“How can I get my sellers to lower their prices?”

So this last week I spent several hours speaking to top-tier REALTORS® asking them how they convince their buyers to lower their prices. I asked two simple questions, and got some great answers:

1. When should I start talking about price reductions?

Every top producer I spoke to said the same thing:

“I discuss a price reduction strategy with the seller before I even list the property; after-all, I’m not going to waste money and time promoting a listing for a seller with unrealistic expectations.”

2. What is your “price reduction strategy”?

Here’s a summary of the strategies employed by top producers I spoke to:

1. Keep a record of all showings of the property. Most areas have key-box systems that keep track of entries into a property. In areas that don’t it was suggested that there be a business-card bowl, or viewing sheet.
2. Contact all REALTORS® after a showing. This is the best way to keep in touch with the market. Here are some additional considerations:
   • Solicit REALTOR® feedback via phone and email template with a maximum of 3 questions
   • Assume that the showing REALTOR® is busy and that your listing was only one of 6-10 showings they did that day
   • Make sure to include listing address and details in the email to make it easy for the showing REALTOR® to respond
   • Expect a 40-50% response rate
   • Use an online feedback system
3. Make sure to emphasize that the “Asking Price” is just that: the “Asking Price”
4. Make sure the seller understands the following:
   • If a listing is getting showings but no offers, it’s 3-5% overpriced
   • If a listing isn’t getting any showings, it’s 10%+ overpriced
5. A price reduction is an opportunity, not a failure. Prior to making a price reduction, all prior viewing REALTORS® should be notified. This can sometimes entice a buyer to offer before the price change hits the MLS®.
6. Assess your seller’s motivation and be honest. Make sure to plan a price-reduction schedule during the listing presentation. Responders to my survey indicated that a price reduction every 2-4 weeks is reasonable depending on seller motivation.
7. Warm up the seller. Keeping the sellers informed maximizes the chances of a justified price reduction. A weekly report showing the following should be sent to every seller:
   • Number of inquires on property
   • Number of showings
   • General feedback
   • Market activity (including recent comparable sales and active listings)
   • A suggested plan of action (based on market and showing feedback)
8. Be Organized. Without a strong, systematic plan of attack even the best price reduction strategy will fail.

“Wow – that’s ridiculous. But it can’t be many of them can it?”

Our survey revealed that a whopping 30% of Realtors® don’t call leads generated from their websites!!

“What do you mean, not calling? Surely the Realtors® emailed them or did some other type of follow-up??”

This is what we’d thought, but after further questioning we discovered that these leads had simply been forgotten, missed, or just not followed-up with at all.

Why?

In most cases (66%), Realtors® ignored emails coming from their websites. In other cases (20%) Realtors® assumed the customers would not immediately convert. The remaining Realtors® reported a host of other reasons including (but not limited to) untrained/low-quality assistants, not enough time, etc.

Other things to be aware of

In addition to almost a third of Realtors® not calling their leads at all, a further 30% waited upwards of 24 hours before responding to their email/website inquiries! Any current or future top producer knows that even an hour, let alone a full day, can mean the difference between getting business or not.

When a lead was called, what happened?

Of the 70% who reported that they’d called their leads back, the vast majority (over 75%) reported that they’d made one or more sales from those leads during the prior year. Almost 10% reported that they’d made one or more sales within the prior month!

Our conclusion

By our estimates, Realtors® can increase website lead conversion two-fold by making the following two changes:

1. Call or email ALL leads that approach you through your website
2. Make sure your website sends leads directly to your cell phone or mobile device so you can call or email ALL leads immediately

The biggest mistake you’ll make this year is not being reachable by your customers.

You’re probably thinking:

“This doesn’t apply to me – I’m always reachable through my office; I even give my cell phone number to serious customers…”

Don’t be fooled:

Definition of Reachable: “… To succeed in getting in contact with or communicating with …” (courtesy of The Free Dictionary)

The key word is, “succeed.” Unless your customer succeeds in getting contact with you, then you’re not reachable. Ask yourself honestly, “how many times during the day am I TRULY reachable.” I bet the answer will surprise you.

Top Producers look at things differently – though they themselves might not be reachable, their “services” are. For example, when you call the office of a Top Producer you’ll always get someone on the other end of the phone. In most cases they’ll be able to help get the basic information you’re after, and if not they’ll be able to tell you when to expect a call back from the Realtor™.

Many Top Producers take, “reachable,” to the extreme:

• They put their cell phone numbers on their listing signs and websites, and rarely use answering/paging services at all.
• They provide a wealth of information through their real estate websites including listing information, detailed explanations of the entire real estate process (looking/listing, moving/mortgages, etc.), MLS® Searching, and much more.
• They are fluent in, “E-Language“.
• They are efficient and know when to cut to the chase.
• They rely on systems in their businesses to keep them, “reachable.”
• They set explicit expectations for themselves and staff about, “rechability.”

Here are some simple things you can do TODAY to make yourself more reachable:

• DROP THAT PAGING SERVICE!!! Make sure your office gives out your cell phone number and/or website URL
• Be accessible on the internet – Realtors™ without websites are dead in the water
• Keep your cell phone voice mail message short and sweet, but make sure the caller knows when you’re going to call them back

1. Empower them to do their own work

Top producers know it – customers who are empowered to do their own work will; it REALLY IS that simple! You can empower your customers by:

• having a Virtual Office Website that allows them to do and save their own MLS® searches
• giving them access to other information about the market such as statistics and trends
• giving them all information about listings so they can narrow down their favorites themselves

2. Make them your sales staff

Happy customers will tell their friends about you; all you need to do is give them great service, then make sure you stay in touch.

• Use an email campaign with your recent website blog entries
• Add them as a friend on Facebook
• Send monthly newsletters

Doing these things will ensure your customers always mention your name when their friends ask, “which Realtor™ should I use?”

3. Use them to recruit listings

If you’re working with lots of buyers, you can use them to recruit more listings. Just go to craigslist.org, or kijiji.com and add your buyer’s needs to their, “wanted,” directories. You’ll have FSBOs inquiring in less time than you think.

Successful companies use their customers to grow their businesses – start thinking like them and you’ll find more commission in your wallet almost immediately.

E-Language is the new, mainstream communication medium – it’s emailing, text messaging, facebooking, and twittering – and it’s the business language of choice that 40% of your customers are using; and here’s the funny thing about E-Language – most Realtors® think they’re already fluent. Afterall, you’ve got email right?

The truth is that it’s not about having the tools, it’s about how you use them.

Here’s what I mean: when you travel to Spain and someone speaks to you in Spanish, how do you respond? Well, if you speak Spanish, then you respond in Spanish. If not, then you ask that person to speak back to you in English. Guess what? To them, you’re now speaking a foreign language.

E-Language is no different – how many times have you responded to a potential customer with this email:

“Hi Jim, thanks for your email. Give me a call when you get a chance at 555-555-5555 and I’ll give you the details on that listing.“

Well done – you’ve just told that potential customer that you don’t deal on their terms, and that if they want to work with you, they’ll need to do it on your terms.

The key is to speak their language back to them – if you’ve got a good real estate website, then they’ve already seen your phone number, and if they’d wanted to use that medium then you would have already have spoken to them. The fact is that they’re more comfortable with E-Language – so you’d better respond in kind:

“Hi Jim, thanks for your email. Here are some more details on that property:

… (put a link to your website)

By the way – you can use my website to search the entire MLS, just click here: (link to the MLS® search on your site).

I’m at your disposal to answer any questions you might have.“

Now you’re talking their language!