Feature article
Agents share: Tips to successfully approach a price reduction conversation
Learn strategies for handling price reductions from top agents across the country
Price reductions are a part of every real estate agent’s career at one point or another. But of course, it’s never a great conversation to have. So we spoke to some seasoned agents – Craig Lowe from Lowe & Co, Jason Clark from Clark & Co, Sarah Pinckney-Welch, Tremains Napier, Lawrence von Sturmer, Ray White Pt Chevalier and Jock Kooger, Bayleys Ponsonby – to get some insights on different ways to approach the topic.
The push/pull of price change
It can be an easy assumption that the agent is pushing the price change - but in reality it’s the buyers or the sellers who really make the call.
An agent-led suggestion, based on buyer behaviour:
“I think the most important thing is that property is promoted properly and presented properly and if those first two things stand up to scrutiny, and buyers are voting with their feet, then a price reduction is called for, “ says Craig Lowe, Managing Director of Lowe & Co.
A vendor-led proposal:
In the case of an attractive home in Paremata that has been on the market for a while, the vendors came to him about amending the price, says Jason Clark, head of Clark & Co.
“Vendors are well-educated and successful people with businesses, they’re more than aware of the state of the economy,” explains Jason. In this case, they wanted to be proactive, he says.
Creating an environment for success
Listen to your vendors
Listen and pick up on the nuances of what vendors are saying. In general most of them are very well-informed.
The recent sales rule
The only thing you can look at when considering advising a price reduction is based on relative recent sales. Give the vendor all the information they need, and involving them in a more current market appraisal or comparison can help them to make the best decision. OneHub reports can be particularly helpful as a neutral source of information.
Return to the fundamentals
Have regular open communication with the vendor, talking all the time about their circumstances. For something sensitive like this, this may mean face-to-face vendor meetings every week so you know how long they can afford to have the home on the market and what their other options are, at what point.
Don’t be timid about a price adjustment
If you’re going to reduce the price, make sure it’s the amount that will have intended impact. You want the move to communicate, “Let’s get ourselves in the market.” This number will come down to motivation, time frame and market conditions.
Liaise with the vendor on how to explain the price reduction to buyers
Communicating the price reduction is key. Talk to vendors about what words you can use to describe their motivation to sell. The more stories you can create about why the house is such a great property to buy, the better. People may then make a move on the basis that it’s too good an opportunity not to act on.
Tell all interested buyers who’ve seen the house before putting the price reduction online
As soon as you’ve agreed the price reduction with the vendor, before the change is advertised, contact everyone who’s been through the house to maximise engagement.
Work extra hard to build trust with the buyers
Some of our seasoned sellers have one-on-one meetings with buyers to answer any remaining questions after a price reduction. The more trust you have with buyers, and the more doubts or obstacles you can remove, the quicker the path to success for everyone.
Author
Other articles you might like
