 to 10 year downcycle?”
“I am afraid that if we don’t take action today and adjust the price to get the home sold, we could be chasing the market down. I guess you could say this conversation is really about protecting the equity that you have in the home.”
“Based on our current market response and the cycle we are heading into, I would recommend that we adjust the price by X today. Will you give me permission now to make that adjustment? It really is the right thing to do.”
(If they strongly resist)
“Mr. Seller, I know it’s a tough decision and I apologize for what the market is doing to you. I wonder, has there ever been a time when you were faced with a tough decision and yet once you made it through and looked back you were so glad you made that choice?”
“I feel confident that this time will be just like that time, and once you are moved and through this process you will be glad it’s over. Let’s do the right thing today to get you where you want to be. Let’s make the adjustment and get this done for you!”
Seller: “Maybe I will just rent it out.”
“Maybe that is a good option for you, may I ask you a few questions so we can determine if that is the best course of action?”
“Do you have experience owning and managing rental properties?”
“If you were to rent it, how long would you hold it as a rental?”
“Would the rent cover the mortgage, taxes, and expenses?”
“If the tenant did not pay and it took some time to evict them and clean up the property, would that place a financial burden on you?”
“Were you aware that if you later decided to sell it you would most likely have to vacate the tenant, rehab the property, and have it empty while it is being sold?”
“Ideally, if you could get it sold, is that still what you would prefer to do?”
“Based on that then, what we really should do today is X so that we can get it sold and eliminate the stress and headache of keeping a property you really don’t want to own.”
“When you think about it, there really is no reason to hold onto a depreciating asset, is there?”
Let your sellers know you will fight for the value they want to achieve. Remind them that you are on the same team.
“If I sell your home for a higher price then you like me better. You will use me again and send me referrals potentially. If you earn more I earn more because I earn a percentage for what I achieve for you. We are on the same team and I will fight for you.”
Go in strong and confident. Give them the facts. Be upbeat and enthusiastic.
Debbie De Grote is the CEO and Co-Founder of Forward Coaching
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