Working with a seller to come up with an asking price can be a challenge. Getting a house sold involves smart pricing. As the agent, you know the comps better than the seller. But some clients are adamant about setting their asking prices at a higher price point.
As a professional you respect their wishes to keep the peace. But at some point during the process, the time might come to lower the asking price. This can take serious convincing on your part. But if your clients are reasonable and open-minded, they'll soon realize that you're correct and follow your advice.
Here are five times when your client should lower the asking price:
1. Local comps change
Real estate comps are not written in stone. Over the course of a few weeks or a few months, comparable sales in the area can shift, at which time you may recommend a lower asking price to increase interest.
When you initially listed the home for sale, area comps could have justified a higher selling price. Maybe there was greater demand for housing a few months ago. As demand decreases, so does the price of homes. And if several similar homes have sold for less money in recent weeks, this affects how much your client can get for his place.
No client wants to hear this news. But if they're motivated and eager to sell, lowering the asking price is the only way to stay competitive and build interest for the property.
2. Showings slow down
Selling real estate is a numbers game, so you need as many showings as possible to find the right buyer. If showings slow down to the point where nobody is viewing the home on a regular basis, it’s time to adjust the asking price.
You don't want a stale listing. It’s nearly impossible to find a buyer when a home only receives one or two showings every couple of weeks. Reducing the asking price can reignite interest for the property and increase foot traffic.
3. Plenty of showings, but no offers
Then again, maybe the property is getting a lot of showings, but no offers. If you're not getting any offers from potential homebuyers, this signals a problem.
You can recommend minor changes to boost interest, such as removing clutter and depersonalizing the space. But if your clients have already taken your suggestions and still aren’t getting offers, reconsider the asking price. Take a fresh look at neighborhood comps to make sure the home is priced appropriately. The good news is that you don't have to lower the asking price too much to spark interest. If other properties in the area are listed for $150,000, yet your client’s property is on the higher end at $154,000, lowering the price by $4,000 could be all it takes to find a buyer.
4. Low offers
If every offer you receive is lower than the client’s asking price—considerably lower—this is sign that they’re asking too much. Other real estate agents will check local comps and then advise their buyers on the right price to offer for a property. Some buyers are educated and refuse to overpay for a house.
Granted, some sellers aren’t always in a position to lower their asking prices. The home’s sale price must be high enough to pay off their first and/or second mortgage, plus they need enough proceeds to pay their realtor's commission. Some sellers also need to sell at a particular price point to have a down payment on their next home. So understandably, some sellers don’t have flexibility with regard to the price.
If they’re only getting low offers, sellers have to decide whether to postpone the sale, or accept a lower profit. Only they can make this decision. You can, however, recommend a price that’s more likely to sale the property so they can move on with their lives.
5. Feedback from experienced agents
If you’re a new real estate agent, maybe you haven't mastered the art of properly pricing a home. Therefore, your client’s asking price could be higher than it should be. After a few showings, get feedback from other real estate agents. What did a prospective buyer like or dislike about the home? Can the agent recommend tips for making the home show better? You can't do anything about square footage or a home’s layout, but you can suggest adjusting the price if it’s becoming a deal breaker for buyers.
Sometimes lowering the asking price can give your house the competitive edge it needs to sell.
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